State aid means many things to many people in Romania. The issue is that there are funds available for State aid in Romania which have not and are not being accessed. Although Romania receives per capita less State Aid than any other European country this is then even more reason for it to be used and applied for by its companies and citizens.
The EU has made available sums of money which are not being used because the projects are not there, or those that are there do not fit the required criteria. As the funds are advanced on a sectorial and time basis, if these funds are not used they will and could be eventually lost. Some of the State Aid is in the form of grants (non refundable loans) and can therefore be a very good source of funds.
There are a number of Romanian Governmental schemes available which can be taken up. There are funds available under the JEREMIE Initiative in Romania which is in part a venture capital fund. These are aimed at new incoming investment. This scheme at present requires that the scheme is available only until 30th June 2014.
All governments of Romania since 2000 have recognized that part of Romania’s capital is the skill of its students and people in the Romanian IT industry. Many western European companies and those from North America are used to working with IT specialists from Romania and indeed are moving some if not all their IT and back office to Romania. The concept of on-shoring is now that many companies are moving their outsourced services from India and Far East back to Europe. Romania is a key player in this new world.
There are a number of schemes which are currently available ranging from setting up new businesses as well as investments in energy efficient projects. The Romanian Government has limited the time when these funds are available and the cut off time for some of these projects being June this year. Anyone who thinks that they may wish to take advantage of any of these schemes should examine the position quickly and contact the relevant Government officials.
Our Romanian lawyers have been active in advising clients as to what funds are available and indeed we have as an international law firm in Romania received a number of queries as to what funding schemes are available.
One of the issues that all applicants face is actually locating the best program for themselves; also as mentioned earlier the Romanian Government limits the times when these funds are available. As this year and next year will be election time there should be more work for Romanian law firms in this regard as the Government will no doubt try to stimulate the economy. This will help the economy generally and is to be applauded.
Another form of State Aid which his not recognized as such is the tax advantages given to employees in the IT field. The elimination of income tax on employees’ salaries is a form of State Aid. Again as in all programs the requirements have to be strictly observed but their benefit should not be overlooked.
So if you are thinking of investing in Romania you should consider the possibility of State Aid in all its formats.