The Ministry of Public Finance, through the Department of State Aid, has supplemented the budget allocated for GD 807/2014 funding program aiming at companies that are seeking new investments. Over 313 million euros are available for start-ups, SME’s, and big companies, but only for those who intend to use the funding for investments of more than 1 million euros. This way, the companies which do request State Aids through GD 807/2014 can get up to 50% of the total investment value, but no more than 37.5 mln. euros.
The State Aid Scheme is targeting regional development, through initial investments in fixed activities of high technology for obtaining products with high added value regardless of the size of the beneficiaries. This Scheme has been established under the provisions of EU Regulations no. 651/2014 from 17 of June 2014 to declare different aids compatible with the internal market and to safely apply art. 107 and 108 from the treaty, available between 01.07.2014 – 31.12.2020. The total value of the project must be at least 4.5 million RON. This value has been determined to be at approximately 1 million EUR.
“More and more companies have requested state aids offered by the Romanian Government through different financial schemes in the last years, as part of a national strategy to develop the local businesses where it was needed. Using the funds from the GD 807/2014 state fund scheme, the companies can obtain up to 50% of the total investment value, for projects of more than 1 mln. euro invested. There is a 50% non-reimbursable support for all country regions except the western territory (Arad, Timis, Hunedoara, Caras-Severin counties) and Ilfov, where companies can get up to 35% non-reimbursable funds, while in Bucharest the support is up to 10%. We have succeeded in getting different types of funding for our clients so far, in production and services, and for 2020, last year to apply this scheme, we expect that the number of funding requests to triple, especially in the H2 2020”, said Roxana Mircea, founder and partner of the local consultancy agency REI Finance Advisors specialized in professional services for attracting EU funds or state aid for local and international companies with activity in Romania.
The grant agreements may be issued by 31st December 2020, in compliance with the legislation of State Aid, within the limit of commitment appropriations and budget appropriations approved through the annual budgetary laws.
“Since the evaluation of the projects through GD 807/2014 takes between 4-6 months, we recommend that the interested companies should submit the investment project no later than August so that they have time for the evaluation of dossiers and for receiving the financing agreement by the deadline of 31.12.2020”, said Roxana Mircea.
The companies that can request for State Aids in this Scheme can be start-ups or active companies, SME or big enterprises, with legal personality and with no undergoing difficulties.
Over 1.4 bln. EUR of projects have been submitted and more than 10,000 new jobs have been created so far through GD 807/2014
According to official data, by the end of 2019, there were more than 50 financing agreements issued through GD 807/2014, the total value of the projects amounting to over 1.4 bln. EUR leading to the creation of more than 10,000 new jobs. Among the companies that have successfully applied for this program, there is Automobile Dacia, Bosch, Arctic, Teraplast, Pirelli, or Therme Bucharest.
“Despite the period of time we have been crossing, the already started projects or in different stages of execution are proceeding with their investments, while the number of companies that have been seeking for state support keep on rising. We are in discussion with lots of companies, and we have many cases under preparation, which makes us believe that, by the end of this year, we will get the necessary funding for our partners. In order to submit the projects, the companies should own the land, free of any fees, a general estimate, a general letter of intent to show the co-financing capacity, in case of a bank loan. If it comes to a project which includes a warehouse construction/equipment acquisition it is needed to provide a precise/particular process flow and financial previsions that forecast the tax payments for the next 5 years, at least the same as the value of state aid received”, added Roxana Mircea.
Within the business plan, the company that applies for state aid must prove the existence of binding contracts / letters of intent for medium and long periods of time (3-5 years) to sell the products that will be made in the new investment project.
Among the activities and eligible expenses that can be made in the GD 807/2014 Scheme, there are the technical installation acquisitions, equipment, new constructions, rental buildings, as well as the acquisition of intangible assets, both production and deposit.
Amongst the eligible areas of activity there are:
- Advertising production;
- Beauty products;
- Chemical industry;
- Construction products manufacturing;
- Electronic equipments manufacturing;
- Hotels and other accomodation units;
- IT programming & consultancy, Web portals;
- Medical assistance;
- Metalworks, structures, products and components;
- Paper production;
- Plastic made products;
- Stone processing;
- Textile confections, footwear, leather goods;
- Wood and furniture processing;