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Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty Text with EEA relevance

Type Regulation

Publication 2014-06-17

Last updated 2023-07-01

State In force

Department European Commission

Source EUR-Lex

articles 90

Reform history JSON API

(a) for regional investment aid: for an investment with eligible costs of EUR 110 million or more, the aid amounts per undertaking per investment projects as set out below: — in cases of maximum regional aid intensity of 10 %: EUR 8.25 million; — in cases of maximum regional aid intensity of 15 %: EUR 12.38 million; — in cases of maximum regional aid intensity of 20 %: EUR 16.5 million; — in cases of maximum regional aid intensity of 25 %: EUR 20.63 million; — in cases of maximum regional aid intensity of 30 %: EUR 24.75 million; — in cases of maximum regional aid intensity of 35 %: EUR 28.88 million; — in cases of maximum regional aid intensity of 40 %: EUR 33 million; — in cases of maximum regional aid intensity of 50 %: EUR 41.25 million; — in cases of maximum regional aid intensity of 60 %: EUR 49.5 million; — in cases of maximum regional aid intensity of 70 %: EUR 57.75 million;

(b) for regional urban development aid, EUR 22 million as laid down in Article 16(3);

(d) for aid for consultancy in favour of SMEs: EUR 2.2 million per undertaking, per project;

(e) for aid to SMEs for participation in fairs: EUR 2.2 million per undertaking, per year;

(ea) for aid to microenterprises in the form of public interventions concerning the supply of electricity, gas or heat referred to in Article 19c: EUR 200 000 per beneficiary per calendar year. For microenterprises active in the primary production of agricultural products, this limit shall be EUR 25 000 per beneficiary per calendar year, and for microenterprises active in the fishery and aquaculture sectors, EUR 30 000 per beneficiary per calendar year;

(eb) for aid to SMEs in the form of temporary public interventions concerning the supply of electricity, gas or heat produced from natural gas or electricity to mitigate the impact of price increases following Russia’s war of aggression against Ukraine referred to in Article 19d: EUR 2 million per beneficiary per calendar year. For SMEs active in the primary production of agricultural products, this limit shall be EUR 250 000 per beneficiary per calendar year, and for SMEs active in the fishery and aquaculture sectors, EUR 300 000 per beneficiary per calendar year. Aid granted to undertakings active in the processing and marketing of agricultural products shall be conditional on not being partly or entirely passed on to primary producers;

(f) for aid for undertakings participating in European Territorial Cooperation projects: for aid under Article 20, EUR 2.2 million per undertaking, per project; for aid under Article 20a, the amounts laid down in Article 20a(2) per undertaking, per project;

(g) for risk finance aid: EUR 16.5 million per eligible undertaking as laid down in Article 21(8) and Article 21a(2);

(h) for aid for start-ups: the amounts laid down per undertaking in Article 22(3), (4), (5) and (7);

(i) for aid for research and development: (i) if the project is predominantly fundamental research: EUR 55 million per undertaking, per project; that is the case where more than half of the eligible costs of the project are incurred through activities which fall within the category of fundamental research; (ii) if the project is predominantly industrial research: EUR 35 million per undertaking, per project; that is the case where more than half of the eligible costs of the project are incurred through activities which fall within the category of industrial research or within the categories of industrial research and fundamental research taken together; (iii) if the project is predominantly experimental development: EUR 25 million per undertaking, per project; that is the case where more than half of the eligible costs of the project are incurred through activities which fall within the category of experimental development; (iv) if the project is a Eureka project, is implemented by a Joint Undertaking established on the basis of Article 185 or of Article 187 of the Treaty, or complies with the conditions set out in Article 25(6), point (d), the amounts referred to in points (i) to (iii) are doubled; (v) if the aid for research and development projects is granted in the form of repayable advances which, in the absence of an accepted methodology to calculate their gross grant equivalent, are expressed as a percentage of the eligible costs and the measure provides that in case of a successful outcome of the project, as defined on the basis of a reasonable and prudent hypothesis, the advances will be repaid with an interest rate at least equal to the discount rate applicable at the time of grant, the amounts referred to in points (i) to (iv) are increased by 50 %; (vi) aid for feasibility studies in preparation for research activities: EUR 8.25 million per study; (vii) for aid for SMEs for research and development projects awarded a Seal of Excellence quality label and implemented under Article 25a, the amount referred to in Article 25a; (viii) for aid Marie Skłodowska-Curie actions and ERC Proof of Concept actions implemented under Article 25b, the amounts referred to in Article 25b; (ix) for aid involved in co-funded research and development projects implemented under Article 25c, the amounts referred to in Article 25c; (x) for aid for Teaming actions, the amounts referred to in Article 25d; (xi) for aid involved in the co-funding of projects supported by the European Defence Fund or the European Defence Industrial Development Programme under Article 25e: EUR 80 million per undertaking, per project;

(j) for investment aid for research infrastructures: EUR 35 million per infrastructure;

(ja) for investment aid for testing and experimentation infrastructures: EUR 25 million per infrastructure;

(k) for aid for innovation clusters: EUR 10 million per cluster;

(l) Innovation aid for SMEs: EUR 10 million per undertaking, per project;

(m) for aid for process and organisational innovation: EUR 12.5 million per undertaking, per project;

(n) for training aid: EUR 3 million per training project;

(o) for aid for the recruitment of disadvantaged workers: EUR 5.5 million per undertaking, per year;

(p) for aid for the employment of workers with disabilities in the form of wage subsidies: EUR 11 million per undertaking, per year;

(q) for aid for compensating the additional costs of employing workers with disabilities: EUR 11 million per undertaking, per year;

(r) for aid for compensating the costs of assistance provided to disadvantaged workers: EUR 5.5 million per undertaking, per year;

(s) for investment aid for environmental protection, unless otherwise specified: EUR 30 million per undertaking per investment project;

(sa) for aid for dedicated infrastructure and storage referred to in Article 36(4): EUR 25 million per project;

(sb) for investment aid for recharging or refuelling infrastructure referred to in Article 36a(1) and (2): EUR 30 million per undertaking per project and, in the case of schemes, an average annual budget of EUR 300 million;

(sc) for investment aid for the combined improvements of the energy and environmental performance of buildings referred to in Articles 38a(7) and 39(2a): EUR 30 million per undertaking per project;

(sd) for aid for the facilitation of energy performance contracting referred to in Article 38b: EUR 30 million of total nominal outstanding financing per beneficiary;

(se) for investment aid for energy efficiency projects in buildings in the form of financial instruments: the amounts set out in Article 39(5);

(sf) for aid in form of reduction of environmental taxes or levies referred to in Article 44a: EUR 50 million per scheme per year;

(v) for operating aid for the promotion of electricity from renewable sources, as referred to in Article 42, and operating aid for the promotion of energy from renewable sources and renewable hydrogen in small projects and renewable energy communities, as referred to in Article 43: EUR 30 million per undertaking per project; the sum of the budgets of all the schemes falling under Article 42 and the sum of the budgets of all the schemes falling under Article 43 should respectively not exceed EUR 300 million per year;

(w) for aid for district heating and/or cooling systems, as referred to in Article 46: EUR 50 million per undertaking per project;

(x) for aid for energy infrastructure, as referred to in Article 48: EUR 70 million per undertaking per project;

(y) for aid for the deployment of fixed broadband networks awarded in the form of a grant: EUR 100 million total costs per project; for aid for fixed broadband networks awarded in the form of a financial instrument the nominal amount of total financing provided to any final beneficiary per project must not exceed EUR 150 million;

(ya) for aid for the deployment of 4G or 5G mobile networks awarded in the form of a grant: EUR 100 million total costs per project; for aid for 4G or 5G mobile networks awarded in the form of a financial instrument the nominal amount of total financing provided to any final beneficiary per project must not exceed EUR 150 million;

(yb) for aid for certain projects of common interest in the area of trans-European digital connectivity infrastructures financed under Regulation (EU) 2021/1153 or awarded a Seal of Excellence quality label under that Regulation awarded in the form of a grant: EUR 100 million total costs per project; for aid for certain projects of common interest in the area of trans-European digital connectivity infrastructures awarded in the form of a financial instrument the nominal amount of total financing provided to any final beneficiary per project must not exceed EUR 150 million;

(yc) for aid in the form of connectivity vouchers schemes: the total State aid budget over 24 months for all connectivity voucher schemes in a Member State must not exceed EUR 50 million (total amount including national and regional or local voucher schemes);

(yd) for aid for the deployment of backhaul networks awarded in the form of a grant: EUR 100 million total costs per project; for aid for the deployment of backhaul networks awarded in the form of a financial instrument the nominal amount of total financing provided to any final beneficiary per project must not exceed EUR 150 million;

