Brussels, 6 February 2023
The European Commission has approved, under EU state aid rules, the prolongation and amendment of a €183.7 million German scheme (‘INVEST – Venture Capital Grant’). The aim of the scheme is to support equity investments by private investors in small, young, and innovative companies. The measure offers incentives to individuals, so called business angels, to buy and hold shares in these target companies. Under the scheme, the aid takes the form of: i) acquisition grants, covering 20% of the costs for acquiring shares, and ii) exit grants, comprising a flat-rate compensation for taxes payable on capital gains resulting from a profitable sale of the acquired shares. The scheme was originally approved by the Commission on 16 April 2013 (SA.35455) and subsequently prolonged and amended on 12 December 2016 (SA.46308) and on 21 December 2020 (SA.59267).
Germany notified the following modifications to the scheme: (i) the prolongation of the measure until 31 December 2026, with an annual budget of €45.9 million; (ii) an increase by 5% of the acquisition grant; (iii) the introduction of investment limits per investee companies (whereby an investor can claim the acquisition grant for an investment of up to €200.000 per company) and of a cap of 25% of the invested amount for exit grants; (iv) the introduction of a limit of €100.000 in the total amount an investor can receive in acquisition grants; and (v) the inclusion of ‘registered cooperatives’ as potential investees.
The Commission assessed the amended scheme under EU State aid rules, in particular the revised Risk Finance Guidelines. The Commission found that the scheme is necessary to continue to support equity investments by private investors in small, young, and innovative companies. The Commission found that the scheme continues to be proportionate, as it is limited to the minimum necessary, and to have a limited impact on competition and trade between Member States.
On this basis, the Commission approved the amended scheme under EU State aid rules. The non-confidential version of the decision will be made available under the case number SA.105224 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.
Source – EU Commission