zondag 11 september 2011

Government Decision no. 1680/2008 state aid scheme Romania

Government Decision no. 1680/2008 state aid sheme Romania

The Community Acquis in the field of state aids allows granting regional state aids to enterprises, under the Community Guidelines on regional state aid 2007-2013 (the Official Journal of the European Union no. C54/2006), and the European Commission Regulation no. 800/2008 declaring certain categories of aid compatible with the common market in application of Articles 87 and 88 of the Treaty (European Union Official Journal no. L 214/2008).

The aid scheme established by the Government Decision no. 1680/2008 on ensuring sustainable economic growth, with its subsequent modifications and additions, applies the provisions stipulated by the European Commission Regulation no. 800/2008.
The duration of the state aid scheme (established through the Government Decision no.1680/2008) is of 5 years that is for the period between 2007-2013, the final maximum budget for this program is the equivalent of 1 billion Euros, thus a medium annual budget of 200 million Euros, not exceeding the annual budgetary limits during these five years. The estimated total number of enterprises that will benefit from the scheme is around 150, which means that there will be around 30 beneficiary enterprises per year.

The maximum amount of the state aid that an economic operator can benefit from in accordance with this scheme is the equivalent in LEI of 28.125 million Euros. For the investments and jobs developed in the developing region no. 8 of Bucharest – Ilfov, the maximum level of state aid which can be obtained by an economic operator is the equivalent in LEI of 22.5 million Euros.

The state aid can be granted to businesses that will make initial investments, have submitted an application for the Grant Agreement and the authority responsible for the scheme administration have subsequently confirmed in writing that, after a thorough examination, the project meets in general the eligibility criteria established in the state aid scheme, before starting the works .

There are considered eligible the costs related to an initial investment made in the same area, concerning the following:

a) either the tangible and/or intangible assets related to the creation of a new business, the development of an existent one, the diversification of the production of a business for new markets, or a fundamental change in the production process of an existent business;
b) either the purchase of fixed assets directly related to a business, when that business had been closed or would have been closed without that purchase, and the assets are purchased by a independent investor. The mere acquisition of the shares of an enterprise shall not be considered an investment.

The state aid scheme is applied to enterprises from all sectors, save those stipulated by the European Commission Regulation no. 800/2008 declaring certain categories of aid compatible with the common market in application of Articles 87 and 88 of the Treaty (General Block Exemption Regulation – E.C.O.J. series L no.214/2008), as follows:

a) aids favouring fisheries and aquaculture, as they are regulated by the (EC) Regulation no. 104/2000;
b) aids favouring the primary production of agricultural products, stipulated in the Annex I to the European Communities Foundation Treaty;
c) aids favouring processing and marketing agricultural products activities, in the following cases:
 When the amount of the aid is established on the basis of the price or the quantity of such products purchased from primary producers or marketed by these enterprises;
 When the grant of the aid is conditioned by the obligation to direct it, partially or totally, to the primary producers;
d) aids favouring activities in coal sector;
e) regional aids favouring activities in metallurgic sector;
f) regional aids favouring activities in naval constructions sector;
g) regional aids favouring activities in synthetic fibres sector.
This scheme does not apply to enterprises that are in one of the following cases:
a) those “undertakings in difficulty” in the sense of the European Commission Regulation no. 800/2008 declaring certain categories of aid compatible with the common market in application of Articles 87 and 88 of the Treaty (General Block Exemption Regulation);
b) there are undertakings which are subject to an outstanding recovery order, if this recovery order has not been already carried out, according to the legal provision in force.
The enterprises, under this scheme, cannot benefit from the following types of state aid:
a) aids favouring export-related activities, such as aids directly linked to quantities exported, establishment and operation of a distribution network, or other current expenses related to the export activity;
b) aid contingent upon the use of domestic over imported goods;
c) aid to operation.
In order to ensure the complementarity of regional state aids schemes, the enterprises shall not benefit from state aids under this scheme if for the same eligible costs of the initial investment they have received state aid or de minimis aid from other state aid providers.

The provisions of this state aid scheme are applied to undertakings registered according to the Law no. 30/1990 on trading companies, republished, with the subsequent modifications and additions, which make investments in Romania, and fall into one of the following categories:

a) they make an initial investment, of 5 to 10 million Euros, equivalent in Lei, and thus creating at least 50 jobs;
b) they make an initial investment, of 10 to 20 million Euros, equivalent in Lei, and thus creating at least 100 jobs;
c) they make an initial investment, of 20 to 30 million Euros, equivalent in Lei, and thus creating at least 200 jobs;
d) they make an initial investment, exceeding 30 million Euros, equivalent in Lei, and they create at least 50 jobs.

The enterprises that meet cumulatively, at the time of submitting the application, the following eligibility criteria, shall benefit from individual specific allocations under this scheme:

a) are registered according to the Law no. 30/1990 on trading companies, republished, with its subsequent modifications and additions, making investments in Romania;
b) intend to make an initial investment that falls into one of the categories provided at letters a) to d) of Article 2 of the Gov. Dec. no. 1680/2008.
c) does not have outstanding debts to constituent budgets of the general consolidated budget.
d) are subject to foreclosure, bankruptcy, judicial reorganization, dissolution, liquidation or other situations regulated by law;
e) do not fall into the category of “undertakings in difficulty” according to the European Commission Regulation no. 800/2008 declaring certain categories of aid compatible with the common market in application of Articles 87 and 88 of the Treaty (General Block Exemption Regulation)
f) they are not subject to state aid recovery orders, or such orders have been already carried out, according to the legal provisions in force;
g) at the time when they apply for the state aid, they submit a viable investment plan (expenses shall be detailed: quantity, price, amount), and a technical-economic study
made by a specialized company, which should prove the economic efficiency of the investment, respecting the indicators provided in Chapter III of this guide;
h) do not make investments and do not create jobs for which they request state aid under this scheme, in activity sectors exempted by the Gov. Dec. 1680/2008.
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