(z) for investment aid for culture and heritage conservation: EUR 165 million per project; operating aid for culture and heritage conservation: EUR 82.5 million per undertaking per year;

(aa) for aid schemes for audiovisual works: EUR 55 million per scheme per year;

(bb) for investment aid for sport and multifunctional recreational infrastructures: EUR 33 million or the total costs exceeding EUR 110 million per project; operating aid for sport infrastructure: EUR 2.2 million per infrastructure per year;

(cc) for investment aid for local infrastructures: EUR 11 million or the total costs exceeding EUR 22 million for the same infrastructure;

(dd) for aid for regional airports: the aid intensities and aid amounts laid down in Article 56a;

(ee) for aid for maritime ports: eligible costs of EUR 143 million per project (or EUR 165 million per project in a maritime port included in the work plan of a Core Network Corridor as referred to in Article 47 of Regulation (EU) No 1315/2013 of the European Parliament and of the Council (⁴⁶)); as regards dredging a project is defined as all dredging carried out within 1 calendar year;

(ff) for aid for inland ports: eligible costs of EUR 44 million per project (or EUR 55 million per project in an inland port included in the work plan of a Core Network Corridor as referred to in Article 47 of Regulation (EU) No 1315/2013); as regards dredging a project is defined as all dredging carried out within 1 calendar year;

(gg) for aid involved in financial products supported by the InvestEU Fund: the amounts laid down in Section 16 of Chapter III; and

(hh) for aid to SMEs for costs incurred by participating in community-led local development (‘CLLD’) projects: for aid under Article 19a, EUR 2 million per undertaking, per project; for aid under Article 19b, the amounts laid down in Article 19b(2) per project.

Article 5

Transparency of aid

The following categories of aid shall be considered to be transparent:

(a) aid comprised in grants and interest rate subsidies;

(b) aid comprised in loans, where the gross grant equivalent has been calculated on the basis of the reference rate prevailing at the time of the grant;

(c) aid comprised in guarantees: (i) where the gross grant equivalent has been calculated on the basis of safe-harbour premiums laid down in a Commission notice; or (ii) where before the implementation of the measure, the methodology to calculate the gross grant equivalent of the guarantee has been accepted on the basis of the Commission Notice on the application of Articles 87 and 88 of the EC Treaty to State aid in the form of guarantees (⁴⁷), or any successor notice, following notification of that methodology to the Commission under any regulation adopted by the Commission in the State aid area applicable at the time, and the approved methodology explicitly addresses the type of guarantee and the type of underlying transaction at stake in the context of the application of this Regulation;

(d) aid in the form of tax advantages, where the measure provides for a cap ensuring that the applicable threshold is not exceeded;

(e) aid for regional urban development if the conditions laid down in Article 16 are fulfilled;

(ea) aid to undertakings for their participation in European Territorial Cooperation projects under Article 20a, where it provides for a cap ensuring that the applicable threshold laid down in Article 20a is not exceeded;

(f) aid comprised in risk finance measures if the conditions laid down in Articles 21 and 21a are fulfilled;

(g) aid for start-ups if the conditions laid down in Article 22 are fulfilled;

(ga) aid for SMEs in the form of reduced access fees or free access to innovation advisory services and innovation support services, as defined in Article 2, points (94) and (95) respectively, offered for example by research and knowledge dissemination organisations, research infrastructures, testing and experimentation infrastructures or innovation clusters based on an aid scheme provided that the following conditions are met: (i) the advantage consisting in reduced fees or free access acquired is quantifiable and demonstrable; (ii) the full or partial price discounts for services and the rules in accordance with which SMEs may apply for and be selected and granted discounts are made publicly available (through web sites or other suitable means) before the service provider starts offering the discounts; (iii) the service provider shall keep records of the amounts of aid granted to each SME in the form of price discounts to make sure that the ceilings set out in Article 28(3) and (4) are complied with. Such records shall be kept for 10 years from the date on which the last aid was granted by the service provider;

(h) aid for energy efficiency projects if the conditions laid down in Article 39 are fulfilled;

(i) aid in the form of premiums in addition to the market price if the conditions laid down in Article 42 are fulfilled;

(j) aid in the form of repayable advances, if the total nominal amount of the repayable advance does not exceed the thresholds applicable under this Regulation or if, before implementation of the measure, the methodology to calculate the gross grant equivalent of the repayable advance has been accepted following its notification to the Commission;

(k) aid in the form of the sale or the lease of tangible assets below market rates where the value is established either by an independent expert evaluation prior to the transaction or by reference to a publicly available, regularly updated and generally accepted benchmark;

(l) aid involved in financial products supported by the InvestEU Fund, if the conditions laid down in Chapter III, Section 16, are fulfilled;

(m) aid to microenterprises in the form of public interventions concerning the supply of electricity, gas or heat, if the conditions set out in Articles 19c are fulfilled;

(n) aid to SMEs in the form of temporary public interventions concerning the supply of electricity, gas or heat produced from natural gas or electricity to mitigate the impact of price increases following Russia’s war of aggression against Ukraine, if the conditions set out in Article 19d are fulfilled.

Article 6

Incentive effect

Aid shall be considered to have an incentive effect if the beneficiary has submitted a written application for the aid to the Member State concerned before work on the project or activity starts. The application for the aid shall contain at least the following information:

(a) undertaking's name and size;

(b) description of the project, including its start and end dates;

(d) list of project costs;

(e) type of aid (grant, loan, guarantee, repayable advance, equity injection or other) and amount of public funding needed for the project;

Ad hoc aid granted to large enterprises shall be considered to have an incentive effect if, in addition to ensuring that the condition laid down in paragraph 2 is fulfilled, the Member State has verified, before granting the aid concerned, that documentation prepared by the beneficiary establishes that the aid will result in one or more of the following:

(a) in the case of regional investment aid: that a project is carried out, which would not have been carried out in the area concerned or would not have been sufficiently profitable for the beneficiary in the area concerned in the absence of the aid.

(b) in all other cases, that there is: — a material increase in the scope of the project/activity due to the aid, or — a material increase in the total amount spent by the beneficiary on the project/activity due to the aid, or — a material increase in the speed of completion of the project/activity concerned;

By way of derogation from paragraphs 2 and 3, measures in the form of tax advantages shall be deemed to have an incentive effect if the following conditions are fulfilled:

(a) the measure establishes a right to aid in accordance with objective criteria and without further exercise of discretion by the Member State; and

(b) the measure has been adopted and is in force before work on the aided project or activity has started, except in the case of fiscal successor schemes, where the activity was already covered by the previous schemes in the form of tax advantages.

By way of derogation from paragraphs 2, 3 and 4, the following categories of aid are not required to have or shall be deemed to have an incentive effect:

(a) regional operating aid and regional urban development aid, where the relevant conditions laid down in Articles 15 and 16 are fulfilled;

(b) aid for access to finance for SMEs, if the relevant conditions laid down in Articles 21, 21a and 22 are fulfilled;

(c) aid for the recruitment of disadvantaged workers in the form of wage subsidies and aid for the employment of workers with disabilities in the form of wage subsidies, if the relevant conditions laid down in Articles 32 and 33 respectively are fulfilled;

(d) aid compensating for the additional costs of employing workers with disabilities and aid for compensating the costs of assistance provided to disadvantaged workers, where the relevant conditions laid down in Articles 34 and 35 are fulfilled;

(e) aid in the form of reductions in environmental taxes under Directive 2003/96/EC, if the conditions laid down in Article 44 of this Regulation are fulfilled;

(f) aid to make good the damage caused by certain natural disasters, if the conditions laid down in Article 50 are fulfilled;

(g) social aid for transport for residents of remote regions, if the conditions laid down in Article 51 are fulfilled;

(h) aid for culture and heritage conservation, if the conditions laid down in Article 53 are fulfilled;

(i) aid for undertakings participating in European Territorial Cooperation projects, if the relevant conditions in Article 20 or Article 20a are fulfilled;

(j) aid for research and development projects awarded a Seal of Excellence quality label, Marie Skłodowska-Curie actions and ERC Proof of Concept actions awarded a Seal of Excellence quality label, aid involved in co-funded projects and in co-funded Teaming actions, if the relevant conditions laid down in Article 25a, Article 25b, Article 25c or Article 25d are fulfilled;

(k) aid involved in financial products supported by the InvestEU Fund, if the conditions laid down in Section 16 of Chapter III are fulfilled;

(l) aid for SMEs participating in or benefitting from community-led local development (‘CLLD’) projects, if the relevant conditions in Article 19a or 19b are fulfilled;

(m) aid for the remediation of environmental damage and the rehabilitation of natural habitats and ecosystems where the remediation or rehabilitation costs exceed the increase in value of the land or property and the conditions laid down in Article 45 are fulfilled;

(n) aid for the protection of biodiversity and the implementation of nature-based solutions for climate change adaptation and mitigation where the conditions laid down in Article 45 are fulfilled;

(o) aid for the promotion of energy from renewable energy sources under Article 41, 42 and 43 when the aid is granted automatically in accordance with objective and non-discriminatory criteria and without further exercise of discretion by the Member State and the measure has been adopted and is in force before work on the aided project or activity has started;

(p) aid to microenterprises in the form of public interventions concerning the supply of electricity, gas or heat, subject to the conditions set out in Article 19c;

(q) aid to SMEs in the form of temporary public interventions concerning the supply of electricity, gas or heat produced from natural gas or electricity to mitigate the impact of price increases following Russia’s war of aggression against Ukraine, subject to the conditions set out in Article 19d.

