INVESTMENT INCENTIVES IN GREECE. U.K. FRANCE. SPAIN

INVESTMENT INCENTIVES IN
GREECE. U.K.
FRANCE. SPAIN
DESIGN BY
SPYRIDCN . V . DALAKOS
LECTURE:
ANNA PYRALEMIDOU
FXtR AT.T. My FRTTODK
IN EUROPE
CONTENTS
INTRCCUCTICN
GREECE
.........
UNITED KENGDCM
EI«3AND
..
...
SCOTLAND
WALES
..
....
FRANCE
.........
SPAIN
..........
CONCLUSION
TABLES
.....
.........
USEFUL AEDRESSES
INTRODDCTION
The m a i n p u r poses
offers,are
ta l w h i c h
There
an d th e
All
of t h e i n v e s t m e n t p r o g r a m m e s
to att r a c t potential
is t h e b a s i s
is a d i r e c t
which every country
course c a pi t al.Capi­
increase
i n c e n t i v e s w h i c h a re a v a i l a b l e
of t h e
country.
o f t h e G P D of a c o u n t r y
to potential
investors.
i n v e s t o r s , d o m e s t i c or f o r e i g n , t r y t o f i n d t h e b e s t c o u n t r i e s
find the
right ways
which
is a n e c o n o m i c w a r a m o n g g o v e r n m e n t s
to o f f e r t h e
th e p o t e n t i a l
right
offer a w i d e
range
of
incentives
i n v e s tment.All the memb e r states
T h e E.C.
the
same
in the
t h e G a p a m o n g t he
in an attempt
to find
investment.Governments
international competition
are
t r y i n g to
outside
investment
is t r y i n g , w i t h d i r e c t i v e s
reduce
for the
of E.C.
programmes which will allow investors
as a w h o l e w h i c h o f f e r s
to
i n v e s t m e n t p r o g r a m m e s .P r o g r a m ­
investors wil l a n alyse
the r i g h t on e w h i c h w i l l be t he b a s i s
EIB,to
an d of
for the e c o n o m i c d e v e l o p m e n t
li n k b e t w e e n t h e
to i n v e s t t h e i r m o n e y . T h e r e
mes
investors
for
form common
of E u rope
to face Eu r o p e
incentives.
a n d p r o g r a m m e s ,w i t h t h e h e l p of
investment programmes
of t h e m e m b e r
states.
The
research,for
m e n t p r o g r a m m e s ,w a s
t h e p r e s e n t a t i o n of
for a p e riod of
my m a i n p r o b l e m w a s w i t h p u b l i c
Sometimes
sent me
alternative ways
Th e
first
which my
to
the co u n t r i e s and
4 months
literature and
therefore
to p o t e n t i a l i n v e s t o r s . T h e
r e d a r e u n d e r th e a d m i n i s t r a t i o n of t h e m i n i s t r y of
The
second c h apter analyses
the
investment
I h ad to find
s t a r t w r i t i n g t h e bo o k .
c h a p t e r w h i c h is a b o u t G r e e c e d e s c r i d e s
country offers
invest­
problems,
organisations.
rather on i n t e r e s t i n g and
select the
the
I f a c e d a l o t of
the
incentives
4 incentives
incentives
i n t h e O.K.
The c o u n t r i e s w h i c h a r e p a r t of t h e U . K . ,E n g l a n d , S c o t l a n d , W a l e s
in d i f f e r e n t c h a p t e r s d i s c r i b e o t h e r i n c e n t i v e s . T h e r e
government
investment programme w hich
is
available
offe­
national economy.
are
is a c e n t r a l
in E n g l a n d , S c o t l a n d ,
-2Wales.Local governments
and
ves. Th e m a i n c h a r a c t e r i s t i c
incentives
and
it w o u l d
sation to know all
The
the
impossible
incentives
the
state
investment
e v e n the c e n t r a l g o v e r n m e n t
incentives
that
in London.
the Fre n c h g o v e r n m e n t
i n v e s tors.The m a i n point in r e l ation to incentives
a s s i s t a n c e to i n v e s t o r s
In S p a i n i n v e s t m e n t
nce w i t h
range of
for a n y one p erson or o r g a n i ­
l o c a l a u t h o r i t i e s ,r e g i o n s ,c o u n t i e s
f e r e n t k i n ^ s of
offer different incenti­
is t h a t t h e r e is a w i d e
seems
third chapter analyses
offers to pot e n t i a l
is the
local a uthorities
incentives
incentives
are
,t o w n s
and villages,offer d i f ­
t o a t t r a c t t h e m i n t h e i r ar e a .
almost
and inc e n t i v e s
the
s a m e as t h e U .K.
from the
and F r a ­
different autonomous
regions.
Finishing the
S l i g o R.T . C .
introduction I would
and m y
Pyralemidou who was
like to t h a n k al l
for
Of c o u r s e I w a n t t o
in Greece
for m y
success
their assistance
Papadodyma
all m y friends
in
of K a v a l a .E s p e c i a l l y M r s A n n a
p ublic and private
thank mrs
and
like to t h a n k all m y lectures
in T . E . I .
the basis
the
S p a i n a n d the U.K.
economy
lectures
in
Ireland.I would also
institutions
and
in G r e e c e , F r a n c e ,
i n t e r e s t in m y res e a r c h .
f r o m t h e m i n i s t r y of n a t i o n a l
from Spain,Germany,France
and
Greece.
And
fina l l y m y e m p l o y e r in the L i f f e y T r u s t m r
his K i n d n e s s
b e f o r e th e
in a l l o w i n g m e
p u b l i c a t i o n of
to u s e p a r t of m y w o r k
Seamus Mc'Der m o t t
in the
t he b o o k i n e a r l y o c t o m b e r .
for
final p r o j e c t
INVESTMENT GRANT
BASIC DETAII5
The investment law has divine the cxxntry into 5 regicns:
A,B,C,D,raRACE, in 2 main sectors
a) manufacturing,cxaft industry, agriculture and stock-breeding,
mining enterprises etc.
b) Hotels,canp sites,enterprises operating mineral springs or
winter tourism centres.
In every region and every different kind of sector the investment
get different grant.Also there are exceptions like the special
zcnes,the special investments and tte NA.VI.PE.,v^iich get
more grants that the other types of investment.
AEMENISTRATI»!
The administrative body is the Ministry of National Eccnccny.The
Ministry of Naticnal Eccnany decide for investnent project over
£ 1.3 millicns.Application involving investments of less than
£ 350.000 shall be submitted to the Hellenic organisation
of small and medium sized business (BCmEX).For the Agriculture
investments of up to £ 800.000,applications shall be
submitted to the Agriculture Bank of Greece (A.T.E.).
The application form, must be submitted together with other documents
such as enployment, environment protection, business plan etc. The
cost of the application form depend from the total project cost
(between Drs. 10.000 and Drs 200.000). The application form shall be
submitted, during the first two n m t h s of the first or second half
of the year. If the project is begun before the publication of the
decision making is m the sole responsibility of tie investor and
the administration body is under no c±)ligation to give grant to the
project.Soil worfis (earthncving,fencing),the opening of credit and
ordering of machinery shall not constitute"ccmmencement of investment"
and may be undertaken prior to submission of the relevant application.
OOVIiyiGE
The capital assistance-grant- is available for investments up to
Drs. 2.5 billions (£7,400.000).In calculating the amount
£7,500.000, the total amount of the investment programme must
be taken into account.More specify, the total amount of the
investment prograime is calculatirp as the sum of all investments
programmes relating to the same production parocess within 5 years
from the octipletion of the first investment.
The grant start to be paid vA>en the 50% of the investor's minimum cwn
participjation-depend of the cost- and 25% of the financing bank
p>articipation if any, has been deposited and spent on the investment
project.The grant shall be disbursed in instalments in such way that
the balance of the investor's own participation and of the loan are
spent simultaneously, with the last instalment being paid upon confirmation
of the corpleticxi of the investment.
The atncunt limit for the investments are:
a)
Drs 30.000.000. (£88,(XX)) for investments involving production
of energy, stock-breeding and fish products,packing,preservation
and investment involving estblishment or expansion by agricultural,
forest and fishing conpanies.
b)
Drs 60.000.000 millions (£176,500) for development or expansion of
manufacturing ccnpanies.
c)
Drs 45.000.000. millions (£132,500) for the craft industry
d)
e)
Drs 5.000.000. millions (£14,000) for investments involving
establishment or expansion by oorpanies providing new technology,
e.g. software-mining research.
Drs 2.000.000. millicns (£5,900) for modernisation investments
of the previous oorpanies in case d.
f)
Drs 10.OCX).000. millions (£29,5(X)) for modemisaticn of the
ocrpanies except the oorpanies in category d.
FOR 1ΉΕ INDUSTRIAL SECTOR THE GRANTS ARE:
SP. INVESTMENT
FOR THE TOURISM SECTOR THE GRANTS ARE:
SP. INVESTMENT
INCREASED DEPRECIATION RATES
The increased rates of depreciation are given to the investments
that vd.ll be effected up to 31/12/1994.The normal depreciation
rates, depending on the location of the unit and the number of
shifts worked,are increased as follows:
MANUFACTURINS-CRAFT INDUSTRY
TOURISM
Mining and quarrying cctipanies are eligible for provision applicable
to area C except the mining conpanies in area A and D.For hotel and
tourist units the increased depreciaticxi rates,are those of the 1 shift.
Eligible for provision are conpanies in agriculture factor involving
m o d e m technology,manufacturing conpanies,construction activities bylocal authorities or co-operatives and construction firms which vrant
to modernise or replace the equipment.
The depreciation rates are applicable only:
a) If the average annual number of workers on the second shift are at least
50% of the first shift.If the conpany works a third shift,the average
number of enployees enplcyed on the 2nd and 3rd shif-ts must be at least
four fifth's -80%- of the number enployed on the 1st shift.
b) If the average annual energy of -the 2nd shift is equal with the 50%
of the annual energy that -the 1st shift spent.If there is 3rd shift
the average annual energy of the 2nd and 3rd shift to be at least
80% of the annual energy rhat the 1st shift spent.
For the purpose of calculating normal and additicxial depreciation
allowances,the free grants which the enterprise has received from the
Sta-te shale be deducted from the acquisition value of it's fixed assets.
The additional deprecia-ticn rates granted in -the case where the
investment has been including in the system of tax allowances and also
in the system of investment grants.
INTEREST RATE SUBSIDY
The investnents vrfiich have qualified for grants also avrarded a
percentage subsidy on the interest,paid on bank loans or loans
frcm other financing instituticns.
The percentage of interest rate subsidy shall be equal to the
percentage of investment grant and shall b e given for the first
three years service of the loans.
If the project is a d e e m e d with the protecticn of envirerment
then the interest subsidy is available for 6 years.In area D
the dmterest subsidy can be for 6 years if the project is located
in a special areas.
For the investnents in the area of THRACE, the interest rate subsidy
is available for the whole period of the loan repaynent for a maximum
period of 10 years.
The Interest rate subsidy is rot granted in cases where the investment
has been made subject to the system of tax allowances.
1 Daily press
Special
Investment
Mining &
Quarrying
Construction
AgricultureForest-Fishing
firms enploying
nodem
techrology.
