22 October 2009 PricewaterhouseCoopers Slovakia Are you thinking of investing in Košice? Your guide...

22 October 2009

PricewaterhouseCoopersSlovakia

Are you thinking of investing in Košice?

Your guide to grants and incentives in Košice 2009-2010

PricewaterhouseCoopersOctober 2009

Slide 2

Agenda

• General outline of grants and incentives

• The grants and incentives landscape

• Potential grants and incentives: Slovakia and the city of Košice

• What can PwC do for you?

October 2009Slide 3

General outline of grants and incentives


Slide 4

Main rules on grants and incentives (1)

• Grants and incentives are meant to trigger certain behaviours that otherwise may not occur under normal market circumstances. European, national, and regional governments want to stimulate a wide range of activities. Grants and incentives are available to entities that invest in areas such as:

– capital investments

– research and development

– training and employment

– sustainability

– international cooperation

• Grants and incentives come in different forms:

– cash

– soft loans

– tax step up in depreciation

– tax incentives

Section 1 - General outline of grants and incentives


Slide 5

Main rules on grants and incentives (2)

• Applications for benefits should be submitted before costs are incurred or before the project is started. Therefore, only costs during the project period, as mentioned in the application, are eligible.

• Eligible costs – depending on the programme – are:

– capital goods

– wage and related costs

– consumables

– patents

– travel

– third-party experts

• Anything related to normal business costs is not eligible, e.g. marketing.



Slide 6

Requirements of grants and incentives

– Grants and incentives for investments may require proof of durability and – in most cases – job creation.

– Grants and incentives for R&D may require collaboration with partners.

– Grants and incentives may be awarded through a tender procedure (‘beauty contest’) or continuous call.

– Most grants and incentives require reports (interim) and proof of accountability.

– A project can accumulate contributions from different grants and incentives programmes (such as EU, national, or regional grants).

– The maximum amount (percentage) of subsidy that can be obtained for a certain project depends on the type of project and related eligible costs. If the project receives substantial amounts of subsidies, the European Commission must be notified of this.


October 2009Slide 7

The grants and incentives landscape


Slide 8

Subsidy and incentive landscape

Grants and incentives can be obtained from regional and national governments, as well as directly from the European Commission.

Capital expenditures

Employment and training

Research and development

Sustainability Internationalcooperation

European

National

Regional

Section 2 - The grants and incentives landscape


Slide 9

Main differences and parameters

Europe National Regional

Support amount High Intermediate Low

Procedure Usually six to 12 months Project start after grant

approval

Usually three to eight months. Project start after submission of application (in some cases, pro

forma applications may allow the project to start)

Usually three to six months. Project start after submission of

application

Probability of success

High return - high risk High return - medium risk Medium return - medium risk

Partners Three to 15 partners from different member states

One to five partners, preferably knowledge institutes

One to three partners in the applicant’s region

Regulation Very strict with regard to the application and execution of

the project

Strict in application, flexible after awarded

Flexible during application and after awarded

Awarding Tender Tender or open the entire year Tender or open the entire year

Type Cash Cash or tax Cash

Publication Results and general information disseminated at

the European level

Results and general information occasionally disseminated at the

national level

Results and general information mostly not disseminated

Section 2 - The grants and incentives landscape

October 2009Slide 10

Potential grants and incentives: Slovakia and the city of Košice


Slide 11

National grants and incentives: Slovakia

– Slovakia has set up ambitious state incentive programmes – the Investment Aid Act and the Act on Incentives for Research and Development – to attain a competitive edge in the modern world economy. Spearhead actions of this programme are:

• Create new jobs, work smarter (social innovation), and productivity growth

• Attract investors to the least economically developed regions of Slovakia and promote businesses moving to certain locations or the expansion of a company at that location

• Better education, a prerequisite for international entrepreneurs to establish themselves

• Focused on growth in the following areas: Industrial production, shared services, technology and innovation, research and development, and tourism.

– Slovakia is divided into four regions for incentive purposes: the Bratislava region, west Slovakia, central Slovakia, and eastern Slovakia

– Each region has its own specific economic strengths (clusters) and focuses

– The incentives are developed based on state funding

– Aid intensity varies based on compatibility with the regional aid map and regional goals

Section 3 - Potential grants and incentives: Slovakia and the city of Košice


Slide 12

(1)Industrial production: The Investment Aid Act


Goal The objective is to attract investors to the least economically developed regions, and to focus on industries with high added value, such as electronics, optical electronics, pharmaceuticals, and engineering.

Criteria Location in the following eligible regions: Trencin, Trnava, Nitra, Zilina, Banska Bystrica, Presov, and Košice

The minimum project costs depend on unemployment level. In the city of Košice, projects with costs of €13.28 million or more should be eligible for subsidies

The set-up of a new establishment, the extension of an existing business, or the change in the production programme would qualify

The acquisition of new production and technological equipment for the project

Subsidy Up to 50% of project costs, calculated over a maximum of three years

Cash grants, subsidies for job creation, tax relief, and the transfer of public assets at below market price

Procedure Open for applications throughout the year


Slide 13

(2)Shared service centres: The Investment Aid Act


Goal The objective is to attract investors to the least economically developed regions, and to focus on setting up software development centres, high-tech or customer support centres, and expert solutions centres.