Article 7

Aid intensity and eligible costs

Article 8

Cumulation

Aid with identifiable eligible costs exempted by this Regulation may be cumulated with:

(a) any other State aid, as long as those measures concern different identifiable eligible costs,

(b) any other State aid, in relation to the same eligible costs, partly or fully overlapping, only if such cumulation does not result in exceeding the highest aid intensity or aid amount applicable to this aid under this Regulation. Financing provided to the final beneficiaries with support from the InvestEU Fund covered by Section 16 of Chapter III and the cost covered by this financing shall not be considered for determining compliance with the cumulation provisions laid down in the first sentence of this point. Instead, the amount relevant for determining compliance with the cumulation provisions of the first sentence of this point shall be calculated as follows. First, the nominal amount of the financing supported by the InvestEU Fund shall be deducted from the total eligible project costs, obtaining the total remaining eligible costs; second, the maximum aid shall be calculated by applying the relevant highest aid intensity or aid amount only to the total remaining eligible costs. In cases of Articles for which the notification threshold is expressed as a maximum aid amount, the nominal amount of financing provided to the final beneficiaries with the support from the InvestEU Fund shall also not be considered for determining whether the notification thresholds in Article 4 are respected. Alternatively, for senior loans or guarantees on senior loans supported by the InvestEU Fund under Section 16 of Chapter III, the gross grant equivalent of the aid entailed in such loans or guarantees provided to the final beneficiaries may be calculated in accordance with Article 5(2), point (b) or (c), as appropriate. This gross grant equivalent of the aid can be used for ensuring, in line with the first sentence of this point, that cumulation with any other aid for the same identifiable eligible costs does not result in exceeding the highest aid intensity or aid amount applicable to the aid under this Regulation or the relevant notification threshold under this Regulation.

Article 9

Publication and information

The Member State concerned shall ensure the publication, in the Commission’s transparency award module (⁴⁹) or on a comprehensive State aid website, at national or regional level, of:

(a) the summary information referred to in Article 11 in the standardised format laid down in Annex II or a link providing access to it;

(b) the full text of each aid measure, as referred to in Article 11 or a link providing access to the full text;

(c) the information referred to in Annex III on each individual aid award exceeding EUR 100 000 , or for aid involved in financial products supported by the InvestEU fund under Section 16 on each individual aid award exceeding EUR 500 000 , or for beneficiaries active in primary agricultural production or in the fishery and aquaculture sector, other than those to which Section 2a applies, on each individual aid award exceeding EUR 10 000 .

As regards aid granted to European Territorial Cooperation projects as referred to in Article 20, the information referred to in this paragraph shall be placed on the website of the Member State in which the managing authority concerned, as defined in Article 21 of Regulation (EU) No 1299/2013 of the European Parliament and of the Council (⁵⁰), or Article 45 of Regulation (EU) 2021/1059 of the European Parliament and of the Council (⁵¹), whichever is applicable, is located. Alternatively, the participating Member States may decide that each of them shall provide the information relating to the aid measures within their territory on the respective websites.

The publication obligations laid down in the first subparagraph shall not apply to aid granted to European Territorial Cooperation projects referred to in Article 20a, as well as community-led local development (‘CLLD’) projects under Article 19b.

For schemes in the form of tax advantages, and for schemes covered by Articles 16, 21a and 22 (⁵²) the conditions set out in paragraph 1, first subparagraph, point (c), of this Article shall be considered fulfilled if Member States publish the required information on individual aid amounts in the following ranges (in EUR million):

The Commission shall publish on its website:

(a) the links to the State aid websites referred to in paragraph 1 of this Article;

(b) the summary information referred to in Article 11.

CHAPTER II

MONITORING

Article 10

Withdrawal of the benefit of the block exemption

Where a Member State grants aid allegedly exempted from the notification requirement under this Regulation without fulfilling the conditions set out in Chapters I to III, the Commission may, after having provided the Member State concerned with the possibility to make its views known, adopt a decision stating that all or some of the future aid measures adopted by the Member State concerned which would otherwise fulfil the requirements of this Regulation, are to be notified to the Commission in accordance with Article 108(3) of the Treaty. The measures to be notified may be limited to the measures granting certain types of aid or in favour of certain beneficiaries or aid measures adopted by certain authorities of the Member State concerned.

Article 11

Reporting

Member States, or in the case of aid granted to European Territorial Cooperation projects under Article 20, alternatively the Member State in which the Managing Authority, as defined in Article 21 of Regulation (EU) No 1299/2013, or Article 45 of Regulation (EU) 2021/1059, whichever is applicable, is located, shall transmit to the Commission:

(a) via the Commission’s electronic notification system, the summary information about each aid measure exempted under this Regulation in the standardised format laid down in Annex II, together with a link providing access to the full text of the aid measure, including its amendments, within 20 working days following its entry into force; and

(b) an annual report, as referred to in Commission Regulation (EC) No 794/2004 (⁵³) in electronic form, on the application of this Regulation, containing the information indicated in that Regulation, in respect of each whole year or each part of the year during which this Regulation applies. For financial products implemented by a Member State under the InvestEU Member State compartment or by a national promotional bank acting as an implementing partner or acting as a financial intermediary under InvestEU, this obligation of the Member State is deemed to be fulfilled if the implementing partner provides the annual reports to the Commission, in accordance with the relevant reporting requirements laid down in the guarantee agreement signed between the Commission and the implementing partner.

The first subparagraph shall not apply in respect of aid granted to European Territorial Cooperation projects referred to in Article 20a, as well as to community-led local development (‘CLLD’) projects as referred to in Article 19b.

Article 12

Monitoring

The first subparagraph shall not apply in respect of aid granted to European Territorial Cooperation projects referred to in Article 20a, as well as to European Innovation Partnership for agricultural productivity and sustainability Operational Group projects and to community-led local development (‘CLLD’) projects as referred to Article 19b.

CHAPTER III

SPECIFIC PROVISIONS FOR DIFFERENT CATEGORIES OF AID

SECTION 1

Regional aid

Subsection A

Regional investment and operating aid

Article 13

Scope of regional aid

This Section shall not apply to:

(a) aid in the steel sector, the lignite sector and the coal sector;

(b) aid to the transport sector as well as the related infrastructure; aid for energy generation, storage, transmission, distribution and infrastructure, except for regional investment aid in outermost regions and regional operating aid schemes; and aid in the broadband sector except for regional operating aid schemes;

(c) regional aid in the form of schemes which are targeted at a limited number of specific sectors of economic activity; schemes aimed at tourism activities or processing and marketing of agricultural products are not considered to be targeted at specific sectors of economic activity;

(d) regional operating aid granted to undertakings whose principal activities fall under Section K ‘Financial and insurance activities’ of the NACE Rev. 2 or to undertakings that perform intra-group activities whose principal activities fall under classes 70.10 ‘Activities of head offices’ or 70.22 ‘Business and other management consultancy activities’ of NACE Rev. 2.

Article 14

Regional investment aid

The eligible costs shall be one or several of the following:

(a) investment costs in tangible and intangible assets; or

(b) the estimated wage costs of employment created as a result of an initial investment, calculated over 2 years; or

(c) a combination of part of the costs referred to in points (a) and (b) but not exceeding the amount of point (a) or (b), whichever is higher.

The assets acquired shall be new except for SMEs and for the acquisition of an establishment.

Costs related to the lease of tangible assets may be taken into account under the following conditions:

(a) for land and buildings, the lease must continue for at least 5 years after the expected date of completion of the investment for large enterprises, and 3 years for SMEs;

(b) for plant or machinery, the lease must take the form of financial leasing and must contain an obligation for the aid beneficiary to purchase the asset at the expiry of the term of the lease.