SPECIAL
ZCMS
25%
25%
25%
35%
45%
40%
40%
40%
45%
55%
-
25%
25%
35%
45%
15%
15%
15%
15%
15%
-
35%
35%
35%
45%
15%
25%
25%
35%
45%
TAX
ALLOWANCES
ΟΟΝΙΈΚΓ OF INCENTIVE
Tax allcwances are granted on the net profits of the enterprises
for fixed time,vrfiich are located in,moving to or are being set
up in areas B,C,D,l«RACE, provided they effect new productive
investments prior to 31/12/2004.
The tax allowances rates for all the coipanies in except the
tourist and hotel enterprises and oorpanies cperating mineral
springs are as follow:
TPK
AUCWRNCES
% OF THE
PROFITS
For the tourism and hotel enterprises and ccnpanies operating
mineral springs are:
TAX ALLOWANCES
INVESTMENT
h OF THE
PROFITS
% OF THE
INVESTMENT
% OF THE
PROFITS
In seme instances investments are entitled to the tax allcwances
in other areas that those set out belcw:
a) Invests in the ETBA Industrial Estate of Thessalcniki and
invests by construction cctipanies irrespective of the area
in which are located, entitled to tax allcwances in area B.
b) Mining and quarrying ooipanies in area B, projects vhich
involve special investment in area A and B, enterprises
operation spas-winter tourism oentres-marinas-golf centresexcept the area A,firms engaged in the priding and publicity
of daily press in area A,B, are entitled to tax allowanoes
in area C of the Industrial sector.
c) Conpanies which are involve in special investments for mining and
energy research in area C, hotel enterprises vhich are undertake
investment for establishment or expansion and sport or winter
tourism enterprises in area B and C, are entitled to tax allcwances
in area D.
PREREQUISITES FOR TAX ALLOWANCES
There are seme conditions that the oenpanies must have If they
want to get the benefits of the tax allowances:
a) The coipany must keep account books of category C of the
code of Taxaticn Documents,
b) Entered as tax free reserves in separate accounts,
c) Deducted frem the profits of the financial year in vhich the
investment took place,
d) Calculated by reference to the next profits deducting
appropriations to legal reserves and distributicn of profits.
TAXATION OF ALLCXffiNCES
The tax allowanoes,added to the profits of the enterprise and
taxed in the financial year during which:
a) Corpany wound up to the death of the entrepreneur or of a
member of a cenpany
b) Fixed assets sold before the lapse of five years since they
were acquired and for the amount of the tax allcwances viiich
corresponds to the value of the said fixed assets,except if
the cenpany replace the fixed assets in a peried of 6 months
from the end of the accounting period that the sale was made.
BANKING SYSTSyi
In Greece there are many banks viiich provide the ootipanies with
financial and consultant assistance. The head of the banking
system is the Bank of Greece vrfiich give the main line. The ccmmercial banks vrfTich attract most of the private investments and srpply
the conpanies with sort term credit and long term funding of private
investments.The third sector of the banking system is the Investment
Banks. The Investment Banks in Greece are:
a) ETBa( THE HELLENIC INDUSTRIAL DEVELOPMENT BANK). It's main cbject
is to assist industrial, tourism and shipping ccnpanies. Also is
engaged in attracting foreign capital for investments.
b) ETEBA( NATIOCiL INVESTMENT BANK FOR INDUSTRIAL DEVELOPMENT). The
main purpose is the proioticn of industrial and related c^jeraticns
as well as the development of the country capital market.
c) INVESTMENT BANK S.A. It,s main objective are the granting of
long-term loans for investments,participation in the equity of
existing ccnpanies and the underwriting of new issues.
The forth sector are seme Special Credit Organisation like the ATE
(AGRICULTURE BANK OF GREECE),which supplies farmers with sort and
Icng-terms loans and finances agricultural industries. Also the
NATIOIAL MORTGAGE BANK OF GREECE, which provide Iceg-term housing
loans and also grants loans for hotel facilities.
The sectors of which finance assistance are providing from the
ocmmercial banks and the other credit organisaticxis are INDUSTRY,
CRAFT INDUSTRY AND TOURISM.For every one sector the loans are as
follow;
INDUSTRY
CAPITAL
EXPENDITURE
NEEDS
CAPITAL
REQUIRIMENTS
OPERATIONAL
REQUIREMENTS
PREPARATION
INSTALMENTS
INSTALMENTS
INSTAIMENTS
INSTAIMENTS
6 MONTHS **
LONG-TERM LOAN
BUILDING-EXPANSICN
INTEREST RATE
FIXED FREELY
FIXED FREELY
DISBURSEMENT
INSTAmENTS
INSTALMENTS
6 MCKIHLY
INSTALMENTS *■>
REPAYMENT
CRAFT INDUSTRY
PURCHASE CR
INSTALLATI04 OF
MACHINERY
INTEREST RATE
DISBURSEMENT
INSTALMENTS
1 YEAR
INSTALMENTS
Figure 13. Designated Areas in the United Kingdom.
E N G L A N D
J δ
m
ο
E N G L A N D
INTRODUCTION
POPULATION: 48.000.000. MILLION
AREA:29.772 sq miles
POLITICAL SYSTEM: DEMOCRACY
NATIONAL LANGUAGE: ENGLISH
OTHER LANGUAGE: FRENCH, GERMAN
CURRENCY: STERLING
EXCHANGE RATE: 1 STERLING= 0,98 PUNT
England is a lowland country and the capital is Irrdon. The
main cities are Birmingham, Leeds, Liverpool and Bristol.
There are 8 regions in England and each regicn in England
has a different kind of beauty. The capital of England,
London, is the centre of the ecoronic life of the world
and all the eocncmic activities are effecting by the
biggest stock market in the world .
The investing incentives to the ccnpanies vhich want to invest
in England are:
-Central Government Assistance
-Local Assistance
CET^KAL OOVEI^I^Eyr ASSISTANCE
A)
REGIOiAL SE3JCTIVE ASSISTANCE
Basic Details
This grant is available for investment viiich take place in the
Assistance Areas. There are two main broad categories of the
qualified projects.
a) Projects which create enployment
b) Projects viiich safeguard the existing enployment without to create
new jobs
Coverage
The grant is related to fixed and working capital cost of the project
and numbers of jc±>s involving. The grant is paid in three annual
instalments, with the first instalment paid viven one third of the
jobs have been created. For small projects v M c h are ooipleted quickly,
the grant may be paid in one or two instalments.
Conditions
All the applicants from the private sector of industry and ccmmerce
are eligible to receive grants,the level of virLch is negotiable. The
service sector projects which serve only a local market do not
generally qualify for this type of assistance.
B)
REGIONAL EOTERPRISE GRANTS
1) INVESTMEOT O^ANT
Firms in the Development Areas with less than 25 enployees can apply
for Investment Grant vrfiich cover 15% of fixed assets ( maohinery,
buildirgs land and site preparation) up to a maximum £15,000.
Conpanies in manufacturing and service sector are eligible to c
the Investment Grant.
2) INNOVATIOI GRANT
Conpanies in Development Areas with less than 25 enployees can ^ p l y
for an Innovation Grant of up to 50% of the piroject o»st. The manufacturirg and service caipanies are eligible to receive the Grant
The cxnpanies cannot receive the REGIONAL SELECTIVE ASSISTANCE and the
REGIONAL ENTERPRISE GRANT for the same project.
C)
COMSULTRNCY INITIATIVE
Basic details
Under this Grant, the anall and Medium sized enterprises viith less
than 500 enployees can receive money for consultancy.The consultancy
can cover a vhole range of activities -marketing, design, quality,
financial and management information systems etc.-.
Coverage
The amount that cover of the grant is 50% of the cost of the consultancy
projects.In the Assistance Areas two thirds of the costs will be paid.
D)
SCHEME TO SUPPORT INNOVATION IN SMALL COMPANIES
I) SUPPORT FOR PRCCUCTS UNDER RESEARCH (SPUR)
Basic Details
SPUR is a scheme which help the small firms to develop new products
and process vrfiich involve a significant technological advance. Corpanies
vhich enploying fewer than 500 enployees are eligible to receive the
grant.
Coverage
The cost of the project must be at least £50,000 on research
and development and 30% grant is payable up to a maximum grant of
£150,000.
2) SMALL FIRMS MERIT AWARD FOR RESEARCH AND TECHNOLOGY (SMART)
Basic Details
SMART is a ccnpetiticn award and give finance assistance viable ideas
from small enterprises with less than 50 enployees or Individuals ,vhen
the idea is still in the first steps.
Every award cover 75% of the cost for the first year up to £45,000.
The winners can win again grant of 50% of the seocnd year up to a
maximum £60,000. Ideas can cover a v*iole range as informaticn technology,
advanced materials technology,biotechnology etc .
All the applications and the proposals for the award must be applied
at the beginning of ipril.
Basic Details
The main pjurpose of the city grant is to enccurage private
sector capital projects within 57 local authorities in
England, including areas of the Urban Developnent
Corporaticns. The benefits of the city grant help the
investor to reduce the differences between the cost and
the value of the project, helping the investor to get a
reasonable return of his investment.
Coverage
The investor of the private sector get direct the City
Grant and is available for investments vhich cn conpleticn
will be worth over £500,000 and vhich provide new jobs,
private housing or industrial space.
Administration
The department of environment is the organisation vhich
give all the informaticn to the investors for the City Grant.
BUSINESS E X P A N S I W SCHEME
The Business Expansion Scheme helps small firms by making
shares in small ccmpanies more attractive to outside
investors through tax relief.
Coverage
An investor who buys shares in certain unquote cotpanies
can obtain tax relief cxi investments up to £40,000 a year.
A small trading ccnpany can raise up to £750,000 a year
through the scheme.
Administration
Local tax inspectors and accountants can provide informaticn
for the Business Expansion Scheme.
LOAN GUARANTEE SCHEME
Basic Details
This scheme run by DTI ard provide a government guarantee for
loans by banks and other financial instituticns.
The government guarantees 70% of loans over 2 to 7 years
in return of a premium of 25% on the guarantee porticn of
the loan. The interest rate is likely to be the same as that
charged to small firms generally.
COLLABORATIVE RESERRCH fiSSISTANCE
Under these program mes projects can qualify for financial
suj^ort from the DTI. Assistance is available under the
programmes.
Basic Details
The main <±ijective of Eureka is the increase of Eurc^je's
productivity cn the world market in any field advanced
technology.
Coverage
Project participants are expected to arrange the necessary
funding themselves for their Eureka projects. DTI can help with
the higher costs involved with the Eurc^jean Collaboration
through non repayable grants to U.K. organisation.
Basic Details
Under this programme ccnpanies work together with science based
and other research institutions.
Up to 50% assistance is available under this programme.
DFRET.Trr LAND GRANT
Basic Details
The central government grants are available in England for
the repair of derelict land to bring it back to use or
improve it's appearance. Priority is given in the cases
which the larxi is not in good axiditioi and is dangerous
to the public health and the safety of the natural environment.
Coverage
Normally the rate is 50% but local authorities can receive
75% grant in the Naticxial Parits and Areas of natural beauty.
In the Assistance Areas local authorities can claim a grant
of 100% while for other cases the grant is 80%.
Administration
The regicnal office of the department of the Envirctment
or the Director of Planning Services are the official
bodies virich give further information for the grant.
EMPLOVMENT AND TRAINING g^ANT
Basic Details
Many parts of England offer training or eiiployment grants for
business, independent organisations and nationalised industries.
