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Updated State Aid Scheme: Start-up Nation – Romania for new business ideas

On 7th December 2018, the Romanian Government approved an emergency ordinance for the support of the setting up of new small and medium-sized enterprises (SMEs) proposed by the Ministry for Business Environment, Trade and Entrepreneurship.

As per the reasoning in the recitals of the ordinance, SMEs represent 99.8% of the enterprises’ population within the EU and 99.7% in Romania. Most of the SMEs are micro-enterprises, with maximum 10 employees (93% of the companies in the non-financial market). Romania is on the last rank in the EU as regards SMEs, with only 2.2 SME/100 inhabitants, which is less than the EU average of 4.5. SME/100 inhabitants.

According to the the public statements of the Prime Minister on Start Up Nation scheme, the 2017 version of this scheme was a big success, with 8,000 new business and over 20,000 new workplaces created. The Start Up Scheme 2018 is a simplified form of the 2017 one, especially for young entrepreneurs, including also forms of advance funding. The scheme is supporting 10,000 projects and is targeting especially the areas in Romania where the number of SMEs is reduced.

The Start-up Nation – Romania State aid scheme was implemented for a maximum yearly number of 10,000 SMEs beneficiaries for maximum amount funded of RON 200,000/beneficiary (or EUR 44,000), representing 100% of the eligible expenses.

Submission of the business plan and of the application is made online.

Beneficiaries: The beneficiaries of the Program Start Up Nation 2017-2020 for stimulating the set-up of SMEs are companies set up after 30 January, 2017, which upon the date of filling in of the application, fulfil the eligibility criteria and the ones applicable for de minis aid scheme for this programme (provided in a separate enactment of 2017, such as privately held SMEs having authorised relevant NACE code, etc), performing activity in the production, creative industry, services and trade. Through the proposed changes was removed the previous condition for the beneficiaries to fulfil the specific criteria for EU funding.

Advance Funding: A new aspect of the new enactment is the possibility for the beneficiaries of the Start-up Nation – Romania scheme to request an advance of up to 30% of the overall eligible expenses. Also, it is permitted for beneficiaries to obtain a lump sum of the 2nd tranche, without it being necessary to submit justifying documents, for expenses related to salaries, rent, utilities and accountancy services, provided that at least 2 new workplaces for indefinite period/full-time shall be created.

New added criteria for the evaluation of the business plan: There was introduced a new criterion for evaluating the business plan submitted, namely the density of the SME, for localities (rural or urban) where the number SMEs/100 inhabitants are less than 4, the applicant shall obtain 20 points. This is a high score, in comparison with 5 points, obtained for applicants of SMEs located in localities (rural or urban) where the number SMEs/100 inhabitants is higher or equal with 4.

Also, another criterion introduced is that none of the shareholders of the applicant should have been a director or shareholder in a company declared insolvent or bankrupted in the previous 5 years (2013-2017).

The Government Emergency Ordinance no. 108 was published in the Official Gazette of Romania no. 1060 as of 14 December 2018.

Should you have any questions or need further information in relation the above, please contact our Corporate Team which includes Managing Partner Silviu Stratulat at sstratulat@saa.ro, Partner Andrei Albulescu at aalbulescu@saa.ro and Partner Ramona Iancu at riancu@saa.ro. or call the Stratulat Albulescu Attorneys at Law office on +40 (21) 316 87 49.

Stratulat Albulescu Attorneys at Law is a young and dynamic Romanian law firm, providing legal advice as necessary in all business sectors and in all areas of Business Law and Dispute Resolution in Romania. Our team is comprised of lawyers who are leaders in their disciplines.

The firm works in close co-operation with highly-respected law firms throughout Europe and elsewhere and has significant experience in cross-border transactions, with its lawyers providing legal advice in the English, German, French, Italian, Romanian and Spanish languages.

 

 

 

This is a Legal Update from Stratulat Albulescu Attorneys at Law. This document provides a general summary only and is not intended to be comprehensive nor legal advice. Specific legal advice should always be sought in relation to the particular facts of a given situation.

 

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