In the case of an initial investment as referred to in Article 2, point 49(b) or point 51(b), in principle only the costs of buying the assets from third parties unrelated to the buyer shall be taken into consideration. However, if a member of the family of the original owner, or one or more employees, takes over a small enterprise, the condition that the assets shall be bought from third parties unrelated to the buyer does not apply. The transaction shall take place under market conditions. If the acquisition of the assets of an establishment is accompanied by an additional investment eligible for regional aid, the eligible costs of that additional investment should be added to the cost of acquisition of the assets of the establishment. If aid has already been granted for the acquisition of assets prior to their purchase, the costs of those assets shall be deducted from the eligible costs related to the acquisition of an establishment.

Intangible assets are eligible for the calculation of investment costs if they fulfil the following conditions:

(a) they must be used exclusively in the establishment receiving the aid;

(b) they must be amortisable;

(d) they must be included in the assets of the undertaking that receives the aid and must remain associated with the project for which the aid is awarded for at least 5 years (3 years for SMEs).

For large enterprises, costs of intangible assets shall be eligible only up to 50 % of the total eligible investment costs for the initial investment. For SMEs, 100 % of the costs of intangible assets shall be eligible.

Where eligible costs are calculated by reference to the estimated wage costs as referred to in paragraph 4(b), the following conditions shall be fulfilled:

(a) the investment project shall lead to a net increase in the number of employees in the establishment concerned compared to the average over the previous 12 months, after deducting from the number of jobs created any job losses that occurred during that period, expressed in annual labour units;

(b) each post shall be filled within 3 years of completion of the investment;

(c) each job created through the investment shall be maintained in the area concerned for a period of at least five years from the date the post was first filled, or three years in the case of SMEs, except if the job is lost between 1 January 2020 and 30 June 2021.

Article 15

Regional operating aid

In sparsely populated areas, the regional operating aid schemes shall compensate for the additional transport costs of goods which have been produced in areas eligible for operating aid, as well as additional transport costs of goods that are further processed in those areas, under the following conditions:

(a) the aid is objectively quantifiable in advance on the basis of a fixed sum or per tonne/kilometre ratio or any other relevant unit;

(b) the additional transport costs are calculated on the basis of the journey of the goods inside the national border of the Member State concerned using the means of transport which results in the lowest costs for the beneficiary. The Member State may impose environmental standards to be fulfilled by the mode of transport chosen, and if such standards are imposed on the beneficiary it may base the calculation of the additional transport costs on the lowest cost for fulfilling those environmental standards.

The aid intensity shall not exceed 100 % of the additional transport costs as set out in this paragraph.

In sparsely and very sparsely populated areas, the regional operating aid schemes shall prevent or reduce depopulation under the following conditions:

(a) the beneficiaries have their economic activity in the area concerned;

(b) the annual aid amount per beneficiary under all operating aid schemes does not exceed 20 % of the annual labour costs incurred by the beneficiary in the area concerned.

In outermost regions, the operating aid schemes shall compensate for the additional operating costs incurred in those regions as a direct result of one or several of the permanent handicaps referred to in Article 349 of the Treaty, where the beneficiaries have their economic activity in an outermost region provided that the annual aid amount per beneficiary under all operating aid schemes implemented under this Regulation does not exceed one of the following percentages:

(a) 35 % of the gross value added annually created by the beneficiary in the outermost region concerned;

(b) 40 % of the annual labour costs incurred by the beneficiary in the outermost region concerned;

Subsection B

Urban development aid

Article 16

Regional urban development aid

Urban development projects shall fulfil the following criteria:

(a) they are implemented via urban development funds in assisted areas;

(b) they are co-financed by the European Structural and Investment Funds;

The urban development measures shall fulfil the following conditions:

(a) urban development fund managers shall be selected through an open, transparent and non-discriminatory call in accordance with the applicable Union and national laws. In particular, there shall be no discrimination between urban development fund managers on the basis of their place of establishment or incorporation in any Member State. Urban development fund managers may be required to fulfil predefined criteria objectively justified by the nature of the investments;

(b) the independent private investors shall be selected through an open, transparent and non-discriminatory call in accordance with applicable Union and national laws aimed at establishing the appropriate risk-reward sharing arrangements whereby, for investments other than guarantees, asymmetric profit-sharing shall be given preference over downside protection. If the private investors are not selected by such a call, the fair rate of return to the private investors shall be established by an independent expert selected via an open, transparent and non-discriminatory call;

(c) in the case of asymmetric loss-sharing between public and private investors, the first loss assumed by the public investor shall be capped at 25 % of the total investment;

(d) in the case of guarantees to private investors in urban development projects, the guarantee rate shall be limited to 80 % and total losses assumed by a Member State shall be capped at 25 % of the underlying guaranteed portfolio;

(e) the investors shall be allowed to be represented in the governance bodies of the urban development fund, such as the supervisory board or the advisory committee;

(f) the urban development fund shall be established according to the applicable laws. The Member State shall provide for a due diligence process in order to ensure a commercially sound investment strategy for the purpose of implementing the urban development aid measure.

Urban development funds shall be managed on a commercial basis and shall ensure profit-driven financing decisions. This is considered to be the case when the managers of the urban development fund fulfill the following conditions:

(a) the managers of urban development funds shall be obliged by law or contract to act with the diligence of a professional manager in good faith and avoiding conflicts of interest; best practices and regulatory supervision shall apply;

(b) the remuneration of the managers of urban development funds shall conform to market practices. This requirement is considered to be met where a manager is selected through an open, transparent and non-discriminatory call, based on objective criteria linked to experience, expertise and operational and financial capacity;

(c) the managers of urban development funds shall receive a remuneration linked to performance, or shall share part of the investment risks by co-investing own resources so as to ensure that their interests are permanently aligned with the interests of the public investors;

(d) the managers of urban development funds shall set out an investment strategy, criteria and the proposed timing of investments in urban development projects, establishing the ex ante financial viability and their expected impact on urban development;

(e) a clear and realistic exit strategy shall exist for each equity and quasi-equity investment.

Where an urban development fund provides loans or guarantees to urban development projects, the following conditions shall be fulfilled:

(a) in the case of loans, the nominal amount of the loan is taken into account in calculating the maximum investment amount for the purposes of paragraph 3 of this Article;

(b) in the case of guarantees, the nominal amount of the underlying loan is taken into account in calculating the maximum investment amount for the purposes of paragraph 3 of this Article.

SECTION 2

Aid to SMEs

Article 17

Investment aid to SMEs

The eligible costs shall be one or several of the following:

(a) the costs of investment in tangible and intangible assets, including one-off non-amortizable costs linked directly to the investment and its initial installation;

(b) the estimated wage costs of employment directly created by the investment project, calculated over 2 years;

(c) a combination of part of the costs referred to in points (a) and (b) but not exceeding the amount of point (a) or (b), whichever is higher.

In order to be considered an eligible cost for the purposes of this Article, an investment shall consist of the following:

(a) an investment in tangible and intangible assets related to the setting-up of a new establishment; the extension of an existing establishment; the diversification of the output of an establishment into products or services not previously produced in or provided from the establishment; or a fundamental change in the overall production process of the product(s) or overall provision of the service(s) concerned by the investment in the establishment; or

(b) an acquisition of assets belonging to an establishment that has closed or would have closed had it not been purchased. Sole acquisition of the shares of an undertaking does not qualify as investment. The transaction shall take place under market conditions. In principle, only the costs of buying the assets from third parties unrelated to the buyer shall be taken into consideration. However, if a member of the family of the original owner, or one or more employees, takes over a small enterprise, the condition that the assets shall be bought from third parties unrelated to the buyer does not apply.

A replacement investment thus does not constitute an investment in the meaning of this paragraph.

Costs related to the lease of tangible assets may be taken into account under the following conditions:

(a) for land and buildings, the lease must continue for at least 3 years after the expected date of completion of the investment;

(b) for plant or machinery, the lease must take the form of financial leasing and must contain an obligation for the aid beneficiary to purchase the asset at the expiry of the term of the lease.

Intangible assets shall fulfil all of the following conditions:

(a) they shall be used exclusively in the establishment receiving the aid;

(b) they shall be amortisable;

(d) they shall be included in the assets of the undertaking that receives the aid for at least 3 years.

Employment directly created by an investment project shall fulfil the following conditions:

(a) it shall be created within three years of completion of the investment;

(b) there shall be a net increase in the number of employees in the establishment concerned, compared with the average over the previous 12 months;

The aid intensity shall not exceed:

(a) 20 % of the eligible costs in the case of small enterprises;

(b) 10 % of the eligible costs in the case of medium-sized enterprises.