Coverage
The conditions and benefits of the programmes vary from area
to area, but generally 40%-60% approximately of cross wages
for a period of up to 6 months. The jobs must be permanent,
under 18 months, have basic hours of between 21-45 hours per
week and the minimum wage of £3 per hour is paid
ADVANCED TECHNOLOGY PROGRAMMES
Basic Details
The aim of this programme is to encourage pre-oorpetitive
collaborative research in new technologies. Project
proposals are invited under a wide range of current prograimes.
At least two independent oonpanies must participate, one
of vAiich should be capable of exploiting the results.
Coverage
Up to 50% assistance is available.
INDUSTRIAL AND Ca>MERCIAL PREMISES
Basic Details
There are 4 free zones in England, located in Birmingham,
liverpool. Tilbury and Southanptcn. At these, inported goods
may by held vd-thcxit payment of customs duty or import VAT.
Most normal import controls and the payment of duty tax
are required only when free zone goods are removed to the
U.K. market, used, or censured within the zones.
Conditions
A wide range of activities are eligible to occupy a place
in a free zone including:
- Loading - unloading and transhipment;
- Storage;
- Destruction of unsaleable or surplus goods;
- Prooessirp of most third country goods for export outside
the EC and processing of ocmmunity goods;
- Handling operations carried out with a view to ensuring
preservation or inproving the market table quality of
free zone goods or preparing them for distribution or
The free zones in England offer non-tariff advantages
which are:
- Siitplified customs j
- Security;
- Potential for inproved marioeting and presentation;
- Greater flexibility in determining final destinations
for goods subject to quota restrictions;
- Cash flow benefit resulting from exenption of duty
unless and until goods are exported or released into
free circulation.
LOCAL
msismtKZ
URBAN DEVEXOPMEOT (XRPORftTICMS
Basic Details
There are 11 U.D.C. in England and the main purpose is to
transforming their areas, making major ijTprovements to the
envirorment and infrastructure so as to open up development
opportunities. U.D.C.'s have powers to assemble reclaim
and dispose of land suitable for development and certain
pcwers to assist industry similar to the powers of local
authorities. Also the English Urban Development Corporation
have development control powers.
URBAN PROGRAt-ME
Basic Details
A wide variety of projects apply for grant through 57 local
authorities under the Urban programme. Each local authority
create it's strategy and try to give more grants in the areas
where the needs for investments are greatest.
Coverage
Approved Urban programme investments receive 75% grant and
25% borrowing afproval for capital projects and 75% for
revenue projects.
Administration
A total of 57 local authorities are able to help the investors
with all the information for the Urban Programme.
THE INNER URBAN AREAS (ACT 1978)
Basic Details
Under this scheme the 57 local authorities provide help to the
Inner Urban Areas.
Coverage
The Urban Prograiitne provide grants and loans for the establishment
of small industrial units and enterprise workshcp)S. In addition
cover the development and expansion costs of new existing small
business.
.SSISTED AREAS IN SCOTLAND
^
'
iSi*
@
developm ent AREAS
0
INTERMEDIATE AREAS
g
NON-ASSISTED AREAS
ENTERPRISE ZONES
A TAYSIDEDUNDEE AND ARBROATH
B
INVERGORDON
C
INVERCLYDE
D LANARKSHIRE
S C O T L A N D
INTRODUCTION
POPULATICX<:5 MILLION
ftREA:29.772 sq. miles
POLITIC3U:, SYSTEM:DEMOCRACY
N A T I C m L LANGUAGE tGAElIC-ENGLISH
CITHER LANGUAGES:FRENCH,GERMAN
CURRENCY:STERLING
EXCHANGE RATE:1 STERLING = 1 FUNT
ScxDtland which occupy the north part of the G.B. has
9 regicxis areas and 655 of the total population live
in a oentral belt covering the two main cities of
Glasgow and Ehdiburgh which is the capital of Scotland.
The north part of Scotland has some of the highest
mountains of G.B. and the middle and south are certain
the most of Scotland's Industry and agrioultural activities.
The assistance that offering to the investors can take
a variety of forms as follow:
a) State Grants
b) Regional Grants
STATE CKAffTS
RET.TCHAT. SKTJTTTVE ASSTSTANCT
Basic Details
Regional Selective Assistance is a discreticnary grant. Is available
throughout the Assistance Areas for investment projects creating
or safeguarding jobs. The amount of assistance could be between
10%-30% of the fixed project costs. Higher levels of grant are
available for the private sector of manufacturing industry and
service conpanies which serve wider are qualified for this grant.
Regional Selective assistance is an extremely flexible form of
assistance. Also the ccnpany can receive grant towards projects
using secondhand as well as new plant and buildings.
RE G I C m L t^TTERPRISE GRANTS
Basic Details
There are 2 types of assistance available under the Regional
Enterprise Grant:
- Investment Grant
- Innovation Grant
A) INVESTMENT GRANT
Basic Details
This grant is available for investments in Development Areas
and in the Fife Renaval Area by enterprises with fewer than
enplqyees.
Coverage
Manufacturing and some services sector are eligible to get the
Investment Grant. The amount of the assistance is 15% of the
costs of tte fixed assets up to a maximum £15,000. Also the
grant is discretiaiary and is available only once to each
applicant.
Β) ΙΝΝΟνΛΤΙΟί GRANT
Coverage
This grant is available for Innovaticri Developnent and Research
projects. A grant 50% of the costs up to a maximum of £25,000
offered to sole-traders, partnerships ocnpanies with fewer than
50 enployees, provided services in Assistance Area or in an
Urban Area in Scotland.
OOiSULTANCY SCHEME
Basic Details
Small and Medium firms with less than 500 enployees can
receive grant for cmsultancy.
Normally the scheme cover 50% of the costs for consultancyin the areas of design, marketing, quality, MIS, manufacturing
and service systems.
GRANT ASSISTANCE FOR EXCEPTIORAL PROJECTS (AEPl
Basic Details
The assistance for industrial investment normally is primarily
for the Assis-ted Areas but exceptionally, assistance required
to secure a project in another location except the Assistant
Areas, if the investment involve at least £0,5 million then the .
grant is available. Ccnpanies in most sectors of services,
manufacturing industry can receive the grant vhen the project
involve fixed capital expenditure.
Coverage
The principal eligible oos-ts are new fixed capital investments
in plant, machinery, buildings, working capital training costs.
The amount of the grant is negotia-ted and is subject to a
maximum of 25% of the project costs.
D) SCHEME TO SUPPORT INNOVATICTJ TM .9ΜΒΤ.Τ. (XMPANIES
1) SUPPCKT F m PR3DUCTS UNDER RESEARCH (SPUR)
Basic Details
SHJR is a schaie which help the small firms to develop new procSucts
and process viiich involve a significant technological advance. Coipanies
which enplcying fewer than 500 erployees are eligible to receive the
grant.
Coverage
The cost of the project must be at least £50,000 cn research
and develc^jnent and 30% grant is payable up to a maximum grant of
£150,000.
2) SMALL FIRMS MERIT AWARD PCe RESEARCH AND TECHNOLOGY (SMART)
Basic Details
SMART is a ccnpetiticn award and give finance assistance viable ideas
fncm small enterprises with less than 50 enployees or individuals ,viien
the idea is still in the first steps.
Coverage
Every award cover 75% of the cost for the first year νφ to £45,000.
The winners can win again grant of 50% of the second year up to a
maximum £60,000. Ideas can cover a whole range as information technology,
advanced materials technology,biotechnology etc .
All the applications and the proposals for the award must be applied
at the beginning of April.
EMPLOYMENT AND TRAINING GRANT
Basic Details
Many parts of Scotland offer training or enployment grants for
business, independent organisaticns and nationalised industries.
The ocrditions ard benefits of the programmes vary fran area to
area but generally pay 40%-60% approximately of cross wages
for a period of up to 6 norths. The jobs must be permanent under
18 months, have basic hours of between 21-45 hours per week
and the minimum wage of £3 per hour is paid.
GROUP MARKETING GRANT
Basic Etetails
The Group Marketing Grant was introduced in ;^3ril 92 to
enccurage the formation and development of ccrmerciallymanaged marketing groups for agriculture and horticulture
produce of ooc^seratives,public or private LTD ootpanies and
joint ventures.
Coverage
The assistame of the grant cover 50% of the managenent costs
and the maximum amount of grant is $107,000.
The main certain management costs are:
- Feasibility study(expenses-custcmers)
£10,000
- Member recruitment(prcmotioTal expenses)
£3,000
- Establishrent costs(lawyers-acoountant's expenses)
- Salary of k ^ staff(general manager-export manager)
£3,000
£30,000
- Training(of managers and directors to strengthen their business
planning and skills)
£2,000 each individual up to
£10,000 for all the group
Administration
The responsible body is the SOAFD and priority will be given to
the develc^inent of existing groups or new groups in regions
viere there is little collaborative structure.
LOAN GUARANTEE SCHEME
DOAN PCK SMALL BUSINESS
Basic Details
Small business with fewer than 200 enplcyees in manufacturing
construction retail etc. , qualify for the loan Guarantee
Scheme. The recreaticn services, travel agents, medical
services and seme other activities are exclude from the
Schane.
The government issues the lenders with guarantees for 70%
of the total loan. Loans can be for 2-7 years and the
3 cover an amount up to £100,000.
GRANT FOR PROCESSING fiND MRRKETING OF figUCULTORE
Basic Details
The aijTis of this grant are providing fran the European
Agriculture Guidance And Guarantee Fund. The main objective
is to inprove and raticnalise the processing and marketing
of agricultural produce.
The schene is coipetitive and there is no guarantee that all
eligible projects will get the grant.
The normal grant is 25% of the costs up to a maximum of
£900,000. The total cost may not be less than £70,000 ard
not more than £6,000,000.
Eligible projects are those vrfiich:
- improve marketing chanrel;
- improve product quality;
- rationalise or develop the preparation and processing
of agricultural products or re-cycling of waste and
by products;
-ajply new processing techniques(including new and
by-products, or to open up of new markets and
innovative i
Projects which are involve in the next areas are not
eligible for grant aid:
-working capital;
-second hand equipment;
-harvesting equipment;
-vehicles for external transportaticn
The inclusion of these items into the application form for
grant would not normally render all the project ineligible
but their costs would be deducted from the total cost of
the project. It may be also be noted that the value of these
items may not ocxistitute more than 40% of the cost. If the
value of these items is more than 40% then the project will
be ineligible.
FISH FRRMING SCHEME
Basic Details
The 1987 Schemes prcvic3es financial su^xirt- back-up grants of up to 10% for projects afproved by the E. community.
The anount of the grant vri.ll be not more than 10% of the
expenditure approved for Comiunity assistance. It is a
condition of the Scheme, that grant vriJ.1 be paid only
if an aEplication for Community assistance is successful.
Administration
The Scottish office Agriculture and Fisheries department
will provide all the information for this grant.
GRAhTT UNDER THE INDUSTRIAL DEVELOPMENT-ACT 1982-
Basic Details
The fish farmers, vho are understanding capital projects
which will create or secure long-term unaiployment can
get money from the Regicxial Selective Assistance Grant.
The grant, vhich is negotiable to the level, is usually
around 15%-20% of fixed capital costs. The Regional Selective
Assistance will not be given to projects being assisted by
the Highlands and Islands Enterprise.
ICCRTE IN SCPTLAND (LIS)
Basic Details
Locate in Scotland is the main organisation for a ttracting
foreign investments. Locate in Scotland provides a range of
services to financial assistance and advise in all the
questions relations to start up or expansion of business.
