Promoting Enterprise in the EU
As an entrepreneur or business decision maker, you know how important investment is to drive forward an enterprise or new venture. At the same time, there may be a reluctance to commit funds to new projects or ideas, particularly in times of higher uncertainty. Are you aware of the funding programs that are available to your business to stimulate investment and thus propel future growth?
The European Union has an objective to encourage businesses to invest in member states to increase employment and productivity. Several funding programs have been launched to promote investment in different areas. Malta, an EU member state, also offers its own national funding schemes to attract business investment to the country.
Funding Program – Not for New Projects Only
While many business owners and executives imagine that one needs to have a striking new project to qualify for funding, the truth is that funding may also be available for something as mundane as a business plan, or expansion to larger offices.
All funding programs vary and have their distinct:
- Areas funded
- Maximum funding (capping of aid)
- Aid intensity (percentage of costs that the scheme will cover)
- Project timelines & deadlines required
- Type of aid (e.g. advance cash grant, reimbursable cash grant, tax credit, loan)
- Eligible costs (i.e. specific items that the scheme will cover)
- Eligibility criteria & conditions
- Type of state aid
Eligibility – For Funding Program
The starting point is to compare your project against the factors above. Some programs will certainly be more compatible, for instance if the project’s total value is comparable to the scheme maximum funding cap, or if your project fits within one of the areas or industries explicitly promoted by the program. All schemes will have their own specific benefits and drawbacks, for example one program may have a lower maximum funding cap, but would fund a higher percentage of the expenses, or may offer a cash grant in advance rather than after the costs have been paid. Some programs also require the applicant to have a minimum period of establishment, such as the company being incorporated for more than three years.
It may be possible to apply for more than one scheme for the same project, although – not surprisingly – you cannot receive funding for the same item more than once. Therefore, we encourage our clients to apply for more than one scheme if these complement one other so as to cover different expenses or investments.
The state aid route selected is also an important consideration. The de minimis state aid rules permit funding up to a maximum of € 200,000 in every 3-year period. The more recent General Block Exemption Regulation (GBER) mechanism was introduced primarily to support innovative, environmentally sustainable and small-to-medium-sized businesses. The GBER has no absolute funding cap, but typically funds a lower percentage of the total project cost. The funding amount or percentage varies depending upon the size of the enterprise – the smaller the company, the greater the fund allocation tends to be.
Why Timing Is Important?
The timing of the application for funding is extremely important. Some of our clients have left the funding process until too late in the day and have actually missed out on funding opportunities. Some programs operate as open rolling calls, which means that you can apply at any time during the duration of the scheme. Other schemes are more restrictive, with calls issued periodically – usually annually or bi-annually. These have a stipulated deadline by which applications can be received, following which the call closes. Thus, you can only apply during one such open call and you must plan in advance to ensure you complete your application within the time window.
If you are interested and wish to apply for one or more funding schemes, or simply wish to know more about them, please get in touch with us!
Contact Steve Muscat Azzopardi, the author of this post here: email@example.com