Article 18

Aid for consultancy in favour of SMEs

Article 19

Aid to SMEs for participation in fairs

Article 19a

Aid for costs incurred by SMEs participating in community-led local development (‘CLLD’) projects

The following costs, set out in Article 35(1) of Regulation (EU) No 1303/2013 or Article 34(1) of Regulation (EU) 2021/1060, whichever is applicable, shall be eligible for CLLD projects:

(a) the costs of preparatory support, capacity building, training and networking with a view of preparing and implementing a CLLD strategy;

(b) implementation of approved operations;

(d) running costs linked to the management of the implementation of the CLLD strategy;

(e) animation of the CLLD strategy in order to facilitate exchange between stakeholders to provide information and to promote the strategy and projects, and to support potential beneficiaries with a view of developing operations and preparing applications.

Article 19b

Limited amounts of aid to SMEs benefitting from community-led local development (‘CLLD’) projects

Article 19c

Aid to microenterprises in the form of public interventions concerning the supply of electricity, gas or heat

Aid to microenterprises in the form of of public interventions concerning the supply of electricity, gas or heat shall be compatible with the internal market within the meaning of Article 107(3) of the Treaty and shall be exempted from the notification requirement of Article 108(3) of the Treaty, provided that the conditions laid down in this Article and in Chapter I are fulfilled. This Article shall apply to:

(a) public interventions in price setting reducing the prices applied by suppliers to microenterprises per unit of electricity, gas or heat;

(b) payments made to microenterprises, be it directly or via suppliers, per unit of electricity, gas or heat consumption compensating for part of the costs of that consumption.

The measures pursuant to paragraph 1 shall:

(a) discriminate neither between suppliers nor between microenterprises;

(b) provide that all suppliers are eligible to provide offers for the supply of electricity, gas or heat to microenterprises on the same basis;

(c) provide for a mechanism that, if granted via a supplier, ensures that the aid is passed on to the largest extent possible the final beneficiary; and

(d) result in a price that is above cost, at a level where effective price competition can occur.

Article 19d

Aid to SMEs in the form of temporary public interventions concerning the supply of electricity, gas or heat produced from natural gas or electricity to mitigate the impact of price increases following Russia’s war of aggression against Ukraine

Aid to SMEs in the form of public interventions concerning the supply of electricity, gas or heat, to the extent it is produced from natural gas or electricity, shall be compatible with the internal market within the meaning of Article 107(3) of the Treaty and shall be exempted from the notification requirement of Article 108(3) of the Treaty, provided that the conditions laid down in this Article and in Chapter I are fulfilled. This Article shall apply to:

(a) public interventions in price setting reducing the prices applied by suppliers per unit of electricity, gas or heat;

(b) payments granted to SMEs, be it directly or via suppliers, per unit of electricity, gas or heat consumption compensating for part of the costs of that consumption.

The measures pursuant to paragraph 1 shall:

(a) be limited to maximum 70 % of the beneficiary's consumption of electricity, gas or heat produced from natural gas or electricity over the period covered by the aid measure;

(b) discriminate neither between suppliers nor between SMEs;

(d) provide that all suppliers are eligible to provide offers for the supply of electricity, gas or heat on the same basis;

(e) provide for a mechanism that, if granted via a supplier, ensures that the aid is passed on to the largest extent possible to the final beneficiary; and

(f) result in an average unit price of supplies at least equal to the average price per unit of electricity, gas, or heat respectively to final customers in the Member State concerned over the period from 1 January to 31 December 2021.

Payments made to suppliers for supplies provided to SMEs, as imposed by public interventions in price setting below the cost of the supplier, shall be compatible with the internal market within the meaning of Article 107(3) of the Treaty and shall be exempted from the notification requirement of Article 108(3) of the Treaty, provided that:

(a) the public intervention in price setting meets the requirements set out in paragraph 2; and

(b) the compensation payment shall not exceed the difference between the price that the supplier could have expected to achieve when applying market-based supply prices without the intervention and the price set below cost by the public intervention.

SECTION 2a

Aid for European Territorial Cooperation

Article 20

Aid for costs incurred by undertakings participating in European Territorial Cooperation project

To the extent that they are linked to the cooperation project, the following costs, which shall have the meaning ascribed to them in Commission Delegated Regulation (EU) No 481/2014 (⁵⁶), or Articles 38 to 44 of Regulation (EU) 2021/1059, whichever is applicable, shall be eligible costs:

(a) staff costs;

(b) office and administrative costs;

(d) external expertise and services costs;

(e) equipment costs;

(f) costs for infrastructure and works.

Article 20a

Limited amounts of aid to undertakings for participation in European Territorial Cooperation projects

SECTION 3

Aid for access to finance for SMEs

Article 21

Risk finance aid

Eligible undertakings shall be undertakings that are unlisted SMEs and fulfil, at the time of the initial risk finance investment, at least one of the following conditions:

(a) they have not been operating in any market;

(b) they have been operating in any market for any of the following: (i) less than 10 years following their registration; or (ii) less than 7 years after their first commercial sale. Where one of the eligibility periods referred to in points (i) and (ii) has been applied to a given undertaking, only that period can be applied also to any subsequent risk finance aid to the same undertaking. For undertakings that have acquired another undertaking or were formed through a merger, the eligibility period applied shall also encompass the operations of the acquired undertaking or the merged undertakings, respectively, except for such acquired or merged undertakings whose turnover accounts for less than 10 % of the turnover of the acquiring undertaking in the financial year preceding the acquisition or, in case of undertakings formed through a merger, less than 10 % of the combined turnover that the merging undertakings had in the financial year preceding the merger. Concerning the eligibility period referred to in point (i), if applied, for undertakings that are not subject to registration, the eligibility period shall start from either the moment when the undertaking starts its economic activity or the moment when it becomes liable to tax with regard to its economic activity, whichever is earlier;

(c) they require an initial investment which, based on a business plan prepared in view of a new economic activity, is higher than 50 % of their average annual turnover in the preceding 5 years. By way of derogation from the first sentence, that threshold shall be limited to 30 % with regard to the following investments, which shall be considered initial investments into a new economic activity: (i) investments significantly improving the environmental performance of the activity in accordance with Article 36(2); (ii) other environmentally sustainable investments as defined in Article 2(1) of Regulation (EU) 2020/852; (iii) investments aiming at increasing capacity for the extraction, separation, refining, processing or recycling of a critical raw material listed in Annex IV.

The risk finance investment may also cover follow-on investments made in eligible undertakings, including after the eligibility period referred to in paragraph 3, point (b), if the following cumulative conditions are fulfilled:

(a) the total amount of risk finance referred to in paragraph 8 is not exceeded;

(b) the possibility of follow-on investments was provided for in the original business plan;

(c) the undertaking receiving the follow-on investments has not become a ‘linked enterprise’, within the meaning of Article 3(3) of Annex I, with another undertaking other than the financial intermediary or the independent private investor providing risk finance under the measure, unless the new entity is an SME.

The total outstanding amount of risk finance investment referred to in paragraph 5 shall not exceed EUR 16.5 million per eligible undertaking under any risk finance measure. In order to calculate this maximum risk finance investment amount, the following shall be taken into account:

(a) in the case of loans and quasi-equity investments structured as debt, the nominal outstanding amount of the instrument;

(b) in the case of guarantees, the nominal outstanding amount of the underlying loan.

The public contribution provided to financial intermediaries may take one of the following forms:

(a) equity or quasi-equity, or financial endowment to provide risk finance investment directly or indirectly to eligible undertakings;

(b) loans to provide risk finance investment directly or indirectly to eligible undertakings;

Risk-reward sharing arrangements between, on the one hand, the Member State (or its entrusted entity) and, on the other hand, private investors, financial intermediaries or fund managers, shall be adequate and shall comply with the following conditions:

(a) for risk finance aid in forms other than guarantees, prioritised returns from profits (asymmetric profit sharing or upside incentives) shall be given preference over protection against potential losses (downside protection);

(b) in the case of asymmetric loss-sharing between public and private investors, the first loss borne by the public investor shall be capped at 25 % of the risk finance investment;

(c) for risk finance aid in the form of guarantees, the guarantee rate shall be limited to 80 % and total losses assumed by a Member State shall be capped at a maximum of 25 % of the underlying guaranteed portfolio. Only guarantees covering expected losses of the underlying guaranteed portfolio may be provided for free. If a guarantee also comprises coverage of unexpected losses, the financial intermediary shall pay, for the part of the guarantee covering unexpected losses, a market-conform guarantee premium.