Many finanoe pacicages from the LIS, involving gove m n e n t
grant and E.C. loans. Also loans and equity finance is
available.
Locate in Scotland can provide a wide range of premises
and sites available for immediate occupation or tailormade to the conpanies.
NEW TOWNS AND LOCAL ADITORITIES
ipart the gove mnent assistance in Scotland, the local authorities
can provide many kind of assistance to the conpanies, vArLch
want to invest in the area of Scotland. Normally the offerings
are in the forms of rental ocrcessions.
Conpanies in manufacturing and service industries are eligible
to receive assistance for rental cmcessions and public
authority factories. Also the investors can benefit from
Begicnal Assistance Grant and other kind of government grants.
ENTERPRISE ZONES
Basic details
Enterprise zones, are areas in Scotland for encouraging private
secrtxr activity, viiich have renove the tax borders. There 4
Enterprise zones in Clydebank, Invergordon, Inverrclyde and
Tayside.
For a 10 year period the enterprise zones provide, for both
new and existing industrial and cccmiercial business:
-Sinplificaticxi of planning procedures;
-Rate free periods;
-100% capital allowances for new commercial and industrial
buildings for corporations and income tax:
-certain customs facilities
Conpanies in any sector of econcny, except the hazardous
activities, usually are qualified to cxocupy the Enterprise
zones.
SCOTTISH TOURISM BOARD
Basic Details
The Scottish Tcurism Board set up progranmes of financial
assistance for capital investment by ccnpanies which are
involved in tourism.
The projects must: involve capital expenditure, must be open
to the public and not be restricted to any particular
section of the canmunity, to provide facilities mainly for
visitors, the a£plicants must cwn the land or the building
or hold it cn a lease at least 7 years if the projects is
small and not less than 15 for the other cases.
The assistance take the forms of
participation revenue interest rate.
a
capital
grant,
loan,
equity
The normally amount is 25% or less but in seme cases assistance
can be up to 50% of the eligible capital costs.
HIGHLANDS AND ISLANDS ENTERPRI.SE ( HTE ^
Basic Details
The assistance for fish farming develcpment may be available
it the areas of Shetland, Orteney, Western Isles, Highlard
region, Argull and Bute district of Strathclyde, the isle
of Arran in CXmninghannB District of Cumbrae.
The Highland and Island Enterprise give financial assistance for:
- inprovements, expansion or re-stocking of existing farms;
- the establishment of new fish and shellfish farms for the
cultivation of fishes and other species.
The assistance of the HIE take the forms of grant and loan.
The grant is available to projects vAiich are of special
develcpment value. The amount of grant will not normally
exceed 30% of the cost of the project. Also interest
relief grant is available which in effect reduce the
cost of borrowing.
Loans are given for the new buildings, the expansion of
existing buildings, the purchase of plant and the equipment
and the provisicn of working capital. The loan can be cover
a period of up to 20 years at a favourable interest rate.
URBftN ΡΕνΕυΟΡΜΕΙΓΓ CORPORATICN f
U.D.C. )
Basic Details
The U.D.C. are transforming their areas, making major iirprovements
and infrastructure so as to c^jen up development opportunities.
U.D.C. in Scotland has the powers to assemble, reclaim and
dispose of land suitable for development and can provicte help
similar of local authorities
>
/
Wal es
/
/
CAR£>^^_
Λ
W A L E S
INTRODUCTION
POFULRTIWiS MILLICK
AREA:8.000 Sq miles
POLITIC3VL SYSTEM :Dn>10CRaCV
NaTIOIRL LANGUAGE:HELSH-ENGLISH
OTHEK IANGURGES:GEEMRN,E^EMCH
OJRRENCY: STEKLING
EXCHANGE RATE:1 STERLING = 0,98 PUNT
Wales which occupy the west part of the
has 8 counties ard the two third of the
live in the southeast.The north part is
with many rivers and lakes. The capital
and other arportant cities are Newport,
Wrexham and Aberystwyth.
G.B.
pcpulaticn
npuntainous
is Cardiff
Swansea,
The assistance to the ocnpanies vhich want to invest
in Wales is carrying out of the Public sector and tate
different kind of forms
PUBLIC SECTOR FINANCE
There are many grants vrfiich are under the public sector. The most
ijiportant are grants frcm the Vtelsh Office Grants, local Authorities,
Welsh Development Agency,Develc^ment Board of Rural Areas,Wales
Tcurism Board.
MELSi OFFICE GRANTS
A)
REGICTffiL SFT.FrTTVK ASSISTANCE
Basic Details
I M s grant is available for investment vArich take place in the
Assistance Areas. There are two main broad categories of the
qualified projects.
a) Projects vrfd.ch create enployment
b) Projects which safeguard the existing enplqyment without to create
new jobs
The grant is related to fixed and working capital cost of the project
and numbers of jobs involving. The grant is paid in three annual
instalments, with the first instalment paid when one third of the
jobs have been created. For small projects which are ccrpleted quickly,
the grant may be paid in one or two instalments.
Conditions
All the applicants frcm tie private sector of industry and ocmtnerce
are eligible to receive grants, the level of which is negotiable. The
service sector projects which serve only a local market do not
generally qualify for this type of assistance.
B)
REGIONAL ENTERPRISE GRANTS
1) INVESTMENT GRANT
Coverage
Firms in the Develcpment Areas with less than 25 enployees can apply
for Investment Grant vhich cover 15% of fixed assets( machinery,
buildings land and site preparation) up to a maximum £15,000.
Ccrtpanies in manufacturing and service sector are eligible to get
the Investment Grant.
2) INNOVATION CTiAOT
Coverage
Conpanies in Develcpment Areas with less than 25 employees can apply
for an Innovation Grant of up to 50% of the project ccst. The manu­
facturing and service cctipanies are eligible to receive the Grant
The conpanies cannot receive the REGIONAL SELECTIVE ASSISTANCE and the
REGIONAL ENTERPRISE GRANT for the same project.
C)
CONSULTANCY INITIATIVE
Basic details
thder this Grant, the Small and Medium sized enterprises with less
than 500 enployees can receive money for consultancy. The consultancy
can cover a whole range of activities -marketing, design, quality,
financial and management information systems etc.-.
Coverage
The amount that cover of the grant is 50% of the cost of the consultancy
projects.In the Assistance Areas two thirds of the costs wdLll be paid.
D) SCHEME TO SUPPORT INNOVATION TN SMAT.T. COMPANIES
1) SUPPORT FOR PRODUCTS UNDER RESEARCH (SPUR)
Basic Details
SPUR is a scheme which help the small firms to c3evelcp new prcxducts
and process vhich involve a significant technolcgical advance. Corpanies
which eiplcying fewer than 500 eirplcyees are eligible to receive the
grant.
Coverage
The cost of the project must be at least £50,000 co research
and development and 30% grant is payable up to a maximum grant of
£150,000.
2) SMALL FIRMS MERIT AWARD FOR RESEARCH AND TECHNOLOGY (SMART)
Basic Details
SMART is a cxmpetition award and give finance assistarce viable ideas
from small enterprises with less than 50 employees or individuals ,vhen
the idea is still in the first steps.
Coverage
Every award cxjver 75% of the cost for the first year up to £45,000.
The winners can win again grant of 50% of the seccnd year up to a
maxijTium £60,000. Ideas can cover a vAiole range as information technology,
advanced materials technology,biotechnology etc .
All the aEplications and the proposals for the award must be applied
at the beginning of April.
WAT.Fy; DT^VELOPMEm' AGENCY
A) ΕΟυΐΊΥ FUNDS
Basic Details
Unc3er this scheme the WDA can subscribe shares in the capital of
limited corpanies. The size of the investment vdJ.1 be between
£20,000 and £10,0000.
B) SUBSIDISED RURAL LOANS
Coverage
Small business with less than 20 skilled aiployees are eligible to
get loan up to a maximum £75,000. The interest rate is fixed and at
least 5% below the ccmmercial rates. The size of the loan is limited
to the number of jobs created.
Ccnditicns
All the manufacture and ccmmercial corpanies are eligible to get
loan except the agriculture, horticulture and retail abrades vhich
do not qualify.
C) SMAT.T. BUSINESS
INTEREST LOANS
Coverage
Corpanies which are located in rural Wales and want to create jcbs
can get loan up to a maximum £10,000. The loan is available to
assist with the purchase of buildings, plant and equipment. The
interest rate is fixed and normally is at least 5% below the
oonmercial rate.
D)
RURAL CONVERSION GRflNT
Basic Details
This grant provides finance assistance for converting redundant
buildings that are part of projects leading to jct> creation. The
light Industry corpanies ,craft and services,tourism develc^xnent
firms, leisure ard recreatiai enterprises are eligible to get the
grant.
Coverage
The grant cover up to 35% of eligible capital costs of ccnversion
work including professional fees and VAT. The minimum amount is £1,000
and the maximum eligible expenditure is £50,000.
Ε) DEVELOPMENT OF RURAL INITIATIVE AND EWTERPRISE ( DRIVE
Basic Details
DRIVE is a ccnpetitive grant for the private ocnpanies which are not
eligible for grants from other grant schemes. The investment can be
considered for this grant are:
- Services
- Tourism related projects
- Leisure and recreation
- Craft industry with less than 10 enployees
- Property development and inprovement
The agriculture, fishing and forestry investments are not eligible
to get the grant.
F) MFTCT TFCHNOLOGY GRgTTH FUND
Basic Details
Ccrpanies which are involve on new technology projects, coipanies with
an existing research development opportunity which it cannot finance
or joint venture projects to introduce new technology into Wales are
eligible to receive the help.
Coverage
The fund can provide loans up to £150,CXX3 per project. Finance from
private sector must raise at least the half of the total project cost.
T/emixytm bcard for rural kales
Basic Details
The development board is responsible for the economic and social
development of Mid Wales. The grants which are available from the
DEVELOPMENT BOARD FOR RURAL WALES are Mid Wales Development Grant,
Loan Finance, Rural Buildings Conversion Grant, Development of rural
initiative aid enterprise. Exhibition Support Scheme, "Made In Mid Wales"
Literature Support Scheme.
Ε) EXHXBmCW SUPPORT SCHEME
Basic Details
Under the scheme, manufacturing ccnpanies in Mid Wales and service
business in Mid Wales-vho provide service outside the area-can receive
finance assistance to attend trade promoticx»s and exhihitions as part
of their marketing and business plan.
Coverage
The scheme cover:
- Stand space. Shell scheme
- Hire of fitments
- Graphics
- Charges for electrical and water supplies
Hotel acccnmodation, meals, transportaticn, shipping costs, entertainment
are not covering fron the scheme.
The maximum amount of assistance is payable on the followirg scale:
- First time attendance at exhibition
60%
- Second time attendance at exhibiticn
40%
- Third time attendance at exhibition
20%
The grant vhich is available for assistance depend on the size of
the ccnpany:
SIZE( No of Persons)
1-2
£250
3-5
£500
6-10
£750
11-15
£1,000
16-20
21 +
£1,500
after ocnsultaticn
FRANCE
INTRODUCTION
POPUIATIOi :
56.5 Million
AREA :
551,602 square kilcretres
GOVERTMENT :
Democracy
NATIOiAL LANGUAGE :
French
OTHER LANGUAGES WIDELY SPOKEN : English, german and Spanish
CURRENCY :
French franc
EXCHANGE RATE (19/06/93)
FF 8.2 =
FF 6.6 =
GENERAL INPORMATICN :
France is divided in 22 regions and 96 departments. It has six major cities:
Paris, Lyon, Marseille, Bordeaux, Lille and Toulouse.
