INCENTIVES FOR INVESTMENTS IN INDUSTRIAL PARKS

Moving to an industrial park is probably the best solution for companies, due to incentives available ranging from tax privileges to easier access to infrastructure, lower prices for land rental, simplified administrative procedures and state & minimis aids.

Any economic operator, Romanian and/or foreign legal person, NGO, research institute and other entity without legal personality, carrying out an economic activity, scientific and / or technological development, agro-industrial, logistics and innovative, industrial research, etc., may be a resident of an industrial park.

Investments in industrial parks are regulated by the Law No. 186/2013 on setting up and operating such parks. The law provides for the tax incentives available to both the administrator and the residents of industrial parks provided that the conditions laid down in the Minimis Aid Schemes regulated by Order No. 2980/2013 are met.

This Order was amended by Order no. 2056 of December 30, 2021, approving the conditions for granting support measures for investments in industrial parks (the minimis aid for investments in industrial parks and the regional state aid supporting initial investments in industrial parks).

Both Schemes apply until 31 December 2023.

The Minimis Aid Scheme is a support mechanism for investments made by companies operating in industrial parks. The Regional State Aid Scheme provides support for initial investments made by companies.

However, the State Aid Scheme does not provide financial support for "major investment projects", i.e. investments of more than EUR 50 million.

The above-mentioned minimis aid and regional State aid consist of:

• Exemption of payment of the tax on buildings that are part of the industrial park;
• Exemption of payment of the tax on land of the industrial park ;
• Other exemptions, subject to the approval of the local public administration, as for example the payment of different tax due to local budgets for the issuance of any urban planning certificates, building permits and/or demolition permits for the land and buildings of the park;
• Other facilities that may be granted, under the law, by the local public administration.

Eligibility Criteria

In order to benefit from the aid granted under the two schemes mentioned above, companies are required to fulfill several cumulative criteria, with some common to both schemes and others specific to each Scheme.

Among these common eligibility criteria to be met by companies there are:

• carrying out its activity in an industrial park;
• carrying out an economic activity;
• not to fall into the category of companies in distress, as defined by the Communication of the European Commission – Guidelines on State aid for rescuing and restructuring firms in difficulty (2004/C244/02);
• not be subject of a decision for the recovery of a State aid or, if such a decision has been issued, then it must have been enforced and the receivable must have been fully recovered.

Furthermore, the company must obtain the agreement in principle from the local public administration to benefit from the minimis aid or the State aid.

In order to qualify for minimis aid, a company must fulfil the above conditions and submit a feasibility study or investment plan showing the eligible expenditure.

Companies that have already benefited, in the preceding 2 fiscal years or during the current fiscal year, from minimis aid exceeding the limit provided for by law will not be eligible for minimis aid.

The applicant for State aid must, in addition to the criteria listed above, prove that they intend to make an initial investment in an industrial park and that they have not already applied for or received other types of State aid or minimis aid for the same eligible costs.

The law defines the initial investment as: (I) an investment in tangible and intangible assets related to starting-up of a new unit, extending the capacity of an existing unit, diversifying production of a unit by adding products not manufactured before or fundamentally changing the overall production process of an existing unit; or (II) the purchase of assets directly related to a unit, provided that the said unit had been closed had it not been purchased by the investor; the investor must not be related to the seller and such purchase excludes a simple purchase of company shares.

Neither minimis nor regional aid may be granted to companies operating in certain fields such as: fishery and aquaculture, primary agricultural production, processing and sale of agricultural products.

Amount of the aid The minimis aid is granted to companies located in industrial parks, up to a maximum of EUR 200 000 (the equivalent in Lei) per beneficiary, over a period of 3 consecutive tax years, with a ceiling reduced to EUR 100 000 (the equivalent in Lei) for road transport companies.

Regional state aid is granted in developing regions labelled as "assisted areas". These regions are expressly provided for in the Aid Scheme. The regional aid amount may not exceed 50%, 35%, 15% or 10% of the cost of the investment, depending on the period during which the aid is granted and the beneficiary region. The maximum amounts of aid may be increased by a maximum of 20 % for small-sized enterprises and by a maximum of 10 % for medium-sized enterprises.

Eligible costs

Eligible costs are costs related to tangible and intangible assets used by the beneficiary company.

Costs relating to VAT, taxes, permits, commissions, packaging, transport, commissioning, or training of staff to use the purchased assets are not eligible. For large companies, costs related to intangible assets are only eligible up to 50% of the total cost of the initial investment.

At the end of 2021, Romania had 101 industrial parks spread across the country, highly concentrated in the counties of Prahova (16), Cluj (12), Brasov (9) and Bihor (7). Of these industrial parks, 19 were Greenfield-type industrial parks.