Incentives at a Glance
Incentives Programs in Germany
Incentives programs in Germany are available through different public funding instruments and for different funding purposes.
The following sections outline the most common as well as attractive incentives programs and their application fields in Germany.
- Grants for R&D
- Grants for hiring personnel
- Public loans
- Public guarantees
The different incentives instruments can be combined.
Each incentives program defines industries as well as forms of investments (e.g. greenfield projects or expansions) eligible for funding. Foreign investors are subject to exactly the same conditions available to German investors.
Each program has a set of criteria (such as company size, planned investment project location, etc.) which determine individual investment project incentive levels.
EU Criteria Determining Company Size
Company size is generally determined according to an EU-wide classification system in which companies are categorized as being small, medium-sized or large according to their employee numbers, annual turnover and/or annual balance sheet total.
The size of a company is an important criteria to determine the possible incentives level a company may receive. Most incentives programs offer the highest incentives rates to small and medium-sized enterprises (SMEs). Some programs may even specifically target SMEs (this is very often the case with R&D programs).
The criterion concerning the headcount is compulsory. In addition, either of the annual turnover or the balance sheet criteria must also apply. Please refer to the explanation of the European Commission for more information.
Regional Economic Development Program North Rhine-Westphalia
North Rhine-Westphalia offers for the creation and securing of long-term jobs and training positions in the structurally weak regions of the state the Regional Economic DevelopmentProgram (RWP).
Who receives support?
- Commercial enterprises in special promotion areas of the state. The promotion areas are defined as C- (GRW-program) or D-areas; please refer to the attached map.
What is supported?
- Investments which secure or create jobs and have a volume of at least 150.000 €
What form does this support take?
- Support is granted in the form of non-repayable subsidies.
How much support is provided?
- In C-areas, small enterprises (less than 50 employees and with annual sales of max. 10 million €) can enjoy subsidies of up to 25 % if they create at least 3 new jobs.
- Medium-sized enterprises (less than 250 employees; annual sales max. 50 million € or annual balance of max. 43 million €) can enjoy subsidies of up to 15 %, also provided they create at least 3 new jobs.
- Percentages may be raised by 5% under certain conditions for small and medium-sized companies!
- Large enterprises can receive up to 10 %, but only up to a maximum of 2.5 million €, provided they create at least 30 new jobs.
- In D-areas, small enterprises can enjoy up to 20 %, medium-sized enterprises 10 % and large enterprises also 10 %, but only up to a maximum of 200,000 €!
Example RWP calculation:
A medium sized company invests 20 million € and creates 55 jobs. According to NRW-provisions, the calculation equivalent of each job is 150,000 €.
55 jobs x 150,000 € = 8,250,000 €. This is the base value for the calculation, as the investment volume in this case exceeds this amount.
As the company will invest at a location in a C-area, 15 % can be applied
= 1,237,500 € incentive amount.
In case the same company would invest in a D-area, the incentive amount would be 825,000 €, as in D-areas only 10 % of the eligible amount can be disbursed.
Economic Development Agency
of the German State of North Rhine-Westphalia
Völklinger Str. 4, 40219 Düsseldorf, Germany
Phone: +49 211 13000-0
Fax: +49 211 13000-154
E-Mail: nrw@ nrwinvest.com
Advice Center Rhineland
Kavalleriestraße 22, 40213 Düsseldorf, Germany
Phone: +49 211 917414800
Fax: +49 211 917419219
Branch Office of NRW.BANK in Münster
Advice Center Westphalia
Friedrichstraße 1, 48145 Münster, Germany
Phone: +49 251 917414800
Fax: +49 251 917412666