Paris and its surrounding area is the most densely populated part of the
country, with over 10 Million people.
Deep imbalances have arisen between the urban areas and the rural zcres. In
these rural zones, the depc^xilation and the slow down of the econonic activity
have caused major social prt±ilems. The government has taken steps to redress
the imbalances by redistributing power from the central government to the
regicsTal oouncils who will be better able to ccpe with rural issues.
CXJVERNMEOT INCENTIVES
The french government encourages the setting up of small business, by
providing incentives for its developnent, through public institutions spread
all over the country.
REEIONAL DEVEXOFWENT GRANT (prime a 1' amenagement du territoire):
This is a discretionary project-related grant vAiich is available
manufacturing and service industries, and research activities.
to
It takes into account the setting up projects, the take-over of firms in
difficulty, the extension projects and the internal oorversicn.
Eligibility
The following activities are eligible under this schene :
- manufacturing
- research and service ccnpanies (exclusively in some designated zones)
- agriculture and fishing involving food processing
For setting-up or taking-over projects, at least 20 j<±is have to be created
within the first three years (30 in the service sector); for the extension
projects, the j<±> target is to increase the existing workforce by at least 50%
The investment project must be worth over FF 20 Million or else it must be
undertaken by firms with an annual turnover of over FF 30 Million.
- FF 50,000 in maximum rate zones
In the case of manufacturing projects, the award ceilings are set as a
percentage of eligible investment undertaken :
- there is a maximum award of up to 17% of the eligible investment in standard
award zones.
- there is a maximum atvard of up to 25% of the eligible investment in the
maximum rate zones.
Expenditure on lard, site infrastructure, buildings, plant/machtnery, vehicles
ard working capital undertaken during the first three years in operation is
deemed to be eligible investment in the case of manufacturing projects.
The grant is paid in instalments; the first instalment equivalent to one third
of the total grant is paid v*en the investment programme ootmiences; the
remainder of the grant is paid in several instalments as the project
progresses towards oorpletion. The last instalment is generally paid within
3 years of ocmmenoement of the project.
To apply for t±>e regicnal develcpment grant :
There is no official form to ocnplete in order to apply for this grant;
however, aEplicants must disclose certain information :
- information relating to the ocnpany
- information oonceming the proposed project ie its goal, the nature of the
operation, planned investment, training requirements.
- the anticipated results
- financial plans
The body responsible for administrating this scheme is the D.A.T.A.R, a
government agency vAiich redistributes funds granted b y the ministry for
finance.
ΊΗΕ RERblDABLE ΙΛΑΝ FOR INNOVATIOI GRAOTED BY ΊΗΕ A.N.V.A.R (NATIONAL AGQJCY
FOR THE PROMOTICN OF RESEARCH)
The A.N.V.A.R promotes innovation and technical development. It
financial help for expenditure necessary to develop a new product or a new
process vdoich involves technological advancement.
The grant takes the form of a loan if the cperaticn is successful or it
remains a grant if the c^Deraticn fails.
The funds can be used to finance all stages of the product or process
development
that
are
new
or
innovative;
ocncepticn,
testing
and
experimentation, maJdng and fine-tuning models; establishing patents; market
researches; design; and standardization.
Tte A.N.V.A.R will financially aid the innovation projects of all ccnpanies
that are less than three years in existence, vhatever their sector of
activity.
The grant :
The grant may cover up to a maximum of 50% of total expenditure or legal
requiranents, marketing and technical consultancy, financial advice or any
personnel charges.
To apply for the refundable for innovation :
An applicatiori must be made directly to the A.N.V.A.R
EMPLOYMENT INCENTIVES
Exatption on social charges for the first employee taken on
This schene is available to any self enployed person wishing to take on an
enployee.
Eligibility :
The enployer must not have enployed anycee for the last 12 months. However it
is permissible for the enployer to have used the help of his/her spouse; or
a person fiscally at his/her charge; or the caretaker of a premises; and still
be eligible under this schene.
In the case of a farmer, the use of family or personal assistance will not
him/her ineligible for this exenption.
The exenpticn :
A 100% exetipticn from the erployer's contribution to social security lasting
for two years fron the date on which the first enployee was taken on.
To apply for this exenption :
Two applications must be made within 15 days of ocnmencement of employment of
the first enployee :
- one must be sent to the local authority for employment and training
- the other must be sent to the U.R.S.S.A.F
Exemption from social security oontributicns for second and third employee
This scheme is designed specifically for rural areas facing difficult economic
conditions. It should encourage entrepreneurs involved in small craft
industries to take on second and third enployees.
Eligibility
At the date of the commencement of eiiployment, the enplqyer must have been
operating for the past 12 months with at the nost one or two wage-earners.
He can therefore benefit successively from the exenpticns relating to the
taking on of a first, a seccrd and a third enployee.
The enployment must last for an unspecified period of time.
The enployer must declare the taking on of those new enployees within 30 days.
The exenption :
A total exenption from employer's oontributions to social security lasting for
12 months from the date of enployment.
To apply for this exenption :
An application must be made to the local authority for enployment and training
or to the U.R.S.S.A.F
RESEARCH AND DEVELOPMENT GRANT FOR FOREIGN INVESTORS
The government has established a specific programme providing grants to assist
foreign investors to set up their research and develcpment centres in franee.
Eligibility
The reseaooh and develcpment investment must deal with engineering, management
or software operations and must be located in centres outside the Paris area.
The investnent must result in the creation of a minimum of 30 jobs over a
three year period.
To qualify,
Million.
the investor has to have a worldwic3e turnover of over FF300
The grant available ;
For each job created, a grant of FF35,000 is given (FF50,000 in urban areas).
JVOCXXIOTING CEIirKES (Centres de gestion agrees)
The accounting centres provide sufpDrt and assistance to businesses.
Accounting assistance
With regard to a ocnpany's accounts, the accounting centre vdJJ. assess and
comient on the ccmpany's eccroruLc and financial situaticn. It vd.ll also fron
the second year onward, oonpare and analyze a conpany's annual balance-sheets
and income statements.
The accounting centre can also assist and advise a conpany on coipletion of
its annual tax return.
For further information regarding the accounting centres contact the french
ministry for finance.
ASSISTANCE TO REGISTERED JOB SEEKERS AND TO YOUNG ENTREPRENEURS
- Incentives for the unetiployed : tax relief and grants
The government vdLshes to encourage unenployed persons setting up in business
or taking over cotpanies.
Eligibility
The unenployed person must be receiving unenploynient benefits at the time of
the creation or take orver of a oonpany.
The oonpany involved must be in the industrial, agricultural, commercial or
craft businesses.
The unenployed person must have control of the oonpany (ie if it is a
corporation, they must own at least 50% of the share capital).
The grant ;
The unenployed person creating a business gets :
- an exemption on social security ccntributicns for the first six months
- a grant the value of vhich varies between FF 16,168 and FF 43,000, depending
on the length of time the unenployed person has been receiving unemployment
assistance.
The grant can be increased by between FF 8,084 and FF 21,500 if there are
jc±is Created vd-thin the first six months of the firm's
To apply fear the grant
The application must he made to the local authority responsible for employment
and training before the project starts.
- Depaurtmental initiative grants for young people (F.D.I.J)
This scheme offers the young or long-term unenployed finance and funding for
any initiative that may lead to setting up or taking over a ocnpany.
Eligibility :
The categories of persons eligible :
- the young, unenployed, from 18 to 25 (included)
- the long-term unenploied
- women over 25 years old, unenployed and in difficult circumstances.
The project can give rise to either the setting up or take over of a ccnpany
but it must result in a viable business.
The applicant must own at least 50% of the share capital in the business.
The grant
The grant will cover feasibility studies, the purchase of equipment, working
capital,etc all the expenditure that is necessary to start a business.
The value of the grant varies between FF 10,000 and FF 100,000. The state
grant is limited to 50% of the total cost of the project.
To apply for the grant :
An applicaticn must be made to the local authority responsible for enployment
and training or to the prefecture, before the project ccmmences.
- Advice cheques :
Advice cheques may be offered to job seekers creating their own business or
to beneficiaries of the F.D.I.J schene.
It is an incentive for those starting up in business to make use of third
party advices (legal, marketing or financial ccnsultancy) during their first
year in operation.
The cheques are
organizations.
used
for
consultancy
given
by
officially
recognized
The grant :
The applicant is given a cheque book ocnsisting of 15 cheques of FF 300 each.
The cost of cne hour of consultancy is fixed at FF 400; therefore, the
beneficiary will have to finance one quarter of the cost of the ocnsultancy.
The cteque book must be used within 18 months.
To apply for the grant :
An application must be made to the local authority for employment
training.
and
A GUARANTEE FUND FOR WOMEN
A guarantee fund is available for wcmen to allow them secure loans more
easily. This guarantee fund covers loans to wcmen for the purpose of creating,
taking over, or expandirg business.
The guarantee covers loans used to finance investment projects or to provide
working capital.
The guarantee
The guarantee issued may not cover the entire loan.
In the case of loans for working capital (up to FF 50,CXX)) : the state covers
65% of the loan.
In the case of loans for investment (up to FF 50,OCXD) : the state covers 50%
To afply for the guarantee
An application must be made to the division for women's rights in the
prefecture of the particular region in viiich the applicant resides.
INCENTIVES FOR CRAFT ACTIVITIES
- SUBSIDIZED-LOAN FOR CRAFT BUSINESSES
Eligibility
This loan is available for people setting up a craft business or for existing
craft businesses seeking finance for investment.
The loan must be used for :
- the purchase or building of premises
- the fitting and adaptation of premises
- the purchase of professional equipment
- the purchase of professicnal vehicles
- the purchase of stocks
and possibly to cover working capital requirements.
The loan
The loan covers 80% to 1(X)% of total investment. Its duration from 2 to 15
years is dependent cn the depreciation period of the goods financed.
There is no maximum ceiling set for investment
The average rate is 10.50% (it varies between 10.40% and 10.60%)
An applicaticn for the loan can be made at any bank
- OTHER LOANS AVAILABLE FOR CRAFT ACTIVITIES
Loans are available for craftsmen who wish to create their own business or to
existing craft oonpanies setting out to develop and create new jobs.
Eligibility
The new entrepreneurs must have either :
- passed the C.A.P (ie certificate of vocaticnal education) and worked for two
years, or
- worked for 6 years in their craft activity.
This programme is directed to craftsnEn/watien under 35 years of age.
The loan is available for:
- the purchase or building of premises
- the installaticn and fitting of premises
- the purchase of professional equipment and vehicles
- the purchase of stocks
and possibly for covering working capital requirements.
The loan :
The loan covers 80% of total investment.
Its duration is from 2 to 15 years depending m
goods purchased.
the depreciation period of the
It has a maximum ceiling of :
- FF 200,000 for the creation of the ocnpariy
- FF 100,000 for job creaticn (up to FF 500,000)
The average interest rate paid on this loan is 9.25% (it varies between 9.15%
and 9.35%).
The application for the loan can be made at any bank.
TRAINING OCKTRACTS FOR OiAFT PEOPLE
The aim of this scheme is to give people setting up craft businesses an
opportunity to gain qualifications.
