Temporary amendments to business development aid to continue until 30 June 2021
On 30 December 2020, the Government issued a decree that will extend the validity of the temporary amendments to the Government Decree on Discretionary Government Transfers to Develop Business Operations. The amendments entered into force earlier in the autumn. The decree applies to business development aid granted by the ELY Centres. The temporary amendments allow the granting of business development aid in the form of temporary State aid for a maximum of EUR 800,000 and the granting of aid to small companies that have been in difficulties before 1 January 2020.
The amendments to the decree are based on the European Commission’s communication on the temporary framework on State aid measures, the General Block Exemption Regulation and Finland’s State aid scheme. The State aid scheme involves a temporary easing of State aid rules due to the coronavirus epidemic. The aid scheme aims to help companies continue and develop their operations and start investment plans during and after the crisis. Another objective is to keep people employed. Initially, the temporary amendments were intended to be in force from 19 October to 31 December 2020.
However, the Commission decided on 30 November 2020 that Finland’s State aid scheme would remain in force until 30 June 2021. With the extension of the State aid scheme amid the prolonged coronavirus epidemic and the difficult economic situation, it has been deemed necessary to extend also the validity of the temporary amendments to the decree until 30 June 2021.
Granting of business development aid as temporary State aid to continue
From 19 October 2020, ELY Centres have been able to grant business development aid in the form of temporary State aid in accordance with Finland’s State aid scheme, including in cases where basic business development aid is granted to companies for development measures or investments. The maximum amount of aid that can be granted as temporary State aid is EUR 800,000 per company.
The business development aid can still be granted as de minimis aid. De minimis aid refers to small amounts of aid that may be granted to companies for a maximum of EUR 200,000 over three fiscal years.
Extension of business development aid to small companies in difficulty before 1 January 2020
As a result of the extension of the temporary amendments, under Finland’s State aid scheme, business development aid may until 30 June 202, be granted to small companies that have been in difficulties before 1 January 2020. Granting business development aid to a small company in difficulty is subject to the condition that the company is not involved in bankruptcy or restructuring proceedings at the time the aid is granted and that it has not received rescue aid or restructuring aid. In this context, a small company is defined as employing fewer than 50 employees and having an annual turnover or balance sheet total of less than EUR 10 million.
Although the amendment to the decree provides for the possibility of granting development aid to a company in difficulty, the decree does not change the general conditions for granting aid under the Government Decree on Discretionary Government Transfers to Develop Business Operations. The granting of aid will continue to require that the company is assessed to have the conditions to continue profitable operations, that the aid is estimated to have a considerable impact on the implementation of the project and that the project is considered significant for the development of the company’s operations.
Business development aid supports regeneration of SMEs
ELY Centres grant business development aid throughout the year to SMEs for their development measures and investments. These companies include start-ups or those looking to reform or grow. A particular focus is on internationalisation.
Business development aid may be granted to SMEs that are equipped to run profitable operations and have sufficient resources for measures to improve their competitiveness. Companies cover a significant part of the development project costs.
Finland’s Structural Funds programme provides a part of the funding for business development aid. This means that for a project to be eligible for business development aid, it must meet the objectives and criteria of the structural funds programme. Applications may be submitted at any time before the start of the project.
The amendments related to the granting of business development aid that are valid until the end of June 2021 concern the granting of aid in the form of temporary State aid and the possibility to grant aid to small companies that have been in difficulties before 1 January 2020. The amendment to the decree therefore does not provide for a new form of aid.
Emmi Äijälä, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 047 216 (available on 30–31 December 2020 and from 11 January 2021)
Raimo Puhto, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 295 063 688 (available from 11 January 2021)