Beneficial amendments in the VIP Cash Subsidy system: Focus on R&D and High Added Value
Beneficial amendments in the VIP Cash Subsidy system: Focus on R&D and High Added Value
On April 17, 2025, the Government Decree 81/2025 (IV. 17.) concerning the amendment of the Government Decree 210/2014 (VIII.27.) (hereinafter: Decree), which contains the rules for subsidies awarded by individual government decisions, was published in the Hungarian Gazette. The amendment came into force on April 18, 2025.
Over the past decade, projects receiving VIP Cash subsidy have mostly consisted of industrial investments with high labor demands. The current amendment to the Decree aims to implement the new direnction of the Hungarian Government's investment promotion strategy focusing on the support of Hungarian SMEs, encouraging projects with high added value, and fostering research and development initiatives. In our newsletter, we present the most important changes.
Certain provisions of the Decree amendments will be applicable to ongoing projects, while some amendments shall only possess relevance to new procedures.
The colleagues of BDO Hungary's FDI division provide assistance in exploring the terms of various subsidy schemes and engineering eligible projects.
For ongoing or new investment endeavors, contact our experts to identify and utilize available incentives.
Over the past decade, projects receiving VIP Cash subsidy have mostly consisted of industrial investments with high labor demands. The current amendment to the Decree aims to implement the new direnction of the Hungarian Government's investment promotion strategy focusing on the support of Hungarian SMEs, encouraging projects with high added value, and fostering research and development initiatives. In our newsletter, we present the most important changes.
1/ Asset-based VIP Cash subsidy:
- Available for investments from 2 million euros in 11 counties (Baranya, Bács-Kiskun, Békés, Borsod-Abaúj-Zemplén, Csongrád-Csanád, Heves, Nógrád, Somogy, Szabolcs-Szatmár-Bereg, Tolna, Zala) in settlements which are not district or county seats;
- SMEs may receive a 25% advance payment;
- 15 million euros additional revenue and 2 million euros additional wages shall be realized;
- At least two of the following six potential commitments shall be undertaken to qualify for the incentive:
- Increase R&D costs by 30%
- Creation of 10 R&D positions
- Creating jobs for 10 new employees participating in dual education
- Use renewable energy from own production at least in 30% of the total consumption of the affected company
- Procurement 30% of all services and goods within the 100 km radius of the incentivized investment
- Cooperation with HIPA in supplier development activities
- Increase the wage and headcount ratio by 30%
- Increase the revenue and headcount ratio by 30%
- Creation of 25 new jobs
2/ New Asset-Based VIP Cash subsidy for the establishment of rural R&D Centers:
- Available for companies employing at least 50 people (on group level)
- Project shall be realized outside Budapest
- The incentive is provided under regional aid and asset basis
- 10 new R&D jobs shall be created
- New R&D cooperation shall be established with a Hungarian university
- No minimum investment requirement;
- No R&D certification is required
3/ VIP Cash subsidy for R&D projects
- Available for companies become available for companies with at least 50 headcount on group level (instead of the current 100);
- Patent applications with priority claimed in Hungary may receive extra amount of subsidy
4/ VIP Cash subsidy for training projects
- Available for large enterprises or medium-sized enterprises with at least 100 employees headcount;
- Training incentive becomes accessible as a stand alone subsidy (without a related asset or BSC based investment);
- Minimum 250,000 euros training cost shall be defined as eligibility criteria;
- Minimum trained number of employees shall reach the 25;
- Training period extended from 24 to 36 months.
Certain provisions of the Decree amendments will be applicable to ongoing projects, while some amendments shall only possess relevance to new procedures.
The colleagues of BDO Hungary's FDI division provide assistance in exploring the terms of various subsidy schemes and engineering eligible projects.
For ongoing or new investment endeavors, contact our experts to identify and utilize available incentives.