The amendments to the state aid schemes governed by G.D. 807/2014 on investment in assets and by G.D. 332/2014 on creation of workplaces that were proposed on 17 July 2020 by the Romanian Ministry of Public Finances (MoF) have just become enforceable.
The most important information is that the duration of the scheme has been extended to 31 December 2023, instead of the current ending date of 31 December 2020. Thus, the MoF will be permitted to issue financing approvals until the end of 2023. Other relevant amendments are:
- The standard cost ceilings for construction projects of at least EUR 350 m² have been eliminated, so the entire value of any construction projects may be eligible for state aid.
- State aid payment requests can be submitted to the MoF at any time during the year, i.e. the current September 30 deadline for submission of the documentation has been eliminated; moreover, it is no longer necessary to notify the MoF if payment of the full state aid approved for a particular year is not requested.
- The deadline for payment of contributions to the state aid budget may be extended by two years upon request beyond the currently applicable period of the implementation period of the investment and five years after its finalization.
- The value of the obligatory contributions must be equivalent to at least the total value of the state aid disbursed by the MoF.
- Applicants are no longer required to present proof of a real right to the investment location when submitting their financing requests, but they must provide this proof by a maximum of six months after issuance of the financing approval.
- Applicants are no longer required to present proof of the necessary co-financing resources when submitting their financing requests, but they must provide this proof by a maximum of six months after the issuance of the financing approval.
- Certain deadlines for the analysis of state aid approval and payment documentation have been clarified in uniform terms of working days. Thus, the average duration of the project approval process may be up to approximately 3.5 months.
- Certain quantitative (e.g. economic profitability) and qualitative (e.g. competition) ratios have been removed from the MoF's project analysis; moreover, existing entities that have registered positive turnover rentability in 1 of the last 3 years are now eligible.
- The demonstration of a project's incentive effect has been simplified by eliminating some requests.
- Various clarifications have been added as regards the state aid payment process and revocation of the financing approval.
These modifications, together with a series of other propositions, were discussed with the private sector recently. The proposals that are approved will be included in a new Applicant’s Guide to be published.
The Ministry of Public Finances and its representatives have been working closely with the investment environment, approaching the private sector with a series of measures which are meant to make the issuance of grants through the state aid scheme more flexible.
By Iulian Sorescu, Partner, and Bogdan Nicolae Paunescu, Associate, Noerr