Eligibility :
Young people between the ages of 18 and 25 as well as the unarployed people
receiving unenployment benefits are eligible for this schane provided they
have minimum qualificaticis in the craft field.
The training must not exceed 1000 hours; it must include training as a
director of a craft corpany aooounting for 200 hours, a ccnplementary
education and technical training. The trainee must commit himself/herself to
setting up or taking on a craft business within 6 months of cctipletion of the
training.
The grant :
The state will pay the wages and the social security contributions of the
trainees as well as the cost of the ccnplementary education.
It) apply for inclusion in this scheme, contact the prefecture, the local
authority for etiployment and training, the (chamber of (commerce or the national
agency for enployment (A.N.P.E).
TOE FRElOi TRADE BOARD (CH^TRE FRANCAIS DU COMMERCE
EXTERIEUR : C.F.C.E)
C-F.C.E is a public body which deals with ccmnnercial and industrial
activities that are export orientated.
The objective of the french trade board is to support, advise and inforni
exporting companies.
The board provides an entrepreneur willing to enter an export market with :
1/ infonnation
- statistical, economic and caimercial information relating to the export
markets
- information on trade regulations in france and elsewhere
- the legal and oommercial information necessary to set up a cotipany abroad
- informatics on overseas business opportunities.
2/ advices and hpTp for prospecting
- individual assistance : it finds out vhat markets represent the best
opportunities for each busiress, it researches the available information, it
cietermines the necessary marketing steps.
- the C.F.C.E cerries out feasibility studies for businesses and enterprises
- it advises corpanies can methods of financing projects and cn the technic of
camercializaticn.
3/ promoticns
- The C.F.C.E prepares canvassing missions overseas.
- It organizes exhibitions and trade-fairs abroad
- It pronotes french trade shcxvs
TOE FRENCH INSURANCE OCMPANY FOR FOREIGN TRADE
commerce exterieur : COFACE) :
(Compagnie
francaise du
This is a state corpany vhose aim is insure foreign trade cperaticans.
Firstly, OOFACE acrts like a regular insurarxe conpany insuring
transactions of exporters of cxnsumers gcxxds or industrial produots.
the
It also grants insurance against specific risks :
- refundable advances for prospecrting
They guarantee the exporter against the failure
promotions carried out abroad.
(relative or total) of
- insurance against the cxnmercial risk of non-payment
- insurance against the political risks (war, revolution, turmoil)
- insurance for the manufacturing period
RBGIOCU. INCOTTIVES
ΊΗΕ R E GIO®L EMPLOYMENT GRAOT
Itiis is a grant given to snail ocnpanies with respect to the first 30 jobs
they create. The jobs must be permanent and maintained for at least two years.
Elligibility
This grant is available to ccmpanies involved in industry,
industry, agriculture, scientific and technical research.
services to
The grant is available for :
- creating a ocnpany
- expanding an existing cctipany
The grant
The value of the grant varies between FF10,000 and FF40,000 per job created.
To apply for the grant
An application must be made to the regional council.
THE REX3I0NAL GRANT FOR THE CREATION OF INDUSTRIAL AND COMMERCIAL ENTERPRISES
Entrepreneurs who set up new busiresses are entitled to receive a grant
between FF 50,000 (if they create at least three jobs within three years) and
FF 200,000 (if t h ^ take on at least ten enployees within three years).
The conditions to fulfil in order to benefit from this grant are decided by
each regional council.
THE REGIOfflL GRANT FOR CONSULTANCY ASSISTANCE :
This scheme is financed by both the regions and the central govemnent. Its
aim is to encourage the local small and medium-sized ccmpanies to use the
services of third party consultants for developnent purpose.
Tte grant is available for provisicns of services that will help modernise a
business and inprove its ccnpetitiveness in the follcwing fields :
- marketing
- quality control
- product design
- production
- business strategy : plans for development, merging, etc
Eligibility
Id be eligible, coipanies must be involved in one of the following activities
: industry, services to industry, the building trade, craft activities,
transport or tourism.
They must have a sound financial basis and they must enplcy less than 500
pecple.
The grants
Grants can be offered for two kinds of studies :
- a short-term study (estimated to cost below FF 30,000 after tax); this
is subsidised by between 50% and 80%, deperding on the region; the m a x i m m
amount attainable varies between FF 15,000 and FF 25,000.
- long-term studies (estimated to cost more than FF 30,000) get a 50%
subsidy, up to a maximum amount of FF 2CX),000 (FF 50,000 for craft activities
and tourism).
To apply for this grant
An aEplication must be made to the regicaial council j
ooftpany is operating.
the area vhere the
PROFESSIOffiL TRAINING GRANTS
The state and/or the regions sign training agreements with ccnpanies for
developing vocaticrial training programmes. The aim is to provide firms with
public assistance for professional training.
Eligibility
The cxitpany applying fir this grant must enploy more than 10 people.
Grants are available for :
- voc;ational training related to the development of the firm's activity
- ccnpanies that increase significantly their training expenditure above the
legal minimum
- training projects that meet the priorities fixed by the state and the region
( technological or organisational changes, export, inprovement of enplcyees'
qualifio:ation levels)
The grant
The state will (cover 10% to 70% of the training expenditure (possibly
including transport and acoonmodaticn (costs) depending on the priorities met
by the training project.
30% to 50% of the amount granted is given when the training agreement is
signed.
The individual region o^n share the (cost of the training agreement with the
state. The amount of the grant can vary again 30% to 50% of the total grant
is paid vhen the training (ccntracct is signed.
TAX ALLOWANCES
FISCAL MEASURES FAVOURING NEW COMPANIES :
1- EXEMPTICN ETiOM TAX CN ANNUAL PROFIT
Cotipanies can get an exaiption fron tax cn their annual profit if their
txisiness has been created since Octcber 1988; the exenpticn covers the first
five years of the business activity.
Eligibility
Certain conditions must be met in order to secure that tax relief :
- the oaipany must be involved in industrial, camer c i a l or craft-based
industries
- the corpany's activity must be newly created; enterprises created merely
through restructuring or expansion are excluded from this schaie.
- if it is a corporation, 50% or more of the share capital must be owned by
the ccnpany
The exemption
Total exoneration fron inoone tax or corporate tax for the first 23 months of
the oarpany's existence.
For the next three years 75%, 50% and 25% of profits respectively are exenpted
from tax.
To apply for this exenption :
An application must be made to the local taxation centre.
2- LOCAL BUSINESS TAX CONCESSION
Ccnpanies may take advantage of a local business tax concession for the first
three years of their existence.
To obtain this relief :
- the local administrative units must have decided to offer this ooncessicn
to the business before the 1st of July in the year in which the ccnpany was
created
- the ccnpany must be eligible for tax relief on its annual profits.
In the first year the (ccnpany is exenpt from the local business tax unless it
has taken over another cxnpany and it is using the same method of prcducrticn
as its predecessor.
For the next two years the (ccnpany will be taxable (cn a basis equal to the sum
of :
- the rental value of the fixed assets it had cn the 31st of December of the
first year of activity,
- the taxable part of the wages or returns cn the same date (31/12/year 1).
For the second year of operation, the taxable basis is reduced by 50%
cnrBdits are given to firms who perform research activities in France
either directly or through government-approved entities.
The cpjalifying expenditures are :
- the depreciation of assets used for research activities
- wages and charges related for the staff enplqyed for use in research
- other expenses (vhich together do not exceed 75% of staff wages and related
The only expenditures eligible are those made exclusively for the purpose of
scientific and technical researches in franoe.
The tax credit:
This tax credit cannot however exceed FF 5 Millicxi per year (FF 10 Million if
the firm uses external institutions or experts to carry out the research).
In the following years, the 50% credit will not apply to the vhole amount of
the research expenditures. For the year N, the credit will only be calculated
against the surplus in relation to the average amount of the two pccevious
years : N-1, N-2
The applicant must apply for the tax credit within the year of the firm's
existence or the first year of the research project.
4-
R EDUCnCN IN PROPERTY/LftND TftX
It is possible to obtain a reduction in the amount of prcperty/land tax
payable; this affects the amount of duties that must be paid when the lard
changes hands. The value of the reduction obtained varies in the different
regions.
5-
TRX INCENTIViS SPECIFIC TO ENTERPRISE Z i M S
Three enterprise zores exist in france, in DUNKERQUE, T0UIO4-LA SEYNE and
AUBAl3iE-IA CIOTAT.
If a firm is operating in one of these regions it is eligible for an exemption
from corporate tax for the first ten years of existence.
Firms must be employing at least 10 persons after 2 years in order to qualify
for this exemption.
Companies producing certain products such as steel, synthetic fibres, ships
or carrying out activities such as distribution, banking or insurance, are
ineligible for this exemption.
This tax ooncessicn can be combined with a local business tax ocooession and
a reduction in property transfer/land tax.
6-
TAX CREDITS FOR PROFESSICNAL EDUCATI(»i
Fncm 1991 to 1993, cxarpanies increasing their professional education expenses
can get a tax credit for 25% of these additional expenses incurred over the
preceding year.
This tax credit is limited to FFl Milliai.
The tax credit vd.ll rise to 40% if expenses on professional education benefit
- enployees over the age of 45
- enployees in a ocnpany eirploying less than 50 people
- less skilled vrorkers.
In those cases, the tax credit ceiling is raised to FF 5 Million.
REGIONAL MAP OF SPAIN
-
SFRIH
INTRCOJCriCN:
Population:
39 millions.
Demography Density:
77 hab./Km2
Area:
505,958 Km2
Govenment:
Parliamentary Monarc±iy
National language:
Spanish
CXtcrency:
Exchange Rate:
Principal Towns:
Madrid
Barcelcna
Valencia
Sevilla
Zaragoza
Malaga
Bilbao
(3
(1,7
(0,8
(0,7
millicxi
millicn
million
millicxi
{0,6 million
(0,5 million
(0,4 million
hab.) The Capital
hab.)
hab.)
hab.)
hab.)
hab.)
hab.)
For administrative purpose, Spain is divided into 17 Autoncnous Communities,
each of virLch contains one or more provinces; the total number of provinces
is 50.
The investment incentives can be classified in the following categories:
- A.\ General state incentives
- B.\ State incentives for specific industries
- C.\ Regional incentives
- D.\ BC incentives
GENERZiL STATE INCENTIVES
Training incentives
EinDlovnient incentives:
-
Teinporaxy contracts.
Practice contracts.
Training contracts.
Contracts for persons over age 45.
Contracts for persons under age 26.
- The reduction or ooiplete exenption of social security
costs for newly hired enplqyees and for retirements.
- Subsidies, payment of training expenses , of certain
percentages of salaries, of certain amounts per hour or day,
etc.
- Assistance to and training of enployees
Administration:
- The National Eiiployment Institute (INEM).
STATE ΙΝΟΕΪΠΤνΕΕ FOR SPECIFIC INDUSTRIES
Agriculture and araftwc»ri<:
Aids are provided for technical assistance and managenient plans. These
aids consist basically of financial support (subsidies up to 30% of the cost
of the investtnent and official credit up to 70% of the cost of the investment.
These incentives are to inprove the structures of prcducticn, transfonnaticn
end conmercialization of their products.
Sipport for hydroelectric pcwer generaticn,
alternative energy sources and energy conservation.
for
investment
in
Incentives: - Subsidies for up to 40% of the cost of the project,
preferential access to official credit, no-charge advice and reduction
/exenption in certain taxes.
