VIP cash grant for technology-intensive investments

Further favourable changes have been introduced – based on our clients’ feedback- in the non-refundable VIP Cash Grant system with the purpose of supporting technology-intensive investments. The amendment came into force on the 21 November 2017.
The above mentioned incentive (Government Decree No. 210/2014 (VIII. 27.)) is provided by the Hungarian Government from 1 January 2017, with the assistance of the Hungarian Investment Promotion Agency (HIPA).
 
Investors considering technology- intensive investments have the opportunity to implement their investments and to achieve the 30% increase of revenue and/or wage cost within a four-year-long period instead of three years, with the minimum investment volume of EUR 20 million that is decreased from EUR 30 million.
 
One of the most important changes is that the maximum amount of the grant is increased to 75% of the adjusted maximum regional aid intensity instead of the former 25%. Furthermore, investments of large enterprises - employing more than 250 people in Hungary – that aim is to create a new establishment may be subsidized within the framework of the VIP cash grant.

Based on the decision of the European Commission the definition of relocation has been changed in the EU member states. The amendment will be applicable from 10 January 2018. The new definition adds that there is a relocation if the product manufactured or the service provided in the initial and in the aided establishments serve at least partly the same purposes and if there is a direct relocation between the initial and aided establishment.
 
After 10 January 2018 the prior approval of the European Commission is required for providing regional aid if there is a relocation in the aided establishment in the two years before the application is submitted, during the implementation period, and in the two years following the completion of the investment.