In October 2007, the Romanian government adopted Government
Decision 1165 for the promotion of economic growth by
supporting investment (GD 1165). GD 1165 applies Commission
Regulation 1628/2006 on the application of Articles 87 and 88
of the treaty on national regional investment aid (Regulation
1628). It creates an aid scheme, which is exempted from
notification, in accordance with the criteria in Regulation
Under this aid scheme, undertakings may benefit from certain
non-reimbursable funds, granted through the budget of the
Ministry of Economy and Finance, to carry out investments in
material or immaterial assets or for the creation of new jobs.
To qualify for aid, the investment must comply with certain
criteria regarding, among others, the nature of the investment
and the undertaking benefiting from aid.
The aid scheme covers only initial investments, defined as
being an investment in material and immaterial assets relating
to the setting-up of a new company, the extension of an
existing company, the diversification of the output of a
company into new additional products, or a fundamental change
in the overall production process of an existing company. An
initial investment is also represented by the acquisition of
capital assets directly linked to a company, when it has closed
or would have closed had it not been purchased.
To benefit from aid, the company must meet certain
eligibility criteria. It must be registered under Romanian
Company Law, with headquarters and activities in Romania. It
must invest more than €30 million ($44 million), and the
initial investment should generate at least 300 new jobs. It
should not be in difficulty (as defined by the relevant
European regulations), nor should it be subject to a procedure
for the recovery of previously granted state aid. Any area of
activity is eligible for aid, except for fishery and
aquaculture, coal and steel, transportation, shipbuilding,
synthetic fibres, and the production of the agricultural
products listed in Annex I of the EC Treaty.
The maximum amount of the aid is the RON equivalent of
€28.125 million ($41 million), if the company carries out
investments and creates jobs following an initial investment in
any region, and of €22.5 million, if the initial
investment is carried out in Bucharest or Ilfov. The total
maximum budget of the aid scheme created by GD 1165 is
€500 million, and the annual limit is established through
the relevant budget. For 2007, the budged for this aid scheme
is €10 million.
The aid is granted if the beneficiary has submitted an
application to the authority responsible for administering the
scheme, and the authority confirms in writing that, subject to
the final outcome of a detailed verification, the project in
principle meets the eligibility criteria laid down by GD 1165.
If work begins before the fulfilment of such conditions, the
whole project shall not be eligible for aid. The undertakings
benefiting from aid must report the financial data concerning
the effects of the aid to the Ministry of Economy and Finance
on an annual basis, for five years after finalising the
investment. The duration of the aid scheme is five years, from
2007 to 2013, with the possibility of extension. GD 1165
estimates that around 110 undertakings will benefit from this
scheme, with an average of 22 undertakings per year.
State aid measures can be effective tools for achieving
objectives of common interest and for correcting market
failures. By enacting GD 1165, Romania has underlined its
determination to become a competitive and attractive
environment for investors, and to ensure the sustainable
development of the national economy.