Regional aid

Updated last 26.03.2021

“Regional aid” is a state aid for stimulating and encouraging the economic development of regions in disadvantageous situation in the European Union, which could be recognized as compatible pursuant to article 107, paragraph 3, letters “a” and “b” of the Treaty of the Functioning of the European Union. The regional aids could be investment or operating ones.

Regional investment aid

Regional investment aid

„Regional investment aid“ means regional aid, granted for initial investment [1] or initial investment for the benefit of a new economic activity [2] i.e. regional investment aid is provided for projects for initial investments. Eligible expenses, under this aid include:

  • Costs for tangible and intangible assets;
  • Payroll costs, jobs creation costs, as a result of initial investment, calculated for a two-year period; or
  • Combination of costs under certain conditions.

The investment should be maintained in the region for a minimum of 3 years (for small and medium-size enterprises).

Regional operating aid

Regional operating aid

„Regional operating aid“ means aid for reduction of current expenses of a certain enterprise, that are not related to an initial investment. This includes costs for payroll, materials, sub-contracted services, communications, electricity, maintenance, rent, management, etc. It excludes depreciation expenses and financing expenses, if such are included into the eligible costs for investment aid. Eligible under this aid are:

  • the extra costs for carriage of goods, produced in regions, meeting the terms and conditions for operating aid, and the extra costs for carriage of goods, subject to additional processing in these regions (under the provisions stipulated in Commission Regulation (EU) No 651/2014, or
  • the extra operating costs, which do not constitute carriage and transportation expenses, made in the most remote regions as a direct consequence of one or more of the permanent adverse conditions, stipulated in article 349 of the Treaty (when the expenses meet the requirements, provided for in Commission Regulation (EU) No 651/2014).

[1] Initial investment is investment, related to:

  • Establishment of a new facility;
  • Expansion of an existing facility;
  • Diversification of the product range of the facility with new, supplementary products;
  • Radical change of the overall production process in an existing facility.

Investments in an asset which replaces existing asset is not considered an initial investment.

[2] „Initial investment for the benefit of a new economic activity“ means:

  • Investment in tangible and intangible assets, related to the establishment of a new economic facility or the diversification of the activity at the economic facility, provided that the new activity is not the same or similar to the activity, exercised by the economic facility in the past;
  • Purchasing the assets of an economic facility, which has been closed or would have been closed, unless purchased, and has been purchased by an investor, not related to the seller, provided that the new activity, which is to be carried out with the acquired assets, is not the same or similar to activity, performed in the economic facility, before the purchase;