Entrepreneurship of Micro and Small Businesses – Development Law 4399/2016 – 2nd Proclamation

Entrepreneurship of Micro and Small Businesses - Development Law 4399/2016 - The program

The objective of the scheme is to provide a complete framework of incentives with the main objective of creating business initiatives in Micro and Small Enterprises that intend to make an initial investment in one of the eligible branches of the law.

Content of investment plan – Nature of initial investment

• Create a new unit
• Capacity expansion of an existing unit
• Diversification of a unit's output into products or services that have never been produced in it
• Fundamental change of the entire production process
• Acquisition of assets of a unit that has ceased operations

Beneficiaries

Beneficiaries of the aid of this aid scheme are the newly established or under establishment very small and small enterprises, within the meaning of article 2 of Annex I of the G.A.K.

Very Small and Small Enterprises, which are controlled by shareholders of enterprises that ceased operations during the previous twelve months, are not eligible for this regime, as long as they operate in the same or neighboring markets,

The following are also not considered beneficiaries and excluded from the aid of this scheme:

• problematic companies, as defined in paragraph 18 of article 2 G.A.K. (article 1 par. 4 case c' G.A.K.),
• companies that during the two (2) years prior to the submission of the application for aid have relocated to the business establishment in which the initial investment will be made and for which the aid is requested or do not commit that they will not do so within a period of two (2) years after the completion of the initial investment for which the aid is requested,
• companies that implement investment projects carried out on the initiative and on behalf of the State, based on a relevant project execution, concession or service provision contract.

Eligible business forms

Eligible are companies that are established or have a branch in Greek territory at the time of commencement of the investment project and have one of the following forms:

• sole proprietorship,
• commercial company,
• partnership,
• Social Cooperative Enterprises (Coun.S.Ep.) of N. 4430/2016 (A 2015)), Agricultural Cooperatives (AS), Producer Groups (OP), Agricultural Partnerships (AES) of N. 4384/2016 (A' 78) ,
• companies under establishment or under merger, with the obligation to have completed the publicity procedures before starting work on the investment plan,
• businesses that operate in the form of a joint venture, provided they are registered with GEMI,
• public and municipal enterprises and their subsidiaries, provided that:

1. they have not been assigned to serve a public purpose,
2. they have not been assigned by the state exclusively to offer services,
3. their operation is not subsidized with public funds for the period of compliance long-term obligations of article 21.

Investment projects of all sectors of the economy are covered, subject to the paragraphs of article 7 of the announcement

Program budget

The total budget of the present regime "Entrepreneurship of Very Small and Small Enterprises" amounts to 150,000,000 euros, of which 140,000,000 euros concerning the types of support for the grant, the leasing subsidy and the subsidy for the cost of the employment created come from the Public Investment Budget and the 10,000,000 euros refer to the type of tax exemption support.

The body's participation in the total eligible costs of the investment project can be done either through own funds or through external financing, provided that twenty-five percent (25%) of it does not contain any state aid, public support or provision (Article 14 par. 14 G.A.K.).

The same participation may also consist of external funding. The alternative ways of covering equity are:

• Increase in share or company capital from new cash contributions
• Capitalization of existing taxable reserves and retained earnings
• Use of existing taxable reserves and retained earnings
• Asset disposal
• Bank loan

Amount of subsidy

The minimum eligible amount of an investment project for the inclusion of investment projects in this aid scheme is defined based on the size of the organization, namely:

• for small businesses, in the amount of one hundred and fifty thousand (150,000) euros,
• for very small businesses, in the amount of one hundred thousand (100,000) euros,
• for the Social Cooperative Enterprises (Coun.S.Ep.) of N. 4430/2016(A'205), as well as Agricultural Cooperatives (AS), Producer Groups (PO) and Agricultural Corporate Partnerships (AES) of N 4384/2016 (A' 78) in the amount of fifty thousand (50,000) euros.

In the context of this announcement of the "Entrepreneurship of Very Small and Small Businesses" regime, subsidies of up to 55% are provided, based on the Regional Support Map, depending on the installation area.

Types of aid :

• Tax exemption
• Subsidy
• Lease subsidy
• Subsidy of costs of employment created

Restrictions

• The total amount of aid per submitted investment project can reach up to 5,000,000 euros

• The aid provided to each body, which also includes the aid to cooperating or affiliated companies, cannot cumulatively exceed 10 million euros for an individual company and 20 million euros for all affiliated and cooperating companies, subject to the restrictions of article 4 G.A.K.

These restrictions apply to the investment plans subject to the provisions herein and for a period of three (3) years from the institution's application for inclusion of its investment plan.

Special categories of aid (Article 12)

In order for a business to receive a higher percentage of aid through a grant, it should be categorized in at least one of the following cases:

1. Outgoing SMEs: Refers to businesses that show at least a 10% increase in extroversion on average over the last three years, either 5% if their exports account for more than 70% of their turnover in the third year, or no increase if exports account for more than 85% of turnover in the 3rd year prior to the submission of their plan

2. Innovative SMEs: with a minimum of 10% of the total operating costs taken up by research and development costs, for at least one (1) year out of the last three (3) before submitting the application for inclusion in the provisions herein.

3. Independent SMEs that after the entry into force of the law (22-6-2016) proceeded with a merger process, either by absorption or by creating a new company – excluding acquisition

4. Employment growth of at least 10% over the last three years

5. Cooperatives, Social Cooperative Enterprises (Coun.S.Ep) of Law 4019/2011, Agricultural Cooperatives (AS), Producer Groups (OP), Agricultural Partnerships (AES) of Law 4384/2016.

6. Investment projects implemented in ICT (Technology, Information Technology, Communication) and Agri-Food sectors

7. Businesses that achieve increased added value compared to the average of their sector as determined by ELSTAT

8. Businesses implementing their investment plan in B.E.P.E., E.P., E.P.E.V.O., T.Y.K.T. and they do not concern the modernization or expansion of existing structures of the aided enterprise.

9. Businesses that implement an investment plan in special areas as defined in the relevant annex of the law (mountainous, disadvantaged, with particularly high refugee and immigrant flows, with population decline, island, border areas).

Subsidized expenses

Tangible assets

Construction, expansion, modernization of building facilities and special and auxiliary building facilities and the shaping of the surrounding area.

Cumulatively they cannot exceed 45% of the total eligible costs.

For investment projects in the tourism sector, the coefficient is set at 60% for building costs, while for investments in the Logistics sector at 70% also for the building costs of said investment projects. Finally, for buildings that are classified as preserved, the factor in question amounts to 80%.

• Purchase of all existing fixed assets, for SMEs, subject to conditions.
• Purchase and installation of new modern machinery and other equipment, technical installations and means of internal transport
• Leases for financial leasing of new modern machinery and other equipment
• Special & mechanical facilities

Important dates

Submissions open: Thursday 21 May 2020

Deadline for submissions: Friday 31 July 2020

Useful files

21/05/2020

Second (2nd) Announcement of aid regime "Entrepreneurship of Very Small and Small Businesses" of the development law 4399/2016