For risk finance measures aimed at providing risk finance investments in the form of equity, quasi-equity or loans to eligible undertakings, the public contribution provided to the financial intermediary shall leverage additional finance from independent private investors at the level of the financial intermediaries or the eligible undertakings, so as to achieve an aggregate private participation rate reaching the following minimum thresholds:

(a) 10 % of the risk finance investment provided to the eligible undertakings referred to in paragraph 3, point (a);

(b) 40 % of the risk finance investment provided to the eligible undertakings referred to in paragraph 3 point (b);

(c) 60 % of the risk finance investment provided to the eligible undertakings referred to in paragraph 3, point (c), and for follow-on risk finance investment in eligible undertakings after the eligibility period referred to in paragraph 3, point (b).

Finance provided by independent private investors benefitting from risk finance aid in the form of tax incentives in accordance with Article 21a shall not be taken into account for the purposes of reaching the aggregate private participation rates set out in the first subparagraph of this paragraph.

The private participation rates mentioned in the first subparagraph, points (b) and (c), shall be reduced to 20 % under point (b) and 30 % under point (c) for investments that are either: made in assisted areas designated in an approved regional aid map in force at the time of provision of the risk finance investment in application of Article 107(3), point (a), of the Treaty; or that receive support on the basis of the Member State’s recovery and resilience plan as approved by the Council; or receive support from the European Defence Fund in accordance with Regulation (EU) 2021/697 or under the Union Space Programme in accordance with Regulation (EU) 2021/696 of the European Parliament and of the Council (⁵⁷); or that receive support from Union funds implemented under shared management covered by Regulation (EU) 1303/2013, Regulation (EU) 2021/1060 or Regulation (EU) 2021/2115 of the European Parliament and of the Council (⁵⁸).

Financial intermediaries and fund managers shall be selected through an open, transparent and non-discriminatory procedure in accordance with applicable Union and national laws. Member States may require that eligible financial intermediaries and fund managers fulfil predefined criteria objectively justified by the nature of the investments. The procedure shall be based on objective criteria linked to experience, expertise and operational and financial capacity, and shall comply with the following cumulative conditions:

(a) it shall ensure that eligible financial intermediaries and fund managers are established in accordance with the applicable laws;

(b) it shall not discriminate between financial intermediaries and fund managers on the basis of their place of establishment or incorporation in any Member State;

(c) it shall aim at establishing adequate risk-reward sharing arrangements as referred to in paragraph 10, and profit-driven decisions as referred to in paragraph 15.

Risk finance measures shall ensure that the financial intermediaries receiving the public contribution take profit-driven decisions when providing eligible undertakings with risk finance investments. This obligation is met where the following cumulative conditions are fulfilled:

(a) the Member State, or the entity entrusted with the implementation of the measure, shall provide for a due diligence process in order to ensure a commercially sound investment strategy for the purpose of implementing the risk finance measure, including an appropriate risk diversification policy aimed at achieving economic viability and efficient scale in terms of size and territorial scope of the relevant portfolio of investments;

(b) risk finance investments provided to the eligible undertakings shall be based on a viable business plan, containing details of product, sales and profitability development, establishing ex ante financial viability;

Financial intermediaries shall be managed on a commercial basis. This requirement is met where the financial intermediary and, depending on the type of risk finance measure, the fund manager, fulfil the following cumulative conditions:

(a) they shall be obliged by law or contract to act in accordance with best practices and with the diligence of a professional manager acting in good faith and avoiding conflicts of interest; regulatory supervision shall apply, where relevant;

(b) their remuneration shall conform to market practices. This requirement is presumed to be met as long as they are selected through an open, transparent and non-discriminatory selection procedure in accordance with in paragraph 14;

(c) they shall share part of the investment risks by either co-investing their own resources or receiving a remuneration linked to performance, so as to ensure that their interests are permanently aligned with the interests of the Member State or its entrusted entity;

(d) they shall set out an investment strategy, criteria and the proposed timing of investments;

(e) investors shall be allowed to be represented in the governance bodies of the investment fund, such as the supervisory board or the advisory committee, if any.

Risk finance measures providing risk finance investments for SMEs that do not fulfil the conditions laid down in paragraph 3 shall be compatible with the internal market within the meaning of Article 107(3) of the Treaty and shall be exempted from the notification requirement of Article 108(3) of the Treaty, provided that the following cumulative conditions are fulfilled:

(a) at the level of the SMEs, the aid fulfils the conditions laid down in Commission Regulation (EU) No 1407/2013 (⁵⁹), Commission Regulation (EU) No 1408/2013 (⁶⁰) or Regulation (EU) No 717/2014, whichever is applicable;

(b) all the conditions laid down in this Article are fulfilled, with the exception of the conditions set out in paragraphs 3, 4, 8, 12 and/or 13;

(c) for risk finance measures providing risk finance investments to eligible undertakings in the form of equity, quasi-equity or loans, the measure shall leverage additional financing from independent private investors at the level of the financial intermediaries or the SMEs, so as to achieve an aggregate private participation rate reaching at least 60 % of the risk finance provided to the SMEs.

The private participation rate mentioned in the first subparagraph, point (c), shall be reduced to 30 % for investments that are either: made in assisted areas designated in an approved regional aid map in force at the time of provision of the risk finance investment in application of Article 107(3), point (a), of the Treaty; or that receive support on the basis of the Member State’s recovery and resilience plan as approved by the Council; or receive support from the European Defence Fund in accordance with Regulation (EU) 2021/697or under the Union Space Programme in accordance with Regulation (EU) 2021/696 or from Union Funds implemented under shared management covered by Regulation (EU) 1303/2013, Regulation (EU) 2021/1060 or Regulation (EU) 2021/2115.

Article 21a

Risk finance aid to SMEs in the form of tax incentives for private investors who are natural persons

Where the independent private investor provides risk finance directly to the eligible undertaking, in order to ensure an adequate participation of such independent private investor, in accordance with Article 21(12), the tax relief, counted as the cumulative maximum tax relief from all tax incentives combined, shall not surpass the following maximum thresholds:

(a) 50 % of the eligible investment carried out by the independent private investor into the eligible undertakings referred to in Article 21(3), point (a);

(b) 35 % of the eligible investment carried out by the independent private investor into the eligible undertakings referred to in Article 21(3), point (b);

(c) 20 % of the eligible investment carried out by the independent private investor into the eligible undertakings referred to in Article 21(3), point (c), or of a follow-on eligible investment into an eligible undertaking after the eligibility period referred to in Article 21(3), point (b).

The tax relief thresholds for the direct investments mentioned in the first subparagraph, may be increased up to 65 % under point (a), up to 50 % under point (b) and up to 35 % under point (c) for investments that are either: made in assisted areas designated in an approved regional aid map in force at the time of provision of the risk finance investment in application of Article 107(3), point (a), of the Treaty; or that receive support on the basis of the Member State’s recovery and resilience plan as approved by the Council; or receive support from the European Defence Fund in accordance with Regulation (EU) 2021/697 or under the Union Space Programme in accordance with Regulation (EU) 2021/696; or that receive support from Union funds implemented under shared management covered by Regulation (EU) 1303/2013, Regulation (EU) 2021/1060 or Regulation (EU) 2021/2115.

Article 22

Aid for start-ups

Eligible undertakings shall be any unlisted small enterprise up to 5 years following its registration, that fulfils the following cumulative conditions:

(a) it has not taken over the activity of another undertaking, unless the turnover of the overtaken activity accounts for less than 10 % of the turnover of the eligible undertaking in the financial year preceding the take-over;

(b) it has not yet distributed profits;

(c) it has not acquired another undertaking or has not been formed through a merger, unless the turnover of the acquired undertaking accounts for less than 10 % of the turnover of the eligible undertaking in the financial year preceding the acquisition or the turnover of the undertaking formed through a merger is less than 10 % higher than the combined turnover that the merging undertakings had in the financial year preceding the merger.

For eligible undertakings that are not subject to registration, the 5 year eligibility period shall start from either the moment when the undertaking starts its economic activity or the moment it becomes liable to tax with regard to its economic activity, whichever is earlier.

By way of derogation from the first subparagraph, point (c), undertakings formed through a merger between undertakings eligible for aid under this Article shall also be considered eligible undertakings up to 5 years from the date of registration of the oldest of the merging undertakings.

