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Why invest in Romania: State Aid schemes and EU Funds

State aid schemes and EU Funds continue to be some of the most advantageous sources for financing strategic investments available in Romania. One of the state aid schemes meant to help investments with a major impact on the economy is established through Government Decision no. 807/2014.

The objective of the state aid scheme represents the regional development by supporting the realization of large investments, with important effects in the economy, oriented towards the top activity sectors. This scheme will have a budget of nearly one billion euros over the next four years, and companies interested in receiving funding will be able to sign up in the next weeks.

On the website of the Ministry of Finance, an institution managing three State aid schemes (807, 332 and 537), the annual budget for scheme 807 is 638 million Romanian lei (RON), and the total state allocation is 4 billion RON. Over 75% of this amount has not been spent. For example, in 2017 no money was used for investment projects with a major impact on the economy. In the two sessions held so far, one in 2015 and the second in the summer of 2016, the state granted state aid of 809 million RON for 12 investment projects that have assumed the creation of over 4,000 jobs.

However, the exact date for the start of the funding session and the timetable for submission of the projects have not been announced yet.

Also in the next period, will be launched this year’s session of the Trade and Services program.

Thus, micro-enterprises and small and medium-sized enterprises active at the date of the opening of the project reception session for at least 12 months may apply for a non-reimbursable financial aid up to 250,000 RON, an amount covering up to a maximum of 90% eligible investment value. The budget available for this year’s session is about 50 million RON, which will allow the financing of at least 200 beneficiaries, similar to the previous year. Under the Trade and Services program, only micro, small and medium-sized businesses are eligible.

Under the rules in force, companies are in one of the three categories mentioned above, as follows:

· micro-enterprises have up to nine employees and a total turnover or assets of up to two million euros;

· small businesses have between ten and 49 employees and a turnover of no more than ten million euros or total assets of up to 43 million euros;

· medium-sized enterprises have a number of employees ranging from 50 to 249, but also a turnover of no more than 50 million euros or total assets of up to 43 million euros.  

EU funds available

In 2018, small and medium-sized businesses may require financial support for business development, youth entrepreneurship support, research, development and innovation, but also for promoting social entrepreneurship. And how is a very high risk that large amounts of money allocated to Romania from European funds to be lost, an additional amount of 100 million euros will be reallocated to new calls for projects to finance small and medium-sized enterprises.

According to estimates made by beneficiaries who have signed financing contracts for projects approved through the Regional Operational Program, the amount of non-refundable financial aid required to be settled by the end of 2018 will be 236 million euros.

Without these changes, the program’s financial framework would have diminished accordingly with de-committed amounts, with the risk that some of the financing contracts that will be signed by the end of 2018 (both for calls already launched and for those will be launched in the forthcoming period) to be funded only subsequently from the state budget, in the absence of co-financing by the European Union.

Promoting technology transfer is one of the main directions to which European funds are channeled in this period. The funds planned for this type of business are made available to applicants through the Regional Operational Program, the total amount of which exceeds 200 million euros. Eligible technical support centers, scientific parks, as well as the partnerships made by the small and medium-sized enterprises with them are eligible for non-rewarding support. These funding programs will close, as planned by the authorities, in September.

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