Incentives a a Glance

Providing Funds

Germany offers numerous incentives to all investors - regardless of whether they are from Germany or not. Funds are provided by the German government, the individual federal states, and the European Union (EU). These are predominantly aimed at new investments geared towards fostering economic growth.

Germany has EUR 26.3 billion funding provided by the EU (co-financed using means obtained from German national and regional budgets) at its disposal until 2013. In addition, Germany and its individual states make their own incentives funds available.

Incentives Programs in Germany

There are a number of incentives programs available which can be grouped into two overall packages:

• the investment incentives package with different measures to reimburse investment costs
• the operational incentives package to subsidize expenditures after the investment has been settled

Each package consists of a different number of programs, ranging from cash incentives for the reimbursement of capital expenditures to incentives for research and development (R&D).

Determining Eligibility

Each incentives program defines industries as well as forms of investments (e.g. greenfield projects or expansions) eligible for funding. Foreign investors are subject to exactly the same conditions available to German investors.

Each program has a set of criteria (such as company size, planned investment project location, etc.) which determine individual investment project incentive levels.

EU Criteria Determining Company Size

Company size is generally determined according to an EU-wide classification system in which companies are categorized as being small, medium-sized or large according to their staff headcount, annual turnover or annual balance sheet total.

The size of a company is an important criteria to determine the possible incentives level a company may receive. Most incentives programs offer the highest incentives rates to small and medium-sized enterprises (SMEs). Some programs may even specifically target SM Es (this is very often the case with R&D programs).

The criterion concerning the headcount is compulsory. In addition, either of the annual turnover or the balance sheet criteria must also apply. Please refer to the explanation of the European Commission for more information.

• SME Definition of the European Commission

Regional Economic Development Program North Rhine-Westphalia

In addition to the development programs of the EU and the German government, North Rhine-Westphalia has established its own investment incentives for the creation and securing of long-term jobs and training positions in the structurally weak regions of the state with its Regional Economic Development Program (RWP). The RWP grants are intended for industrial investments which create or secure jobs.

Promotion is provided primarily for supraregionally operating companies:
Small and medium-sized enterprises (SM Es) are subsidized provided that

• they have fewer than 250 employees,
• their annual sales do not exceed € 50 million or their balance sheet total is not more
• than € 43 million, and
• they do not exceed these limits by including participations or partnerships (EU checking procedure),
• and large enterprises managed along SM E lines.

In individual cases, other large enterprises can also be subsidized, with the maximum subsidy lying at € 2.5 million.

The development areas include large parts of the Ruhr region, Mönchengladbach and the districts of Heinsberg, Herford, Höxter and Lippe.

The companies receive grants up to 28 percent of the investment sum. The maximum invested amount eligible for subsidy per newly created jobs is € 500,000 (per secured job € 250,000). Applications should be submitted to NR W.INV EST or NR W.BAN K.

Contacts

NR W.INVEST GmbH
Economic Development Agency
of the German State of North Rhine-Westphalia
Völklinger Str. 4, D-40219 Düsseldorf
Phone: +49 211 13000-0
Fax: +49 211 13000-154
E-Mail: nrw@nrwinvest.com

NRW.BANK
Advice Center Rhineland
Kavalleriestraße 22, D-40213 Düsseldorf
Phone: +49 211 917414800
Fax: +49 211 917419219

Branch Office of NRW.BANK in Münster
Advice Center Westphalia
Friedrichstraße 1, D-48145 Münster
Phone: +49 251 917414800
Fax: +49 251 917412666
www.nrwbank.de