Romania granted state aid of 1.3 billion euros over 2019-2023

The total value of state aid approved in Romania reached, over 2019-2023, 1.3 billion euros, while over 62% of state aid projects were granted to foreign companies, according to a study made by EY Romania.   According to the study, state aid programs of the last 5 years had a significant impact on regional development and creating new jobs, offering grants. Those grants facilitated the construction of new factories, expanding production capacities and hiring personnel, thus contributing to Romania's economic growth.   The key legislation measures include financing for active investments (G.O. 807/2014) and the financing plan for salary costs of projects that create at least 100 new jobs (G.O.332/2014). 138 projects of 2.9 billion euros with a state aid of one billion euros were approved as part of the plan for active stock investments, an EY press release mentions.   “By supporting key sectors, such as automobile industry, medical technology and industry, have significantly contributed to regional development and creating thousands of jobs. We notice the high appetite of foreign companies and a higher potential for local investments. The expansion of financing plans for new fields, such as digitization, automation and decarbonization, reflect Romania's engagement to promote a sustainable and innovating economic growth,” said Sebastian Popescu, a coordinator of the service line Consulting in the field of grants and incentives, EY Romania.   At the end of 2023, about 50% of financing requested was approved as part of state aid plans, financing 168 investment projects, with a total value of about 3.5 billion euros, anticipating the setting up of over 24,000 new jobs. Areas like Prahova, Sibiu and Arges became key areas for development, with major investments both in available production units, as well as other projects.   The automobile industry received one of the biggest state aid of over 300 billion euros until the end of 2023. That sector created over 4,800 jobs, consolidating Romania's stand in the European automobile market. The technological sector also received 25% of aid in 2023, a significant progress against 13% in 2020, reflecting the importance of technology for innovation and automation.   Romania continues to attract significant foreign investments, with over 62% of the state aid approved (92 projects) going to foreign companies. Investments from countries like Germany, Italy and the Netherlands showed special interest and local investments have become more relevant in Romania's investment landscape.   Examples of foreign companies which combined fusions and purchases (M&A) with state aid to expand businesses include De'Longhi and Coca-cola. In the same way, Teraplast Group, a player in the building materials sector, turned to account grants while actively focusing M&A opportunities, in order to stimulate growth. Other notable companies such as Saint-Gobain, Knauf, Terasteel, Vrancart or Leoni show the success of aligning M&A strategies with state aid programs to consolidate development in Romania.   The Romanian Government announced new state aid plans to back durable economic growth and industry modenrization, including plans for digitization, green energy and technological innovation. An example could be the state aid plan for strategic investments which have in view investment projects in the processing industry, with a total budget of one billion euros, to be implemented over 2025-2030. The main purpose is to attract major investments exceeding 150 million euros and generating over 100 new jobs.   Another program is state aid for the decarbonization of industrial processes, meant to finance investments in the iron and steel and chemical industries based on the decarbonization of production processes. With a total budget of one billion euros, the plan will be operational over 2025-2030. Eligible projects must focus on electrification, using hydrogen from renewable sources and improving energy efficiency.   The plan for turnign to account mineral resources backs investments for exploiting metal mineral resources, with a total budget of 250 million euros and being active over 2024-2025. Eligible investments must exceed 75 million euros.   The state aid plan for small industries is meant to support investments in light industries, such as textiles, leather, footwear and chemical products. With a total budget of 740 million euros for 5 years, the plan has in view investments between 500,000 and 3 million euros, with state aid available up to 1.8 million euros. State aid funds in Romania represented an essential instrument for investors, both local and foreign, being crucial especially for investments in manufacturing industry. Over 5 billion euros of state aid are anticipated to be available for companies which implement investment projects in Romania.   EY is one of the largest world companies of professional services, with 392,995 employees in over 700 offices in 150 countries and incomes of 51.2 billion dollars in the fiscal year that ended on June 30, 2024. Their network is the most integrated at global level, and its resources are offering services to customers to benefit from opportunities in the whole world. Present in Romania since 1992, EY supplies, by means of its ver 1,000 employees from Romania and Moldova, integrated services of audit, fiscal and juridical assistance, strategy and transactions, consulting for multinational and local companies.