Types of support, cumulation and the "de minimis" principle

Last modified:

Tuesday 11 February 2020

Under what circumstances are public grants available? 

In general, companies should be able to operate autonomously and without public support. It is on this basis that the community framework for State aid arises. The latter offers various exception systems, notably in favour of SMEs as well as for certain types of expenses (R&D, investments, etc.).

Therefore, the State (whether federal, regional or at any other level of power, from local to supranational) can support companies selectively and intermittently. Subsidies, bonuses or grants, depending on the term one wishes to use, often relate to very specific categories of expenses: investments, recruitment, consulting, training, export, R&D, environment, etc.

Different types of support

The public authorities have an array of tools at hand to facilitate the implementation of certain projects. These range from a basic grant to various fiscal mechanisms (tax credits, exemptions, additional allowances, etc.) and parafiscal mechanisms (reduction of social security contributions, etc.) as well as the provision of hosting solutions (citydev.brussels, business centres, incubators, etc.), consulting services (one-stop service for local economic stakeholders, 1819.brussels, etc.) or financing solutions (BruPart, Guarantee Fund, finance.brussels, etc.).

Can all this be combined ?

It would be too complex to go into the details of all the many overlapping scenarios, but keep in mind that the same expense cannot generally be subsidised twice… However, distinct expenses within the same project may be subject to distinct, complementary support.

What about European conditions?

There are several issues concerning community guidelines for State aid. However, it remains possible for public authorities to grant aid without worrying about its compatibility in this respect so long as, cumulatively, the aid does not exceed €200,000 over 3 years. This is what is known as "de minimis" aid. This is the reason why many grant application forms include a box for "grants obtained during the current year and during the previous 2 years".

The icing on the cake?

Although this is not the purpose, public grants often generate a deadweight loss effect. In other words, they are not actually essential to the execution of the project. In addition, it is generally recommended to avoid taking them into account your financial forecasts. That said, in some cases, the intervention rates or the amounts involved are often such that the grants can have a decisive factor on the execution of a company project. Whether you are in the process of setting up a company, or developing an existing one, it is a good idea to find out how the public authorities could support your project. 

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