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Supporting SMEs in overcoming the crisis caused by Covid-19

In this issue:

Order for approving the State Aid Scheme – Support for SMEs in overcoming the economic crisis caused by the Covid-19 pandemic

 

Order no. 1060/2857/2020 approves the aid scheme which is intended to support SMEs in order to overcome the economic crisis generated by Covid-19. 

State aid provider and beneficiaries

The Ministry of European Funds (MFE) is the state aid provider. The scheme is implemented by MFE through the Managing Authority of the Competitiveness Operational Program (MA POC).

The Ministry of Economy, Energy and Business Environment (MEEMA), in partnership with the agencies for SMEs, investment attraction and export promotion (AIMMAIPE) and the Special Telecommunications Service, is the administrator of the scheme for the implementation of fixed amount microgrants, grants for capital work and grants for investments in productive activities.

The state aid beneficiaries of are:

-small and medium-sized enterprises (SMEs);
-authorized natural persons (ANP);
-individual medical offices (IMC);
-non-governmental organizations (GNOs).
 

Duration and Budget of the Aid Scheme

The State aid scheme applies from 11 September 2020 to 31 December 2020. State Aid beneficiaries must apply for funding by 30 October 2020, and the financing contracts must be concluded by 31 December 2020.

The total budget allocated to the scheme is the equivalent in lei of the amount of EUR 935,750,500, divided between the 3 measures as follows:

   • Measure 1 - Microgrant in fixed amount, in the form of unit cost: the equivalent in lei of the amount of EUR 100,000,000;
   • Measure 2 - Grant for working capital, in the form of unit cost: the equivalent in lei of the amount of EUR 307,500,000;
   • Measure 3 - Grant for investments in productive activities: the equivalent in lei of the amount of EUR 478,250,500. The budget for this measure is divided between the 8 regions of Romania, as follows: 15% for the Bucharest - Ilfov region, and 85% for the remaining 7 regions (North-West, West, Center, South, South-West, South - East, North-East) and between the 7 regions the allocation is divided on the basis of a pro-rate established on the basis of two indicators - population and area.

 

Maximum amount of state aid, beneficiaries, eligibility criteria and eligible expenditure

Measure 1 - Fixed amount microgrant

The maximum value of the aid is the RON equivalent of the amount of EUR 2,000/State Aid beneficiary, grantable only once, in a single installment, in the form of a unit cost.

The State Aid beneficiaries are:

-SMEs that prove through the submitted financial statements that they do not have employees with an individual employment contract on 31.12.2019;
-PFA, NGO with economic activity in certain fields;
-authorized natural persons/individual medical offices in the field of health, if they were involved in the transport, equipment, evaluation, diagnosis and treatment of patients diagnosed with COVID-19, who did not benefit from the medical incentive granted based on Government Emergency Ordinance no. 43/2020 for the approval of some support measures settled from European funds, as a result of the spread of the coronavirus COVID-19, during the state of emergency.
 

The estimated number of state aid beneficiaries of is a maximum of 50,000.

 

Measure 2 - Working capital grant

The amount of the aid is set as follows:

-for SMEs / NGOs carrying out activities in the field of education with a turnover for 2019 between EUR 5,000 and Eur 13,500, the value of the grant is EUR 2,000;
-for SMEs/NGOs operating in the field of education with a turnover for 2019 between EUR 13,501 and EUR 1,000,000, the amount of the grant is set at 15% of turnover and may not exceed the amount of EUR 150,000.

The estimated number of beneficiaries is a maximum of 100,500.

State Aid beneficiaries under measures 1 and 2 must meet certain general and specific eligibility conditions. Related eligible expenses are:

-expenses regarding the stocks of raw materials, materials, goods;
-current and outstanding debts to current suppliers;
-expenses regarding the rent based on a concluded legal contract;
-expenses regarding the acquisition of services and repairs necessary for the basic current activity, except for consultancy services, studies and other categories of indirect services with the current activity;
-expenses regarding medical protection equipment;
-expenses regarding the acquisition of inventory items;
-expenses regarding the acquisition of equipment, machinery, installations, technologies, independent endowments necessary for the resumption of the current activity;
-expenses with the payment of debts to the state budget.
 

Measure 3 - Grant for investments in productive activities

The maximum value of the aid is the equivalent in lei of the amount between EUR 50,000 and 200,000.

State Aid beneficiaries under measure 3 must meet certain general and specific eligibility conditions. The related expenses are:

-expenses for acquisition of constructions, acquisitions of equipment, including ICT equipment
-expenditures for the storage of medical equipment, medicines, sanitary materials intended for emergency intervention
-expenditures for equipment, including equipment, software, technology, machinery, independent equipment, specific office furniture, etc.
 

The EY specialized team is available to clarify the above issues.

 
Prepared by:
Andreea Cosmănescu ― Tax Senior Manager - Direct Tax
Teona Braia ― Tax Senior Consultant - Direct Tax
Ecaterina Boca ― Senior Consultant - Knowledge Management Department
 
For additional information, please contact:
Alex Milcev, Partner ― Tax & Law Leader Romania
Mihaela Mitroi, Partner ― Southeastern Europe Tax and Law Leader
 
Ernst & Young SRL
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