The recent amendments to the General Block Exemption Regulation (GBER) by the European Commission entered in to force on 23 June 2023, bringing significant changes to regional investment aid. These updates aim to streamline the aid process, provide greater flexibility, and open new opportunities for businesses seeking financial support.
The amendment comes as a response to several factors, including the changing economic environment and the significant increase in the volume of investments and the number of projects seeking regional aid. In Hungary alone, in 2022, there were 92 subsidized projects with a total investment volume of EUR 6.5 billion and the creation of 15,083 jobs. The European Commission recognizes the need to adapt regulations to the new era of economic challenges. By amending the GBER, they aim to optimize the aid process and enable member states to provide more tailored support to investments.
Redefined Single Investment Project:
One notable change is the redefinition of a single investment project. Previously, businesses had to consolidate all investments started within three years in the same county by the same company or group. However, the amendment now allows businesses to count together only those investments that are related to the same or similar activities falling under the same 4-digit NACE Rev. code. This revision offers businesses increased flexibility in accessing state aid, enabling them to pursue multiple investments within a specified timeframe. By recognizing the uniqueness of each investment, the amendment encourages diversification and supports regional development initiatives, ultimately fostering economic growth and job creation.
Increased Notification Threshold:
The amendment also introduces a general 10% increase in the notification thresholds for aid amounts. As a result, in regions with a 50% aid intensity, such as Pest County, among others, the maximum aid amount that can be granted without the prior approval of the European Commission increases from EUR 37.5 million to EUR 41.25 million (at present value). This change simplifies the administrative process, expedites subsidy allocation, and ensures more efficient access to financial support for investments.
Expansion of Regional Aid Eligibility:
In addition to the changes mentioned above, the modified GBER introduces other noteworthy changes that further enhance the regional investment aid framework, such as the inclusion of the shipbuilding sector and the synthetic fibres sector in the list of industries eligible for regional aid. These sectors, previously excluded from regional aid provisions, can now benefit from financial support to stimulate growth, innovation, and competitiveness. This inclusion ensures a level playing field for companies operating within these industries, providing them with opportunities to thrive and contribute to regional development.
The amendment also introduces a favourable provision for SMEs. It stipulates that 100% of the costs of intangible assets shall be eligible for subsidy. This change aims to enhance the ability of SMEs to succeed in competitive markets and seize growth opportunities.
In conclusion, the amended GBER introduces substantial changes to regional investment aid, driven by the growing volume of investments and projects in the challenging economic landscape. By emphasizing the significance of regional investment aid and ensuring consistency and flexibility, these amendments establish a prepared framework that enables member states to allocate state aid measures more effectively.