Providing state aid regulated by new law in Moldova

The process of providing state aid to enterprises of Moldova will become more transparent, clearer and more predictable. The new rules are set out in a draft law approved today by the parliament, in the first reading, with 60 votes for.

The initiative was presented in parliament by Deputy Prime Minister, Minister of Economic Development and Digitalization Eugeniu Osmochescu. The official said that the draft allows the adjustment of the legal and institutional framework to the requirements of the European Union.

Through the new rules, public authorities and institutions that grant state aid will benefit from a clearer working framework, while enterprises will have greater predictability and transparency in accessing support measures.

“The main goal of the draft law is to establish clear rules for all market players, in order to ensure fair competition between all types of enterprises, regardless of their share capital,” said Eugeniu Osmochescu.

Among the new elements of the draft, there is the pre‑notification stage of support measures, which allows these measures to be consulted before the aid is provided. Also, in certain situations provided by law, aid will be able to be authorized tacitly. These changes will provide more clarity to investors and will help authorities manage public money more responsibly.

“Likewise, compared to the previous law, we propose clarity on who the beneficiary of state aid is. Thus, while the 2012 law made exceptions for the agricultural and fisheries sectors, in the draft presented today, we are bringing clarity. At the same time, the legal rules, as well as the ceilings are adjusted to the requirements of European Union law,” noted Deputy Prime Minister Osmochescu.

At the same time, the new draft provides for the creation of the Central Register of de minimis Aid, a component part of the Automated Information System ‘State Aid Register’, which will record all data on small-scale financial support provided to companies, ensuring transparency and compliance with legal ceilings.

“Why do we need such a register? For transparency, because a company or a group of companies may benefit from state aid from more providers. Let us imagine a company that receives state aid from more local public authorities. In such a case, the state aid register will allow transparency up to the necessary de minimis level and will determine when it is time to stop, and then de minimis state aid turns into classic state aid, which is already subject to other rules of the game, both for the provider, for the beneficiary and for the Competition Council,” said Eugeniu Osmochescu.

According to the draft, an enterprise will be able to benefit, over a three‑year period, from de minimis aid of up to 300,000 euros. For services of general economic interest, the ceiling will be 750,000 euros for the same period, and for the agricultural sector – 50,000 euros.

An example that falls under the new legal framework is the Regional State Aid Scheme for Investments, which offers enterprises investing in the manufacturing industry direct financial support. This scheme already proves the benefits of applying clear and predictable rules: transparent eligibility criteria and aid ceilings differentiated by regions.

The draft is to be examined by the parliament in the second reading. After approval, the new law will enter into force six months after the date of its publication in the Official Journal of Moldova.