State aid in Romania is coordinated by the Romanian Ministry of Labor, Family and Social Protection1. The government provides national treatment for foreign investors and does not differentiate treatment due to the source of capital2.
Romania stands to receive 27 billion EUR in grants and loans from “Next Generation EU” funding via the National Resilience and Recovery Plan (NRRP)2. The NRRP funding, which will be disbursed between 2021 to 2026, aims to support Romania’s green transition, digitalization efforts, and health system resilience2.
During the COVID-19 pandemic, the Government of Romania supported businesses and workers by broadening eligibilities for unemployment benefits, enabling employers to adopt flexible work models, and instituting a temporary credit and lease payment moratorium2.
The Romanian Government issued several state aid measures for SMEs as well as large companies to tackle the fallout from the coronavirus outbreak3. The scheme for large companies was approved by the European Commission but the implementing measures are now in the process of being adopted by the Government.
In addition to these measures, companies could also benefit from other measures available at EU level3. Small and medium-sized enterprises (SMEs), i.e. companies that have less than 250 employees and a net annual turnover of up to EUR 50m or total assets not exceeding EUR 43m according to the latest approved financial statements can apply and benefit from these support measures.
The eligibility criteria for state aid in Romania are as follows:
- Size of the enterprise: The beneficiaries of the measure are small and medium enterprises (SMEs) active in Romania. SMEs are companies that have less than 250 employees and a net annual turnover of up to EUR 50m or total assets not exceeding EUR 43m according to the latest approved financial statements1. Small mid-cap enterprises, meaning an enterprise whose number of employees is equal to or exceeds 250 but does not exceed 499, the annual turnover of which does not exceed EUR 100 million or the annual balance sheet of which does not exceed EUR 86 million, can also benefit from the scheme under the same conditions as SMEs1. Individuals/entities of liberal professions can benefit from the scheme if they meet the qualification criteria for SMEs or small mid-cap enterprises.
- Sector of activity: Companies active in the following areas cannot benefit: gambling, production or sale of weapons, ammunition, explosives, tobacco, alcohol, substances under national control, narcotics and psychotropic substances, investigation and protection activities except for protection and guard activities, as well as services for the security systems; financial intermediation, except for the activities ancillary to the financial intermediation; insurance, except for the activity of the insurance agents and brokers; real estate transactions, except for the real estate transactions as activity of real estate agencies; lease and leasing activities.
- Incentive effect: The aid must change the behavior of the recipient, which would not have happened otherwise.
- Need for state intervention: The aid must bring material improvement, which the market itself could not achieve.
- Appropriateness of the aid measure: The aid must be appropriate to meet the policy objective.
Please note that these are general criteria and specific aid schemes may have additional eligibility criteria.
The application process for state aid in Romania involves several steps:
- Eligibility Check: The first step is to check whether your project is eligible for state aid. This involves assessing the size of the enterprise, the sector of activity, and other criteria.
- Preparation of Application File: If the project is eligible, the next step is to prepare the application file. This includes the application form, a business plan, and other accompanying documents.
- Submission of Application: The application file is then submitted to the relevant authority. For some schemes, this is done via an online platform provided by the Romanian authorities. For example, during the COVID-19 pandemic, undertakings had to submit an online request to the National Fund for SMEs (FNGCIMM), which assessed the eligibility criteria provided for in the state aid scheme and issued an approval in principle accordingly.
- Assessment of Application: The authority will assess the application and decide whether to grant the state aid.
- Implementation of Project: If the application is approved, the project can be implemented. It’s important to note that there are often specific requirements for how the project must be implemented in order to receive the state aid.
- Monitoring and Compliance: After the project is implemented, there is usually a monitoring period where the authority checks whether the project has been implemented in accordance with the applicable procedures. There may also be requirements for preparing documents for the payment of the state aid and notifying the Ministry of Public Finance of any changes in the investment structure.
Please note that these are general steps and the actual process can vary based on the specific details of the state aid scheme and the project