Research and develocment:
The aids in this field are intended to encourage modernization and
technological innovaticn programs, basic and applied research and industrial
design, enployee R+D training, contacting of services rendered
R+D centres
and institutes, and projects involving technological risk.
Incentives: - Subsidies for up to 70% of the cost of the projects.
- Low-interest or interest-free loans.
J access to preferential
There are measures to promote design and fashion , ccmnnercial
distribution, support for small business, aids to multination^ promotion,
environmental ijTprovements, etc.
All the inoentives mentioned in this section are usually provided by the
different Ministries and by the official banks.
REGICNAL INCENTIVES
Fcxir classes of area have been defined:
- Class I areac;, vAiere the maxijTium rate of award can be up to 75%.
- Class II areac; with a 40% limit.
- Class III area.q with a 30% limit.
- Class IV area·:! with a 20% limit.
Three types of pronotable zones have been defined accordirg to their specific
circumstances:
- ZPE, Boonanic Prcmoticn Areas.
ZPEs could only be established in types 1,11 and III.
“ ZIP. Industrial Areas in Declir^.
Special Areas.
ZEs could only be established in a-npa iv.
ZIP
Asturias
Cantabria
Extremadura
ZPE
Andalucia
Aragon
Asturias
Canary Island
Cantabria
Castilla-La Mancha
Castilla-Peon
Ceuta
Extremadura
Galicia
Melilla
Murcia
Valencia
1.-Types of projects Qualifying for promotion:
- Opening of new establishnents, vhich must create new jobs.
- Extension of existing activities or start-up of new activities. New
jobs must be created, with a significant increase in prodixrtion capacity.
-Modernization of the business.
2.
-Project requisites:
- The project has to be related to an eligible activity and be located
in one of the designated areas.
- Setting-up and extension projects must involve investment in fixed
assets exceeding 15 million pts. (140,000 U.S.dollars) and job creation.
Modernisation projects require investment exceeding 45 million
pts.(450,000 U.S.dollars).
- At least 30% of fixed investment should be finance from the own funds
of the f i m but in areas with ceilings of rate award of 75%, such as
Ferrol and South of Extremadura, this is lowered to 25%.
3.
-Investments qualifying for promotion
- Acquisition of the land necessary to implement the project.
- Installation of services (gas, electricity,etc.)
- Pevelcpment and external work relating to the needs of the project.
- Civil engineering vrark for offices, laboratories, warehouses, etc.
- cap-ital equipment and other fixed assets.
- Planning and engineering of the project.
- R+P and training expenses for up to 20%(ZPEs) or 30%(ZIPs) of the
total approved investment.
4.-Scales to determine the amount to be subsidized
The percentage of subsicSy to be granted is set by the Administration applying
the following valuation criteria:
-Location
-Total amount of the accepted
-Number of new jobs created
-Type of project
-Use of production factors in the area
-Value added where the project is a start-up or increase in productivity
for other types of projects.
-Use of advanced technology.
-Degree of development added to the area's econaiy.
The effective percentages of subsidy range mostly between 15-25%.
Administration:
The "Ministerio de B c o n n i a y Hacienda"
(Ministry of Econcny and Finance).
AIDS GRANTED BY AUTOgCMDUS 0CM4UNITIES, MUNICIPALITIES AND CITY
COUNCILS
All the Spanish Autonomous Communities provide similar incentives, on a
smaller soale, for investments made in their regions. Many of these are
oaipatible with the EE and State incentives, but some others are not.
1.-Types of projects
Opening of new establishments, expansion of activities, modernization and
technological innovation. The creation of new jobs is normally required.
2.-Types of incentives
-Nonrepayable subsidies.
-Special conditions for loans and credits
-Technical advice and training courses
3.-Investments qualifying for promotion
-R+D and training expenses
-Capital equipment and other fixed assets
-Plannirg and engineering projects
-Acquisition of real estate necessary to inplement the pjroject.
B/European Coal and Steel Ccnriunitv
Projects qualifying for BCSC loans are:
a/Industrial Loans:
Protected investments in coal or steel enterprises for the purpose of
rationalizing proluction and tailoring it to demand.
Projects contributing to production improvements or reducing production
costs, or to facilitating the marketing of ooal ard steel.
b/For reconversion loans:
C3ualifying investments are those that give rise to realistic
expectations of enplciyment in areas affected
the crisis in coal and
steel activities for workers in this industry.
c/For social loans
Qualifying projects are those that aim to improve the housing conditions
of workers in the industry.
The terms on vrfiich the loans are provided are in principle the sane as
the general terms described earlier, with the following differenoes:
- For industrial and reocnversicn loans;
+interest rate
relief of 2% or 3% points is granted in some
cases, and grace periods of up to 8 years are provided.
- For social loans:
+Interest rate 2%
+Term 20 to 25 years.
ftdministration:
- ECSC if tie investment is over ECUS 15,000,000.
- Industrial Credit Bank (intermediary), is under that amount.
C/Eurooean Social Fund
There is preferential access to financing for projects favouring persons under
age 25 and for those over 25 who are long-term unenplcyed, disabled workers
and emigrants, and for projects in high-priority areas.
High-priority areas in Spain are:
Andalucia, the Canary Island, Castilla-Ieon, Castilla la Mancha, Ceuta,
Extremadura, Galicia, Melilla, Murcia, Asturias and Valencia.
Incentives:
Administration:
The maximum limit of the aids is 75% of the project cost,
the effective aids are normally for up to 30%.
Autononous Ccmmunities
Provincial Office of the Ministry of labour.
D/Research and Develocment
Basic Details:
- The involvement of at least two participants from diferent
Member States.
- The participation of a small or medium sized enterprise.
- One of the participants must be an industrial enterprise.
- The project must be of scientific interest.
Incentives:
50% of the project cost.
This amount may vary depending on the features of each
particular case.
Adninistration:
Commission of the European Ccmmunities (Directorate
Science, Research and Develcpment).
for
E/Euiopean Ajricultural Guidance and Guarantee Fund
For inprovii^
products.
The Fund also
and marketing
conditions
of
farm and
fishery
indirect actions though BC Member States.
Incentives: -Subsidies are provided for the cost of equipment to be used to
rationalize storage and processing of farm prxDducts, to irrprove
marketing channels, to save energy, etc.
-Subsidies range from 25% to 75% of the cost of equipment.
-Castilla- la Mancha, Castilla-Lecn, The Canary Island, Galicia,
Asturias, Andalucia, Murcia, Valencia, Ceuta, Nfelilla ard
Extremadura have been identified for aids of up to 75% (37.5% from
EC and 37.5% from the Spanish State) and Madrid, Barcelona and
Vizcaya for aid of up to 50%.
Administration:
Autonomous Community.
The ERDF promotes regional acticars that contribute to the develc^iTient of the
industrial infrastructure of the EEC.
Incentives: a.- Subsidies normally for between 15% and 30% of the amount of
the investment(The maximum limit is 75%)
b.
- Preferential aooess to official credit.
c.
- Tax benefits.
MEZ)SURES IN THE LABOUR MARKET
Temporary Contracts
The entrepreneur will receive a grant of 250,000 Pts,
temporary contracts to permanent contracts.
if he changes the
Economic Iiacentives for Permanent Contracts:
1.
- 400,000 Pts grant if the firm contracts a person under 25 years and
this person has been registered in the INEM (Social Wealthfare Office),
at least one Year.
2.
- 500,000 Pts grant, and 50% of tax reduce in the social wealthfare
during all the life of the contract. If the firm contracts a perscxi over
45 years registered as unenployment at least one year.
3.
- 500,000 Pts of grant if the firm contracts women in professions
vhere the women are not very integrated.
4.
-550,000 Pts of grant, if the employer changes the trainee-contract
to permanent oontract.
CONCLDSION
In the previou s p a g e s an a t t e m p t h a s b e e n m a d e
vestment
incentives,that Greece,the
U.K.,France
to descr i b e
the i n ­
a n d S p a i n o f f e r to t h e
p o t e n t i a l i n v e s t o r s . l t c a n be s e e n f r o m t he a n a l y s e , t h a t t h e r e
v a r i e t y of simila r a n d m a n y d i f f e r e n t i n c e n t i v e s ,a m o n g t h e
a wide
countries
of E.C.
H a v i n g c o m pare d a p o o r c o u n t r y
s u c h as G r e e c e w i t h a r i c h c o u n t r y
s u c h as Fr a n c e and S p a i n , s o m e i n t e r e s t i n g p o i n t s
F i r s t of a l l,t h e d i f f e r e n t w a y t h a t G r e e c e
tial investors through a central
c a m e out.
tries
system without
the
to a t tract p o t e n ­
local communities
h a v i n g a n y say in it.
S e c o n d in the U.K.
a n d S p a i n t h e o n l y i n c e n t i v e is i n t h e f o r m of
a c a p i t a l grant.
In F r a n c e and G r e e c e
ta^ relief
is a l s o a v a i l a b l e h o w e v e r G r e e c e
has a u n i q u e i n c e n t i v e in. r e l a t i o n t o the IRS a n d
in France there
is
a n i n c e n t i v e in r e l a t i o n to the LRS.
In th e U . K . ,i n v e s t m e n t m u s t c r e a t e
new
jobs o r
safeguard existing
ones.
In G r e e c e the p r o j e c t s m u s t i n v o l v e n e w i n v e s t m e n t , t h e
establish­
m e n t or m o d e r n i s a t i o n of e x i s t i n g c o m p a n i e s .
In F r a n c e a m i n i m u m l imit of 20
Finally
jobs m u s t b e
new b u s i n e s s e s in S p a i n , w h i c h c r e a t e
created.
new
jobs
s a t i o n or r e l o c a t i o n of e x i s t i n g b u s i n e s s e s a re e l i g i b l e
and m o d e r n i ­
to r e c e i v e
the i n c entives.
In t h e
future a u n i f i e d E u r o p e w i t h a l l t he c o u n t r i e s
lev e l is the best w a y f or E u r o p e t o a t t r a c t m o r e
c o m p e t i t i v e agai n s t J a p a n and USA.
on the
investors
same
and to be
Activity Coverage
EUGIBLE SECTORS
AFF EXT MAN CON UT
COUNTRY
INCENTIVE
GREECF.
IG.IRS,
IDA. TA
X(9)
RSA
X(20) X(20) V
REG
X
X
V ->"'X
X
P.AT
X (l)
X(4)
i/(5)
X
LBTC
X
X
\'(5) -X(3) X
RIG
ΧΠ)
\'
V
UNTIED KINGDOM
(a) GREAT
BRITAIN
FRANCE
SP.Al.N
X
i/OO) ΧΠ1) Vtl2)
XC20) X(20)
X(6)
X
.ΧΠ6)
EUGIBLE SERVICES
Tourism and ' certain tourism
.support services plus c e n B « 'of
technical assistance to manufacNo SIC Orders are explicitly
excluded. However, purely local,
consumer-type services would
not be eligible.
Service seaor prqecti which
serve only a local market are not :
normally eligible for an invest­
ment grant, though they m ay
quadify for an innovation grant
Research companies and certain
te r ti^ sea o r activides are eligible;'iri certain designated zones
Hncluding service, administra­
tion, management, engineering,
design, survey and data process­
ing aaivities).
Services are eligible which are
not dependent on local markets.
