Changes Regarding the Financial Grants to Medium-Sized Enterprises

The procedure for support for medium-sized enterprises for overcoming of the economic consequences of the COVID-19 pandemic, announced by the Managing Authority of Operational Programme Innovation and Competitiveness (OPIC), was published for a second public discussion. This is due to the substantial amendments made in the conditions for application after the initial consultations.

As of the date of publication of the present article, the procedure is yet to open for applications.

Below the main changes that have been made to the initially announced conditions for application shall be briefly reviewed. It is possible for new changes to be introduced until the opening of the procedure for applications.

1. Firstly, the total budget of the project has been increased from BGN 156 million to BGN 200 million (EUR 102.25 million) and the available budget shall be distributed amongst economic sectors as follows:

• Mining industry – BGN 1.4 million;
• Manufacturing industry – BGN 72.5 million;
• Production and distribution of electricity and heat and gaseous fuels - BGN 1.1 million;
• Water supply; sewerage services, waste management and recovery - BGN 2.8 million;
• Construction - BGN 21.3 million;
• Trade; repair of motor vehicles and motorcycles - BGN 34.6 million;
• Transport, warehousing and post offices - BGN 11.4 million;
• Hotels and restaurants - BGN 13.5 million;
• Creation and dissemination of information and creative products; Telecommunications – BGN 9.6 million;
• Real estate operations - BGN 1.3 million;
• Professional activities and research - BGN 5.3 million;
• Administrative and support service activities - BGN 11.1 million;
• Education - BGN 1.1 million;
• Human health and social work - BGN 9.5 million;
• Culture, sports and entertainment - BGN 3 million;
• Other activities - BGN 500 thousand.

In case that the budget under any of the sectors has not been realized in full, the Managing Authority of OPIC may redirect the free resource to the sectors for which the financing is insufficient.

2. The maximum amount of the grant for which medium-sized enterprises may apply has been increased to BGN 150 thousand, but shall not exceed 3% of the turnover as declared in the Annual Tax Return for 2019 under Art. 92 of the Corporate Income Taxation Act or Art. 50 of the Personal Income Taxation Act (for sole traders). The minimum amount of the grant has remained unchanged as per the initial version of the conditions for application – BGN 30 thousand.

3. It is provided that the project applications of candidates shall not be financed as per the order of admission, but will be ranked according to certain criteria. The evaluation of candidates will be carried out in two stages: Stage 1: Assessment of administrative compliance and eligibility and Stage 2: Technical and financial evaluation. Only candidates who have successfully passed the first stage will be admitted to Stage 2.

4. The eligible candidates shall be traders who have a minimum of two completed financial years (2018 and 2019) before the date of announcement of the procedure, within which they have carried out business activities.

5. The minimum turnover for 2019, which the eligible candidates should have realized, shall be no less than BGN 1 million. This change is favourable for the candidates, as the initially envisaged conditions for application provided for a minimum turnover for 2019 in the amount of BGN 3 million. The requirement for maximum admissible turnover for 2019 in the amount of BGN 50 million is revoked.

6. Eligible applicants must have registered a decrease of at least 20% in turnover for one of the calendar months in the period from 1 February 2020 until the month preceding the month of application compared to the turnover for the corresponding month in 2019 (and not as provided in the previous version of the conditions – as compared to the average monthly turnover for 2019) as per the VAT return submitted to the NRA.

7. Applicants may apply for support only for their main economic activity. The code of the main economic activity will be checked on the basis of data for 2019.

8. Only eligible costs for employment contracts concluded before 1 July 2020 may be claimed as eligible staff costs (gross salary costs and costs for social security and health contributions at the expense of the employer). The expenses for remunerations should not exceed the amounts under the employment relationship as of 1 July 2020, but not more than BGN 2,000.

The final term for application of project proposals shall be 30 days counted as of the date of announcement of the procedure.

This material is not exhaustive, is only of general nature and does not represent a specific advice or consultation. Should any additional questions arise, please do not hesitate to contact us at tel.: 02/943 37 00, fax: 02/943 37 07, е-mail: office@afa.bg or at: 38, Oborishte Str., Sofia 1504.