START-UP STUDENT

FINANCING

Students in Romania will be able to obtain European funds with maximum values of 40,000 Euro – 100,000 Euro to start small businesses, within the INNOTECH STUDENT funding program, according to the official Proposal Guide for Applicants.

The Ministry of European Funds has released for public debate the draft Applicant Guide for the INNOTECH STUDENT funding line, under the Human Capital Operational Program 2014-2020.

The total allocated budget will be 20 million euros, of which 14 million euros will be the total value of the minimis aid scheme to be granted to students entering into business.

The funds will be available in almost the entire country, except for Bucharest and Ilfov County.

From the minimis aid scheme budget, non-repayable funds will be granted to students based on business plans, depending on the number of jobs created, as follows:

• Minimis aid equal to or less than 40,000 euros – minimum 2 jobs created;

• Minimis aid with a value greater than 40,000 euros but less than or equal to 60,000 euros – minimum 3 jobs created;

• Minimis aid with a value greater than 60,000 euros but less than or equal to 80,000 euros – minimum 4 jobs created;

• Minimis aid with a value greater than 80,000 euros but less than or equal to 100,000 euros – minimum 5 jobs created.

The state estimates that approximately 350 new companies will be created in this way. This means that, on average, each company will receive 40,000 euros according to MFE estimates.

The minimis aid will be granted in two installments, as follows:

• initial installment of up to 75% of the minimis aid value, as approved based on the business plan and provided for in the subsidy contract concluded.

• final installment representing the difference up to the total value of the minimis aid, after the beneficiary of the minimis aid proves that they have filled the minimum jobs assumed by the business plan proportionally to the total value of the approved minimis aid. In case the beneficiary of the minimis aid does not fill the minimum jobs assumed by the business plan proportionally to the total value of the approved minimis aid within 6 months, the second tranche of minimis aid will not be granted and the legal procedures for recovering the first tranche of subsidy granted will start.

The new Innotech Student program resembles the old Romania Start-Up Plus program or even older Romania Start-Up, and the student’s journey to European funds will be long, 8-20 months.

If the funding line is launched this year, students will start their own businesses and receive up to 100,000 Euros per business in 2021.

The proposed guide provides for 2 major stages of project implementation, with a total of 10 activities, including:

– First, grant administrators – eligible applicants with their projects will be selected under this program.

These can be:

• Accredited public and private universities;

• Doctoral and graduate schools with legal personality, including partnerships between these and the private sector/research-development-innovation centers;

• Accredited research institutes/centers, including research institutes of the Romanian Academy;

• Romanian Academy;

• Professional associations;

• Chambers of Commerce and Industry;

• Institutions and organizations members of Regional Pacts and Local Partnerships for Employment and Social Inclusion;

• Authorized providers of continuous vocational training, public and private;

• Trade unions and employer organizations;

• Members of Sector Committees and Sector Committees with legal personality;

• NGOs;

• Partnerships between the above-mentioned categories.

– These grant administrators will develop large projects, up to 2 million euros each.

– Within these projects, the grant administrators will select the target group, i.e., the final beneficiaries, the future entrepreneurs.

The target group consists of:

• Students (ISCED 5-7) – enrolled, at the date of entry into operation, in the final year of study of the completed study cycle,

• PhD students in the doctoral study cycle,

• Post-doctoral researchers,

• Course participants (ISCED 4, qualification level 5, enrolled in colleges organized at the level of higher education institutions) – enrolled, at the date of entry into operation, in the final year of study of the completed study cycle.

– Future business owners will attend entrepreneurship courses. Participants will receive 5 lei per hour of attendance.

– Participants will develop business plans, and at the end of the courses, the best business plans will be selected for possible funding. The selection will be made by a jury composed of entrepreneurs and various specialists.

– Participants whose business plans have been selected will proceed to the simulated enterprises and mentoring phase, to develop entrepreneurial skills.

– These participants will undergo internships in existing companies in the market in the field in which they also intend to do business. Following the internships and activities at the simulated enterprise, participants will receive a subsidy of 750 lei each.

– Establishment of new companies and receipt of the first tranche of non-repayable aid (75%). Certain sectors, such as agriculture, for example, are excluded from the program. Instead, judging by the name of the scheme, emphasis will be placed on businesses in technology and innovation. Specifically, the financed fields will be those from the list of CAEN codes related to the industrial policy directions mentioned in the National Strategy for Competitiveness 2014-2020. These include: Creative industries, Information and telecommunications technology, Tourism and ecotourism, Textiles and leather, Wood and furniture, Automotive industry and components, Health and pharmaceutical products, Energy and environmental management, Bioeconomy, biopharmaceuticals and biotechnologies, Construction, and others.

– Implementation of the business plan and hiring staff. Receipt of the second tranche (25%) of the minimis aid will be conditional on the employment of the staff assumed in the business plan.

– Ensuring the sustainability of the new companies for at least 6 months.