Government Proposal on discretionary government transfers to develop business operations in 2021-2028

On 8 April, the Government submitted to Parliament a proposal on discretionary government transfers to develop business operations in 2021‒2028. Government transfers under the proposed act would promote economic growth, employment, business innovation and competitiveness as well as other industrial and business policy objectives. The proposal is linked with the new programming period of the EU’s regional and structural policy in 2021‒2027.

The proposed act would repeal the current Act on Discretionary Government Transfers for Enterprises. 

Grants to benefit growth and development of SMEs in particular 

The main elements of regulation would remain unchanged. The aid scheme would continue to consist of two parts: business development aid and support for improving the companies’ operating environment. The grants would be used to support growth and development of SMEs, in particular. The statutory tasks would remain the responsibility of the ELY Centres of South Savo, Häme, Central Finland and North Ostrobothnia.

Business development aid could mainly be granted to SMEs for innovative development and investment projects related to growth or internationalisation. Support for improving the companies’ operating environment could be granted to non-profit public and private organisations and foundations for studies; development of services needed by companies; promotion of mutual cooperation between companies, or between companies and higher education or research institutions; and the promotion of research with business networks.

Allocation of grants to be based on regional and structural policy aims

The grant programmes under the proposed act would be used to implement the EU’s regional and structural policy programmes in the period starting in 2021. Consequently, the allocation of grants would take into account the objectives of EU and national regional and structural policies as well as competitive aspects. Key priorities for the programming period 2021‒2027 are the promotion of carbon neutrality, energy and material efficiency and digitalisation. In addition, aid programmes could be used for purely nationally funded grants.

Grants under the proposal will be funded from appropriations from the State budget and from European Union funds, in particular from the European Regional Development Fund and the Just Transition Fund.

Changes to eligible sectors and conditions on granting aid

The proposal would change the scope of eligibility for business development aid so that only primary production in agriculture, fisheries and forestry would be excluded from it. For example, companies in the fish processing sector or those that serve the forestry sector would no longer be excluded from the scope of the aid.

Consideration for environmental aspects has been added to the conditions for receiving business development aid. These include projects that promote the objectives of regional and structural policy programmes, such as decarbonisation or energy and material efficiency, or that have other positive effects on the environment. 

It is also proposed that a new section be added to the act, which would provide more flexibility to the granting of business development aid in exceptional circumstances, including crises such as the coronavirus pandemic. This would not constitute a general rule but instead provide flexibility in the granting of development aid in exceptional circumstances. Granting development aid in exceptional circumstances would require that further provisions on it be laid down in a government decree. 

The act is scheduled to enter into force in autumn 2021. Provisions on the entry into force would be laid down in a government decree. The act would be temporary and remain in force until 31 December 2028.

Inquiries:
Emmi Äijälä, Senior Specialist, Ministry of Economic Affairs and Employment, tel. +358 29 504 7216
Mikko Ojala, Senior Ministerial Adviser, Ministry of Economic Affairs and Employment, tel. +358 29 506 3506