01 February, 2023 21:58 IST
Myiris - NRI Corner
Subsidy Details

The Scheme:

The DEG has been promoting private investment in developing and transition countries and partnerships between German and other European enterprises within the framework of the German development co-operation for more than 35 years. By promoting the private sector in these countries, the DEG creates jobs, contributes to economic growth and increases people's standard of living. The DEG - German Investment and Development Company, Cologne, grants project-tied founding and consolidation subsidies (together called start-up subsidy) to citizens of developing and transition countries who wish to start up an independent business as entrepreneurs in their home country or another developing or transition country.

Start-up subsidy:
The NRIs will receive a founding and a consolidation subsidy for the partial finance of their investment project - in total called "start-up subsidy". The DEG will grant a maximum of DM 9,000 as a founding subsidy the first time the NRI enterprise invests in tangible assets, a warehouse and the required operating resources. A consolidation subsidy of the same amount is then disbursed 12 months later in order to support the start-up phase, if his business has developed favourably. Thus, the NRIs will receive a maximum amount totaling DM 18,000. However, the maximum amount depends on the total amount of the eligible investment costs and will not exceed 3% of these expenditures.

The following entrepreneurs from developing and transition countries are entitled to apply: NRIs who have been living legally in the Federal Republic of Germany for several years or who usually have returned to their home countries no more than 5 years prior to the submission of the application NRIs who have been trained and/or retrained professionally for at least 1 years (with appropriate certifications of completion) or who have acquired several years working/ professional experience (as employees) in Germany, and NRIs who are capable of establishing their own, independent business as a result of their technical, commercial or entrepreneurial qualifications.

Eligibility for Project Promotion:
The following types of business start-up projects in the private sector are eligible for promotion. Establishing enterprises Taking over existing private enterprises The acquisition of an equity participation allowing for genuine business activity Expansion-related investments in those businesses which are in the initial start-up phase of the first three years after taking up business activity

Conditions for Subsidy:
The start-up subsidy shall only be granted if it would be considerably more difficult to assure the success of the new enterprise without it. A reasonable amount of the financial resources of the entrepreneur must be used to finance the start-up project. The applicant must have the technical, commercial and entrepreneurial qualification necessary to operate in his/her area of business, and prove this by submitting a CV and certificates or other pertinent documents (for example, certificates of business activities or training). The applicant should have commercial know-how and entrepreneurial skills. Compensation for any lack of commercial expertise may be effected by engaging an employee experienced in this field or by employing external commercial specialists. In order to evaluate the start-up project, the DEG needs a detailed business plan with information on the type of business to be carried out, the location, infrastructure, size of the business, the number of employees, the availability of suppliers and the sales market, the expected turnover and profits. The business plan should be accompanied by an expert opinion submitted to the DEG and issued by a competent and independent local institution evaluating the feasibility of the start-up project and its prospects of success. As the start-up project can only be promoted if its total financing is assured, a detailed investment and financing plan is also required. A start-up project will only be promoted if the applicant predominantly works in it, thereby making it constitute his/her primary source of income. It must be assured that the start-up project provides a viable existence to the applicant and his/her family and that it meets the debt service for the raised loans. Conclusive evidence of the sales and earnings to be produced by the start-up project shall be provided.