Significant amendments in the VIP Cash Grant system

Significant amendments in the VIP Cash Grant system

2023. 08. 04.

Pursuant to Government Decree No. 366/2023 (VIII. 3.) on the Amendment of Government Decree No. 210/2014 (VIII. 27.) (hereinafter: Decree) on the use of the Earmarked Scheme for Investment Promotion from August 4, 2023 significant and favourable changes will be introduced to the non-refundable cash grant system provided on the basis of individual government decision. In line with the modifications to the Decree the minimum required investment volume and the collateral system for subsidies will be eased, and investments related to renewable energy production will become eligible in Budapest as well. In addition, aid may be granted under a new incentive scheme that provides favourable conditions for accelerated investments in sectors strategic for the transition towards a net-zero economy.

The new minimum volumes regarding the asset-based investments

Under the newly introduced rules, non-refundable aid may be available if the following investment thresholds shall be reached listed below, taking into account the location of the investment:

  • In Győr, Székesfehérvár, Tatabánya, Szekszárd, Kecskemét, Szombathely, Veszprém, Zalaegerszeg, Debrecen, Szeged and Eger, min. EUR 10 million,
  • min. EUR 5 million in Salgótarján, Miskolc, Nyíregyháza, Békéscsaba, Pécs, Kaposvár, Szolnok or any district seats,
  • min. EUR 3 million in all other countryside locations.

In the case of district seats which are also county seats, the higher amount of eligible costs shall be taken into consideration as a condition for eligibility.

The eligibility of investments in renewable energy production in Budapest

With the amendment of the Decree it allows to support “supplementary investments” dedicated to renewable energy production for self-usage in Budapest, in case the company fulfills the criteria of implementing a “main investment” of at least the same value with the condition that the total investment volume will reach min. EUR 10 million. The main investment must be linked to at least one of the manufacturing activities defined in the Decree. The intensity of the post-financed aid for the additional energy investment must not exceed 30%, with the possibility of increasing the aid intensity by 20% for small enterprises and 10% for medium-sized enterprises. The maximum amount of aid may reach EUR 15 million.

Changes in the collateral system

It is still obligatory for the companies to cover the subsidy amount with a collateral. However, after the end of the mandatory operating period which is 5 years defined for large enterprises and 3 years defined for SME’s at group level and the company fulfills the commitments stipulated for this mandatory monitoring period, a gradual reduction will be introduced in the value of the collateral related to the remaining monitoring years for those cases where the incentive agreement has not been signed yet.

Introducing a new incentive scheme for investments implemented with the aim to accelerate the transition towards net-zero economy (Temporary Crisis and Transition Framework - TCTF subsidy)

A new incentive scheme will be available for accelerated investments in strategic sectors to foster the transition towards net-zero economy throughout Hungary. The new subsidy measure will be open in line with the framework of the European Commission - to companies producing relevant equipment, namely heat-pumps, batteries, solar panels, wind turbines, electrolysers, as well as key components designed and primarily used as direct input for the production of such equipment or related critical raw materials necessary for their production.

The detailed rules and related additional information will be available on the HIPA website in the form of an Incentive Guide. The amendment to the Decree is published in the relevant issue of the Hungarian National Gazette at the related link.