Tourism, indastrial serxices and
services which improve the
commercial structure' are eligi­
ble.
Aote'.
(11 Certain agriculfjral aaivities with industrial charaaeristics are eligible (see individual countrv' surveys for
(3> Tile manufacturing of pre-fabricated units for the construaion industry Ls eligihle.
(4)
Extractive industries may be eligible if the regional importance of the projea i-: 'undeniable', but in prac­
tice very unlikely to receive aid.
(0)
Certain manufacairing aaivities are not eligihle; France - nationalised and seini-puhlic firms not operating
under conditions of competition; Italy - those excluded by the CIPl; Portug;i! - pnijects considered as
undergoing restracairing.
i6: Finns constniaing buildings for business use are eligible as long χ< the licnefiL' of the PAT schemes are
p;issed on to tile user of die building.
!91 Mcxlem-technologx' famiing. stock-breeding and fishing concerns are eligible. Ni too. are industrial fann­
ing co-operatives investing in mechanical equipment.
'll! .A- well as .standard manufacturing aaivities, food proce.ssing. the publishing of daily newspapers and
wa,ste-processing actii ities are eligible.
' ; 1 Con.staiaion aa;\ ities by local authorities and co-operati\es oti industrial buildings in indirstrial or liandicr.ift zones: are eligible, as are coastnaction Finns niixiemising or replacing equi]5nient.
' ! 2 ' Kntetpri.ses pnxlucing energi' in the form of gas, hot water or steam are eligible as are enterprises
invoh ed in energy-.saving im e.stment, renewable enei®· sources and in die ret-\ cling of w-xste produas.
' ;6) .Not ineligible in theory, but rarely aided in practice, since utilities are gener.dk· provided by public
audiorities.
(20) Although no SIC Orders are explicidy excluded, awards are concentrated on the manufacturing secto ci
Distribution of Regional Incentives by Country and Incentive Type
INCENTIVE TYPE(1)
^HJNTRY
INCENTIVE
CG
JREECE
investment grant
interest rate subsidy
increased depreciation allowance
tax allowance
V
:a) GREAT
BRITAIN
regional selective assistance
regional enterprise grants(12)
V (ii)
>/
[TIANCE
regional policy grant (PAT)
local business tax concession
V(3)
IRS
TC
DA
LRS
V
V
X
V(6)
iNTTED KINGDOM
V(3)
■
.V
regional investment grant
SPAIN
(1)
Incentive-type abbreviations: CG - capital grant; IRS = interest-related subsidy: TC - tax cor.;®
Sion; DA - depreciation allowance; LRS = labour-related subsidy.
'
(3)
For manufacturing projects the PAT is generally an amount per job created up to a
expressed as a percentage of eligible investment. Given its investment-related ceiling, this c c ^
nent of the PAT scheme has been allocated to the ‘CG’ column in the table. For eligible non-rn
faauring projects (basically research and tertiar>' activities), the PAT is calculated as an a mount S
job created. This component of the PAT scheme has been allocated to the LR.S' column. The
AIIZR for small projects in rural areas takes the form of a capital grant.
(6) This is in terms ol a fixed percentage o f investment costs up to a maximum percentage of taxali
profits in any given year. As a result o f Law 1892/1990, the fiscal component of the Greek paclc^
has increa.sed in importance.
'
^
(ID
Regional .selective
exchange risk ολ ·ι
i.stance normally takes the form of a capital grant but i
ir European loans.
Degree of AdniLoistrative Discretion by Country and Incentive Type
INCENTIVE T YPE ( 1 ) (2 )
COUNTRY
INCENTIVE
GREECE
■ investment grant
interest rate subsidy
increased depreciation allowance
tax allowance
CG
IRS
TC
DA
LRS
ΑΛΧ5)
A/IX5)
A
A ,
UNITED KINGDOM
(a) GREAT
BRITAIN
regional .seleaive assistance
regional enterprise grants
D
A
FRANCE
regional pxjlicy grant (PAT)
local business tax concession
D ■
regional investment grant
1X9)
SPAIN
ni
,
d
;
A
uu ■ ■
r r > ranital erant- IRS - interest-related subsidy; TC - tax concesIncentive-rs'pe abbreviations: CO ” capital giaiu.,
,
T d a - Lpreciation allowance; LRS = labour-related subsidy,
ο Γ administrative discretion in award, rates
s^
(2)
A = linle or no
of discretion for large projecLs andbr cases o f speAD - basically automatic, but witn an eieiiiciu u.
dal regional importance.
(5)
Although rates of award are now fixed, there remains discretion in the decision whether or n ortimake an award
(9) Although basically oIm
ically by empluymeni
a proportion of the award b deiermined automat-
Projcct-iypc Coverage
OXINTKY
INCENTIVE
PROJECT-TYPE COVERAGE
SU/EX RR/M
SR
T
GREECE
IG, IRS, TA
V
VdO)
V d i)
X
Projects must involve new pro­
ductive investment for the p>urpose o f establishing, extending,
modernising or»relqpating uriits.
RSA
V
V(23)
V(4)
X(24)
REG
V(25)
X (25)
V(25)
X(25)
(a) Basic distinction is between
Category A (job creating) Snd
Category B (job maintaining)
prefects.
Eligible projea types are γκχ
specifically identified.
PAT
V
X(5)
^(4X6) V(7)
LBTC
V
X(5)
V(4X6) V(7)
RIG
V
V(22)
<
COMMENTS
UNITED KINGDOM
(a) GREAT
BRITAIN
FRANCE
SPAIN
X
At least 20 jobs (30 jobs for tertiary/research projects) must
normally be created.
A complex matrix of job and
investment conditions must be
SU/X should create new jote.
Modernisation and spatial relo­
cation should maintain current
employment levels.
Prvj..<:-TiJK· .Sbcm-Wlioiu^: SU-sclling up: EX-unlcnsion; RR-iationalisalion j.ul rcurgu.-ilciiion .
M-modcmtsaiion: SR-spaiial rclcxation; T-ukco\cr
(4) Only projects moving into the designated region are eligible.
(5) ‘Internal conversion' is eligible. This involves a significant change of product (or products) requir­
ing a major investment.
(6) In practice, spatial relocation is restricted to moves away from the Paris region. Such moves may be
eligible for additional .suppon (e.g. A ide a la Decentralisation).
(7) The establishment being taken over must be independent of the firm effeaing the takeover
nificant' number of jobs must be maintained and the takeover plan must be agreed to
’
(10) RR are eligible only to the extent that they are related to the application o f modem technology
(11) Enterprises moving to a worse-off region (or to a designated industrial estate) receive ^ rel^ aH ai
supplement under the IG/IRS schemes.
(22) Rationalisation and reorganisation are not eligible.
„
(2=)) Oteeorv' B projects must (a) safeguard a ‘substantial number of jobs; (b) involve some acuon »
^
orevent job loss (c) bring alxsut a fundamental rationalisation or modernisation outside the norm^
-•n of capital expenditure which, moreover, achieves a significant and identifiable improvement ifl
(2^) EUgfble if qualifying as a Category B project or, exceptionally, a rescue case.
,
(25) l l L u g h eligible project types are not si^cifically identified proposed p p e c ts are expected to be
^
viable L d to have a positive effect on sales, profits and employment levels.
MINISTRY OF NATIOIAL EX33NOMY
F0REIC3N C3iPITAL & ATTRACTING INVESlMEIiT
DIVISION
SYNTAGMA SQ.
10180 ATHENS
MINISTRY OF INDUSTRY, ENERGY £ TECHNOLOGY
MIHALAKOPOULOU 80
11528 ATHENS
AGRICULTURAL BANK OF GREECE
EL. VENIZELOU 23
10221 ATHENS
ETBA ( HELLENIC INDUSTRIAL DEVELOPMENT BANK )
87 SYNGROU AVE.
11745 ATHENS
EOT ( HELLENIC TOURISM ORGANISATION )
AMERIKIS 2B
10564 ATHENS
EOMMEK { HELLENIC SMALL-TO-MEDIUM MANUFACTURERS &
HANDICRAFT ORGANISATION )
XENIAS 15
11528 ATHENS
OAED ( MANPa’E R EMPLOYMENT ORGANISATION )
THRAKIS 8
17342 ATHENS
DEPARIMENT OF TRADE AND INDUSTRY
KINGSGATE HOUSE
66-74 VICTORIA STREET
L O ® O N SWIE 65W
BRITISH OVERSEAS
TRADE BOARD
1-19 VICTORIA STREET
LC»JDW SWIH OET
BARCLAYS BANK
BUSINESS SECTOR MARKETING DEPARTMENT
PO BOX 120
LCMJWOOD CLOSE
WESTWOOD HBINESS PARK
COVENTRY CV4 SON
SCOTTISH OFFICE
59 WATERLOO STREET
GLASGOW G2 7BT
LOCATE IN SCOTLAND
120 BOTHWELL STREET
GLASGOW G2 7JP
SCOTTISH Em?ERPRISE
120 BOTHWELL STREET
GLASGOW G2 7JP
HIGHLANDS & ISLANDS ENTERPRISE
BRIDGE HOUSE
20 BRIDGE STREET
INVERNESS IVl IQR
SCOTTISH TOURISM BOARD
FINANCIAL ASSISTANCE UNIT
23 RAVELSTON TERRACE
EDINBURGH EH4 3EU
WELSH DEVELOK-EWT AGENCY
PEARL HOUSE, GREYFRIARS ROAD
CARDIFF
SOUIH GLAMORGAN CFl 3XX
WELSH OFFICE
INDUSTRY DEPARTMENT
GROl^JN BUILDING
CA1HAYS PARK
CARDIFF CFl 3NG
DEVELOPMENT BOARD FOR RURAL WALES
25 MAEGWYN STREET
MACHYLLETH
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NORIH WALES TOURISM LTD.
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COLWYN BAY
CLVIW
URBAN DEVELOPMENT CORPORATION
CARDIFF BAY
BALTIC HOUSE
MOUNT STUART SQUARE
CARDIFF CFl 6DH
TARGED
NORTH WALES TRAINING & ENTERPRISE COUNCIL LTD
LTYS BRITANNIA
PARC MENAI
BANGOR
GWYNEDD LL57 4BN
D .R .T .A .R
1, AVENUE CHARLES EXOQUET
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A.N.V.A.R
43, RUE CALMARTIN
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MINISTERE DU TRAVAIL ET DE L'EMPLOI
(MINISTRY FOR EMPLOYMENT)
1, PLACE FCNTENOY
75007 PARIS
C .F .C .E
10, AVENUE D'lENA
75783 PARIS CEDEX 16
C.O.F.A.C.E
12, OOURS MICHELET
CEDEX 51
92065 PARIS-LA-DEFENSE
DIRECTIC»! GENERALE DES IMPOTS
DIRECTION DU TRESOR
139, RUE DE BERCY
75572 PARIS CEDEX 12
SPANISH INSTITUTE FOR
FOREIC3N TRADE
PASEO DE LA CASTELLANA 14
28046 MADRID
DIRECTORATE GENERAL OF
FOREIGN INVESTMENT
PASEO DE LA CASTELLANA 162
28046 MADRID
DIRECTORATE GENERAL OF
REGIONAL EOOJOMIC INVESIMENTS
PASEO DE LA CASTELLANA 146
28046 MADRID
SPANISH EMBASSY IN DUBLIN
17A MERLYN PARK 4
DUBLIN 4