Start-up aid shall take the form of:

(a) loans with interest rates which are not conform with market conditions, with a duration of 10 years and up to a maximum nominal amount of EUR 1.1 million, or EUR 1.65 million for undertakings established in assisted areas fulfilling the conditions of Article 107(3), point (c), of the Treaty, or EUR 2.2 million for undertakings established in assisted areas fulfilling the conditions of Article 107(3), point (a), of the Treaty. For loans with a duration comprised between 5 years and 10 years the maximum amounts may be adjusted by multiplying the amounts above by the ratio between 10 years and the actual duration of the loan. For loans with a duration of less than 5 years, the maximum amount shall be the same as for loans with a duration of 5 years;

(b) guarantees with premiums which are not conform with market conditions, with a duration of 10 years and up to maximum EUR 1.65 million of amount guaranteed, or EUR 2.48 million for undertakings established in assisted areas fulfilling the conditions of Article 107(3), point (c), of the Treaty, or EUR 3.3 million for undertakings established in assisted areas fulfilling the conditions of Article 107(3), point (a), of the Treaty. For guarantees with a duration comprised between 5 years and 10 years the maximum amount guaranteed may be adjusted by multiplying the amounts above by the ratio between 10 years and the actual duration of the guarantee. For guarantees with a duration of less than 5 years, the maximum amount guaranteed shall be the same as for guarantees with a duration of 5 years. The guarantee shall not exceed 80 % of the underlying loan;

(c) grants, including equity or quasi equity investment, interests rate and guarantee premium reductions up to EUR 0.5 million gross grant equivalent or EUR 0.75 million for undertakings established in assisted areas fulfilling the conditions of Article 107(3), point (c), of the Treaty, or EUR 1 million for undertakings established in assisted areas fulfilling the conditions of Article 107(3), point (a), of the Treaty;

(d) tax incentives to eligible undertakings up to EUR 0.5 million gross grant equivalent or EUR 0.75 million for undertakings established in assisted areas fulfilling the conditions of Article 107(3), point (c), of the Treaty, or EUR 1 million for undertakings established in assisted areas fulfilling the conditions of Article 107(3), point (a), of the Treaty.

In addition to the amounts laid down in paragraphs 3, 4 and 5, start-up aid schemes can take the form of either a transfer of intellectual property (IP) or a grant of the related access rights, either free of charge or below market value. The transfer or the grant shall be from a research and knowledge-dissemination organisation, within the meaning of Article 2, point (83), that has developed the underlying IP through its independent own or collaborative research and development activity, to an eligible undertaking within the meaning paragraph 2. The transfer or the grant shall fulfill all of the following conditions:

(a) the purpose of the transfer of IP or the grant of related access rights is to bring a new product or service to the market; and

(b) the value of the IP is set at its market price, which is the case if it has been set according to one of the following methods: (i) the amount has been established by means of an open, transparent and non-discriminatory competitive procedure; (ii) an independent expert valuation confirms that the amount is at least equal to the market price; (iii) in cases where the eligible undertaking has a right of first refusal as regards the IP generated in collaboration with the research and knowledge-dissemination organisation, where the research and knowledge-dissemination organisation exercises a reciprocal right to solicit more economically advantageous offers from third parties so that the collaborating eligible undertaking has to match its offer accordingly. The value of any contribution, both financial and non-financial, of the eligible undertaking to the costs of the research and knowledge-dissemination organisation’s activities that resulted in the IP concerned may be deducted from the value of the IP referred to in this point.

(c) the aid amount of the IP transfer or the grant of the related access rights under this paragraph shall not exceed EUR 1 million. The aid amount corresponds to the value of the IP referred to in point (b), less the above-mentioned deduction referred to in the last sentence of point (b) and less any remuneration due from the beneficiary for that IP. The value of the IP referred to in point (b) can exceed EUR 1 million, in which case such additional amount may be covered by the eligible undertaking with own funds or other means.

Article 23

Aid to alternative trading platforms specialised in SMEs

The aid measure may take the form of tax incentives to independent private investors that are natural persons in respect of their risk finance investments made through an alternative trading platform into undertakings eligible under the conditions laid down in Article 21a(2) and (5).

Article 24

Aid for scouting costs

The eligible costs shall be:

(a) the costs for initial screening and formal due diligence undertaken by managers of financial intermediaries or investors to identify eligible undertakings pursuant to Articles 21, 21a and 22;

(b) the costs for investment research, as defined in Article 36(1) of Commission Delegated Regulation (EU) 2017/565 (⁶¹), in an individual eligible undertaking pursuant to Articles 21, 21a and 22, provided this research is publicly disseminated, and, if it has been disseminated to clients of the investment research provider before public dissemination, is disseminated publicly in the same form and no later than 3 months after the first dissemination to clients.

SECTION 4

Aid for research and development and innovation

Article 25

Aid for research and development projects

The aided part of the research and development project shall completely fall within one or more of the following categories:

(a) fundamental research;

(b) industrial research;

(d) feasibility studies.

The eligible costs of research and development projects shall be allocated to a specific category of research and development and shall be the following:

(a) personnel costs: researchers, technicians and other supporting staff to the extent employed on the project;

(b) costs of instruments and equipment to the extent and for the period used for the project. Where such instruments and equipment are not used for their full life for the project, only the depreciation costs corresponding to the life of the project, as calculated on the basis of generally accepted accounting principles are considered as eligible.

(c) Costs for of buildings and land, to the extent and for the duration period used for the project. With regard to buildings, only the depreciation costs corresponding to the life of the project, as calculated on the basis of generally accepted accounting principles are considered as eligible. For land, costs of commercial transfer or actually incurred capital costs are eligible.

(d) costs of contractual research, knowledge and patents bought or licensed from outside sources at arm's length conditions, as well as costs of consultancy and equivalent services used exclusively for the project;

(e) additional overheads and other operating expenses, including costs of materials, supplies and similar products, incurred directly as a result of the project; without prejudice to Article 7(1), third sentence, such research and development project costs may alternatively be calculated on the basis of a simplified cost approach in the form of a flat-rate of up to 20 %, applied to total eligible research and development project costs referred to in points (a) to (d). In this case, the research and development project costs used for the calculation of the indirect costs shall be established on the basis of normal accounting practices and shall comprise only eligible research and development project costs referred to in points (a) to (d).

The aid intensity for each beneficiary shall not exceed:

(a) 100 % of the eligible costs for fundamental research;

(b) 50 % of the eligible costs for industrial research;

(d) 50 % of the eligible costs for feasibility studies.

The aid intensities for industrial research and experimental development may be increased up to a maximum aid intensity of 80 % of the eligible costs in accordance with points (a) to (d), where points (b), (c) and (d) must not be combined with each other:

(a) by 10 percentage points for medium-sized enterprises and by 20 percentage point for small enterprises;

(b) by 15 percentage points if one of the following conditions is fulfilled: (i) the project involves effective collaboration: — between undertakings among which at least one is an SME, or is carried out in at least two Member States, or in a Member State and in a Contracting Party of the EEA Agreement, and no single undertaking bears more than 70 % of the eligible costs, or — between an undertaking and one or more research and knowledge-dissemination organisations, where the latter bear at least 10 % of the eligible costs and have the right to publish their own research results; (ii) the results of the project are widely disseminated through conferences, publication, open access repositories, or free or open source software; (iii) the beneficiary commits to, on a timely basis, make available licences for research results of aided research and development projects, which are protected by intellectual property rights, at a market price and on non-exclusive and non-discriminatory basis for use by interested parties in the EEA; (iv) the research and development project is carried out in an assisted region fulfilling the conditions of Article 107(3), point (a), of the Treaty;

(c) by 5 percentage points if the research and development project is carried out in an assisted region fulfilling the conditions of Article 107(3), point (c), of the Treaty;

(d) by 25 percentage points if the research and development project: (i) has been selected by a Member State following an open call to form part of a project jointly designed by at least three Member States or contracting parties to the EEA Agreement; and (ii) involves effective collaboration between undertakings in at least two Member States or contracting parties to the EEA Agreement when the beneficiary is a SME, or in at least three Member States or contracting parties to the EEA Agreement when the beneficiary is a large enterprise; and (iii) if at least one the two following conditions is fulfilled: — the results of the research and development project are widely disseminated in at least three Member States or contracting parties to the EEA Agreement through conferences, publication, open access repositories, or free or open source software; or — the beneficiary commits to, on a timely basis, make available licences for research results of aided research and development projects, which are protected by intellectual property rights, at a market price and on non-exclusive and non-discriminatory basis for use by interested parties in the EEA.

