VIP cash subsidy regulation to be amended soon, with focus on R&D, competitiveness, and supplier cooperation

In the case of subsidies granted for asset-based investments, the eligibility threshold would be further reduced in certain locations: in some parts of the country, it would be possible to apply for subsidy with eligible costs of EUR 2 million. The minimum investment value could be modified as follows in different parts of the country:

• EUR 2 million: in municipalities not classified as county seats, in the counties of Borsod-Abaúj-Zemplén, Heves, Nógrád, Szabolcs-Szatmár-Bereg, Bács-Kiskun, Békés, Csongrád-Csanád, Baranya, Somogy, Tolna, and Zala;

• EUR 3 million: in municipalities not classified as district seats, in the counties of Hajdú-Bihar, Jász-Nagykun-Szolnok, Pest, Fejér, Komárom-Esztergom, Veszprém, Győr-Moson-Sopron, and Vas;
• EUR 5 million: in Salgótarján, Miskolc, Nyíregyháza, Békéscsaba, Pécs, Kaposvár, Szolnok, or in municipalities classified as district seats, in the counties of Hajdú-Bihar, Jász-Nagykun-Szolnok, Pest, Fejér, Komárom-Esztergom, Veszprém, Győr-Moson-Sopron, and Vas;
• EUR 10 million: in Győr, Székesfehérvár, Tatabánya, Szekszárd, Kecskemét, Szombathely, Veszprém, Zalaegerszeg, Debrecen, Szeged, and Eger.

In addition, commitments would be significantly restructured, with mandatory headcount retention only required in the case of new job creation. New eligibility criteria would be reaching additional wage costs of at least EUR 5 million, and additional sales revenue of at least EUR 25 million during the monitoring period. Moreover, according to the investor’s choice, it would also be required to make additional commitments, such as increasing per capita wage costs or per capita sales revenue or creating at least 25 new jobs. Furthermore, at least two additional commitments must be chosen: creating new R&D jobs, increasing direct R&D costs, in relation to the proportion of suppliers operating within a maximum distance of 100 km, cooperating with HIPA's supplier development activities, using renewable energy produced by the investor, or increasing the number of persons employed under dual training / student employment contracts / vocational training contracts. Minimum eligibility criteria would be set for each commitment.

For shared service centres, the requirement to create at least 25 new jobs would remain.

During the implementation of investments, it would still be possible to apply for subsidy for supplementary energy investments; besides the production or storage of renewable energy, subsidy can even be claimed for the production or storage of renewable hydrogen, or for any combination of the aforementioned elements.

A new element is that it would be possible to provide an advance subsidy payment for small and medium-sized enterprises for up to 25% of the subsidy amount.

A significant change is that it would no longer be necessary to implement a production investment or, in the case of SSCs, to create new jobs to apply for training subsidy.

In the future, training subsidy would only be available for medium-sized enterprises with a headcount of at least 100 (including the direct parent company's headcount) or for large enterprises, based on an individual Ministry decision. New eligibility criteria would be that the number of participants in the training project must reach 25, and the eligible cost must reach at least EUR 250 thousand. The maximum length of the training project would increase from the current 24 months to 36 months.

A significant easing for smaller enterprises is that enterprises with a headcount of at least 50 (including the number of employees at the direct parent company) will be eligible to apply. The previous headcount requirement was 100.

Based on the draft amendment, it would be an advantage during the evaluation of the projects to commit to filing a Hungarian-priority European or European-priority international patent application. In this case, the subsidy amount determined based on the number of patent applications would be disbursed after the patent application is filed.

Further changes are also expected in other aid categories, such as in the case of the profit repatriation-based subsidy, which is expected to be available for investments started already this year, and in the case of the profit-based subsidy, emerging enterprises would be eligible to apply only if they create at least 50 new jobs.