June 6 (SeeNews) - The European Commission said on Tuesday that it approved under state aid rules the reintroduction of a 77 million euro ($82.2 million) regional aid mechanism in support of investments in manufacturing by small and medium-sized enterprises (SMEs) in Bulgarian municipalities with high unemployment, defined as at least 25% higher than the national average.
The scheme, which was most recently in force until December 2021, is in line with conditions set out in EU guidelines and the state aid amount does not exceed the maximum stipulated in Bulgaria's EU-approved 2022-2027 regional aid programme, the Commission said in a press release.
The scheme foresees an exemption from corporate income tax for SMEs to support initial investment projects such as setting up a new production base or increasing the capacity of an existing one, as well as for product diversification or an overhaul in a company's existing production process. The maximum amount of aid per beneficiary will be 50% of the eligible investment costs, except for 25% in the case of municipalities in Bulgaria's southwestern region.
Bulgaria sought approval from the EU executive to reintroduce the scheme until the end of 2027. The regional aid mechanism was first approved by the Commission in 2008, before being reintroduced in 2015 and prolonged in late 2020.
Bulgaria has six regions eligible for regional investment aid, of which northwest Bulgaria is among the EU's most disadvantaged, with a GDP per capita below 75% of EU average, according to Eurostat data from end-2021.
($ = 0.9368 euro)