Article 25a

Aid for projects awarded a Seal of Excellence quality label

Article 25b

Aid for Marie Skłodowska-Curie actions and ERC Proof of Concept actions

Article 25c

Aid involved in co-funded research and development projects

Article 25d

Aid for Teaming actions

For investment aid for infrastructures under a Teaming action the following additional conditions shall apply:

(a) where the infrastructure pursues both economic and non-economic activities, the financing, costs and revenues of each type of activity shall be accounted for separately on the basis of consistently applied and objectively justifiable cost accounting principles;

(b) the price charged for the operation or use of the infrastructure shall correspond to a market price;

(c) access to the infrastructure shall be open to several users and be granted on a transparent and non-discriminatory basis. Undertakings which have financed at least 10 % of the investment costs of the infrastructure may be granted preferential access under more favourable conditions. In order to avoid overcompensation, such access shall be proportional to the undertaking’s contribution to the investment costs and these conditions shall be made publicly available;

(d) where the infrastructure receives public funding for both economic and non-economic activities, Member States shall put in place a monitoring and claw-back mechanism in order to ensure that the applicable aid intensity is not exceeded as a result of an increase in the share of economic activities compared to the situation envisaged at the time of awarding the aid.

Article 25e

Aid involved in the co-funding of projects supported by the European Defence Fund or the European Defence Industrial Development Programme

Article 26

Investment aid for research infrastructures

Article 26a

Investment aid for testing and experimentation infrastructures

The aid intensity may be increased up to a maximum aid intensity of 40 %, 50 % and 60 % of the eligible investment costs of large, medium and small sized enterprises respectively as follows:

by 10 percentage points for medium sized enterprises and 20 percentage points for small enterprises;

by additional 10 percentage points for cross-border testing and experimentation infrastructures which are subject to at least two Member States providing the public funding or for testing and experimentation infrastructures evaluated and selected at Union level;

by additional 5 percentage points for testing and experimentation infrastructures of which at least 80 % of annual capacity is allocated to SMEs.

Article 27

Aid for innovation clusters

The eligible costs of operating aid for innovation clusters shall be the personnel and administrative costs (including overhead costs) relating to:

(a) animation of the cluster to facilitate collaboration, information sharing and the provision or channelling of specialised and customised business support services;

(b) marketing of the cluster to increase participation of new undertakings or organisations and to increase visibility;

(c) management of the cluster's facilities; organisation of training programmes, workshops and conferences to support knowledge sharing and networking and transnational cooperation.

Article 28

Innovation aid for SMEs

The eligible costs shall be the following:

(a) costs for obtaining, validating and defending patents and other intangible assets;

(b) costs for secondment of highly qualified personnel from a research and knowledge-dissemination organization or a large enterprise, working on research, development and innovation activities in a newly created function within the beneficiary and not replacing other personnel;

(c) costs for innovation advisory and support services, including those services provided by research and knowledge dissemination organisations, research infrastructures, testing and experimentation infrastructures or innovation clusters.

Article 29

Aid for process and organisational innovation

The eligible costs shall be the following:

(a) personnel costs;

(b) costs of instruments, equipment, buildings and land to the extent and for the period used for the project;

(c) costs of contractual research, knowledge and patents bought or licensed from outside sources at arm's length conditions;

(d) additional overheads and other operating costs, including costs of materials, supplies and similar products, incurred directly as a result of the project.

Article 30

Aid for research and development in the fishery and aquaculture sector

Prior to the date of the start of the aided project the following information shall be published on the internet:

(a) that the aided project will be carried out;

(b) the goals of the aided project;

(c) the approximate date for the publication of the results expected from the aided project and its place of publication on the internet;

(d) a reference that the results of the aided project will be available to all undertakings active in the particular sector or sub-sector concerned at no cost.

SECTION 5

Training aid

Article 31

Training aid

The eligible costs shall be the following:

(a) trainers' personnel costs, for the hours during which the trainers participate in the training;

(b) trainers' and trainees' operating costs directly relating to the training project such as travel expenses, accommodation costs, materials and supplies directly related to the project, depreciation of tools and equipment, to the extent that they are used exclusively for the training project;

(d) trainees' personnel costs and general indirect costs (administrative costs, rent, overheads) for the hours during which the trainees participate in the training.

The aid intensity shall not exceed 50 % of the eligible costs. It may be increased, up to a maximum aid intensity of 70 % of the eligible costs, as follows:

(a) by 10 percentage points if the training is given to workers with disabilities or disadvantaged workers;

(b) by 10 percentage points if the aid is granted to medium-sized enterprises and by 20 percentage points if the aid is granted to small enterprises.

Where the aid is granted in the maritime transport sector, the aid intensity may be increased to 100 % of the eligible costs provided that the following conditions are met:

(a) the trainees are not active members of the crew but are supernumerary on board; and

(b) the training is carried out on board of ships entered in Union registers.

SECTION 6

Aid for disadvantaged workers and for workers with disabilities

Article 32

Aid for the recruitment of disadvantaged workers in the form of wage subsidies

Article 33

Aid for the employment of workers with disabilities in the form of wage subsidies

Article 34

Aid for compensating the additional costs of employing workers with disabilities

The eligible costs shall be the following:

(a) costs of adapting the premises;

(b) costs of employing staff solely for time spent on the assistance of the workers with disabilities and of training such staff to assist workers with disabilities;

(c) costs of adapting or acquiring equipment, or acquiring and validating software for use by workers with disabilities, including adapted or assistive technology facilities, which are additional to those which the beneficiary would have incurred had it employed workers who are not workers with disabilities;

(d) costs directly linked to transport of workers with disabilities to the working place and for work related activities;

(e) wage costs for the hours spent by a worker with disabilities on rehabilitation;

(f) where the beneficiary provides sheltered employment, the costs of constructing, installing or modernising the production units of the undertaking concerned, and any costs of administration and transport, provided that such costs result directly from the employment of workers with disabilities.

Article 35

Aid for compensating the costs of assistance provided to disadvantaged workers

The eligible costs shall be the costs of:

(a) employing staff solely for time spent on the assistance of the disadvantaged workers over a maximum period of 12 months following recruitment of a disadvantaged worker or over a maximum period of 24 months following recruitment of a severely disadvantaged worker;

(b) of training such staff to assist disadvantaged workers.

SECTION 7

Aid for environmental protection

Article 36

Investment aid for environmental protection, including decarbonisation

This Article shall also apply to aid for investments in installations, equipment and machinery producing or using, and dedicated infrastructure referred to in Article 2, point (130), last sentence, transporting hydrogen produced from electricity and which does not qualify as renewable hydrogen, to the extent that it can be demonstrated that the electricity-based hydrogen produced, used or transported achieves life-cycle greenhouse gas emissions savings of at least 70 % relative to a fossil fuel comparator of 94g CO2eq/MJ. To determine the life-cycle greenhouse gas emissions savings under this subparagraph, the greenhouse gas emissions linked to the production of electricity used to produce hydrogen shall be determined by the marginal generation unit in the bidding zone where the electrolyser is located in the imbalance settlement periods when the electrolyser consumes electricity from the grid.

In the cases referred to in the first and second subparagraphs, only hydrogen fulfilling the conditions set out in those subparagraphs shall be used, transported or – where relevant – produced throughout the lifetime of the investment. The Member State shall obtain a commitment to that effect.

The investment shall fulfil one of the following conditions:

(a) it shall enable the implementation of a project leading to an increase in the environmental protection of the activities of the beneficiary, beyond Union standards in force, irrespective of the presence of mandatory national standards that are more stringent than the Union standards; for projects linked to or involving dedicated infrastructure referred to in Article 2, point (130), last sentence, for hydrogen within the meaning of paragraph 1b, waste heat or CO2 or including a connection to energy infrastructure for hydrogen within the meaning of paragraph 1b, waste heat or CO2, the increase in the environmental protection may also result from the activities of another entity involved in the infrastructure chain; or

(b) it shall enable the implementation of a project leading to an increase in the environmental protection of the activities of the beneficiary in the absence of Union standards; for projects linked to or involving dedicated infrastructure referred to in Article 2, point (130), last sentence, for hydrogen within the meaning of paragraph 1b, waste heat or CO2 or including a connection to energy infrastructure for hydrogen within the meaning of paragraph 1b, waste heat or CO2, the increase in the environmental protection may also result from the activities of another entity involved in the infrastructure chain; or

(c) it shall enable the implementation of a project leading to an increase in the environmental protection of the activities of the beneficiary to comply with Union standards that have been adopted but are not yet in force; for projects linked to or involving dedicated infrastructure referred to in Article 2, point (130), last sentence, for hydrogen within the meaning of paragraph 1b, waste heat or CO2 or including a connection to energy infrastructure for hydrogen within the meaning of paragraph 1b, waste heat or CO2, the increase in the environmental protection may also result from the activities of another entity involved in the infrastructure chain.

Investments in CO2 capture and transport shall fulfil the following cumulative conditions:

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