FINANCIAL AIDS FOR COMPANIES CREATING NEW JOBS

FINANCIAL AIDS FOR COMPANIES CREATING NEW JOBS

The Romanian State continues its policy of encouraging regional investors. Thus, companies creating new jobs in order to develop certain regions may receive a financial aid from the State, as per Government Decision no. 332/2014, that has recently entered into force.

The amount of the State aid varies depending on the region and on the investment, as well as on the year during which the application for the aid is made; companies shall have to accomplish several conditions in order to apply for the aid. Hereinafter you can find several precisions regarding the amount of the aid, as well as eligibility conditions...

OBJECT, DURATION AND AMOUNT OF THE AID

This State aid consists in the refund of salary costs generated by the creation of new jobs for a period of 2 consecutive years. The creation of new jobs must involve the increase of existing jobs compared to the average of the 12 months preceding the financing application. Moreover, these jobs must be maintained for a period of 5 years after their creation (3 years for SMEs). This aid shall be granted between 2015 – 2025. Nevertheless, the last financing application shall have to be submitted in 2020, at the latest. The estimated number of beneficiaries is 1,500 companies. The total budget amounts to 600 million Euros and the annual budget of the State aid scheme is 100 million Euros.

The maximum amount of the State aid which can be granted to a company, in relation to eligible expenses (salary costs) is:

1. 15% of the eligible expenses, but no more than 11.25 million Euros –2014 – 2017 period.


2. 10% of the eligible expenses, but no more than 7.5 million Euros –2018 – 2020 period.


3. 35% of the eligible expenses, but no more than 26.5 million Euros – for the West and Ilfov regions –2014-2020 period.


4. 50% of the eligible expenses, but no more than 37.5 million Euros – North-West, Center, North-East, South-West, South-Muntenia, South-West, Oltenia regions.

CONDITIONS IMPOSED TO BENEFICIARIES

The aid shall only be granted if it has a stimulating effect. Stimulating effect is accomplished if the following three conditions are fulfilled:

1. The company submits an application, before beginning the investment;


2. The documents submitted prove the fact that the project shall not be profitable for the company in the respective region or that it shall not be accomplished in that particular region without a State aid;


3. The investment project does not begin before receiving the approval for financing.

Companies wishing to obtain a State aid must fulfil the usual legal conditions in order to benefit from this type of aid. Nevertheless, this Decision imposes additional conditions, for example: companies already incorporated must have a particular return on turnover. Moreover, new companies (created in the year when they submitted the financing application) must have a minimum registered capital of 30,000 Lei (approximately 6,700 Euros)

As regards investments, they also have to fulfil certain conditions:

1. Be considered an initial investment – namely an tangible or intangible investment regarding the creation of a new unit, the extension of the capacity of an existing unit, production diversification for an existing unit or a fundamental change in the production process of an existing unit;


2. Create at least 20 jobs, out of which 3 jobs for disadvantaged workers;


3. Be viable and increase the company’s economic efficiency, according to the business plan.