The European Commission has approved under European Union (EU) State aid rules Luxembourg's map for granting regional aid from 1 January 2022 to 31 December 2027, within the framework of the revised Regional aid Guidelines (RAG).
The revised RAG, adopted by the European Commission on 19 April 2021 and in force since 1 January 2022, enable EU Member States to support the least favoured European regions in catching up and to reduce disparities in terms of economic well-being, income and unemployment. They also aim to provide increased possibilities for Member States to support regions facing transition or structural challenges such as depopulation, to contribute fully to the green and digital transitions.
At the same time, the revised RAG maintain strong safeguards to prevent Member States from using public money to trigger the relocation of jobs from one EU Member State to another, which is considered essential for fair competition in the Single Market.
Luxembourg's regional aid map defines the two Luxembourg regions eligible for regional investment aid. The map also establishes the maximum aid intensity in those eligible regions. The aid intensity is the maximum amount of State aid that can be granted per beneficiary, expressed as a percentage of eligible investment costs.
Under the revised RAG, regions covering up to 7.50% of the population of Luxembourg will be eligible for regional investment aid, under the derogation of Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU) (so-called "c" areas).
In order to address regional disparities, Luxembourg has designated two so-called non-predefined "c" areas, one consisting of two municipalities (Dudelange and Bettembourg), the other consisting of three municipalities (Wiltz, Winseler and Kiischpelt) totalling 43,032 inhabitants and covering 6.78% of Luxembourg's population. In these areas, the maximum aid intensity for large enterprises is 10%. That maximum aid intensity can be increased by 10 percentage points for investments made by medium-sized enterprises and by 20 percentage points for investments made by small enterprises, for their initial investments with eligible costs up to €50 million.