In the city of Košice, projects with minimum costs of €1.16 million or more are eligible for subsidies

The set-up of a new centre or the extension of an existing centre would qualify

30% of employees need to have an university education

The acquisition of new production and technological equipment for the project

Subsidy 50% of project costs, calculated over a maximum of three years

Cash grants, subsidies for job creation, tax relief, and the transfer of public assets at below market price



Slide 14

(3)Technology and innovation centres: The Investment Aid Act


Goal The objective is to attract investors to the least economically developed regions, and to focus on setting up centres where the company carries out operations making improvements or changes to products, production processes, and technologies.


In the city of Košice, projects with minimum investment costs of €1.33 million or more are eligible for subsidies

The set-up of a new centre or the extension of an existing centre would qualify

60% of employees need to have an university education

The acquisition of new production and technological equipment for theproject


Cash grants, subsidies for job creation, tax relief, and transfer of public assets at below market price



Slide 15

(4)Tourism: The Investment Aid Act


Goal The objective is to attract investors to the least economically developed regions, and to focus on complex tourism centres providing at least three tourism services, such as sport, wellness and leisure centres, amusement and water parks.


In the city of Košice, projects with minimum investment costs of €9.96 million or more are eligible for subsidies

The set-up of a new tourism centre or the extension of an existing tourism centre would qualify

The acquisition of new production and technological equipment for theproject


Cash grants, subsidies for job creation, tax relief, and transfer of public assets at below market price



Slide 16

(5)Research and development: The Act on Incentives for R&D


Goal Research and development on technical products or processes that are new for the company. The programme is focused on basic research, applied research, and experimental development projects. The following activities are also supported: technical feasibility studies, the protection of intellectual and industrial property, or temporary assignments of highly qualified employees from other sectors of R&D (such as universities or research institutions) to the private sector. The programme is easily accessible and the chances of success are high.

Criteria The establishment of a new facility for R&D, or the extension of an existing facility

Location in the following eligible regions: Bratislava, Trencin, Trnava, Nitra, Zilina, Banska Bystrica, Presov, and Košice

The results of R&D should be innovative for the company

Minimum project costs, based on the project type and company size, are from €0.25 to €3.5 million

Subsidy Tax credit for a maximum of three years, and direct cash grants

Aid intensity depends on the project type and company size (from 25% to 95% of project costs)



Slide 17

Regional grants and incentives: the city of Košice (1)

– The city of Košice is in the process of formulating a challenging local incentive programme – the Košice Investment Fund (KIF) – to attract investors from various sectors, and to provide comprehensive support for potential investors. It will be an instrument for implementing the Economic and Social Development Program of the city that was approved for 2008 through 2015. Spearhead actions of the KIF are:

• A city of innovation: supporting business for new entrepreneurs and sectors with higher added value bringing new, innovative solutions

• A city of culture: supporting infrastructure in tourism, and improving marketing and public relations in the sector

• A city for families: improving the ability to meet the needs of young families

• A healthy city: improving healthcare infrastructure and promoting renewableenergy projects in the industry sector

– Local incentives are developed based on city funding

– The city of Košice will be responsible for operating the fund and conducting the fund’s activities

– The KIF should come into existence and start its activities in 2010



Slide 18



Goal The KIF is aimed at increasing economic changes within certain key activities and industries in the city. Regional key sectors have been identified. The KIF will provide administrative and technical support for potential investors, and will also grant subsidies to investors.

Criteria The investment projects should:

– be innovative, efficient, and contribute to sustainable economic growth

– stimulate regional cooperation between local organizations

– strengthen the competitive position of the city

– enhance the knowledge economy

– strengthen the position of the following regional key sectors:

Research, development, and innovation

Shared services

Industrial production

Tourism and culture

Transport and logistics


Slide 19



Subsidy Grants and relief from local taxes

The sale or rental of city property at below market prices

Aid intensity depends on the activity – up to 50% of eligible costs

Eligible costs: all costs directly linked to the project

Procedure The programme will accept applications throughout the year, or in the form of tenders

October 2009Slide 20

What can PwC do for you?


Slide 21

We assist clients with obtaining and managing grants and incentives

Our services

Identify client needs

Identify, quantify and prioritize subsidy possibilitiesConsult with the authority providing the subsidyDetermine impact on the client’s organization

Collect and process dataBudget and administrative dataConcept application Definitive application and submission

Implementation plan for reportingAccompanying interim reportManaging the project budgetDissemination

Final reportAudit

Feasibility

Application

Management

Completion

Section 4 - What can PwC do for you?


Slide 22

Why Choose PwC?

Specialist KnowledgeWe combine our knowledge with

experience within your sector

High Success Rate

Technical & Economic

BackrgoundWe value your project based on

our broad backgrounds

Excellent Track record Expert in your Area and Excellent

reputation with Authorities

Flexible Fee StructureTailor made fee structure for each

project

International PwC Network

Our added value

Section 4 - What can PwC do for you?

© 2009 PricewaterhouseCoopers. All rights reserved. “PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. *connectedthinking is a trademark of PricewaterhouseCoopers LLP (US).

Thank you

Todd BradshawCountry Managing Partner

PricewaterhouseCoopers Slovakiaemail: [email protected]

Date post:	04-Jan-2016
Category:	Documents
Upload:	linette-curtis
View:	215 times
Download:	2 times

22 October 2009 PricewaterhouseCoopers Slovakia Are you thinking of investing in Košice? Your guide...

Documents