What is State Aid?
State aid refers to support measures granted by governments to companies that may distort competition within the European single internal market. European state aid law is designed to ensure that governments do not favour certain companies over their competitors, which would disrupt fair competition.
State aid can take various forms. Not only in the form of direct subsidies, but also through the provision of loans or guarantees on "soft" terms, relief from charges such as exemptions, waivers or reductions of fees, and non-market conform transactions. Sale of land below market value, favourable lease agreements, and tax advantages can also qualify as state aid.
The principle of European legislation is that state aid is generally prohibited, as it can distort competition and affect trade between Member States. However, under certain circumstances, state aid may be permitted if, according to the European Commission, it is compatible with the single internal market and, for example, contributes to objectives of general European interest or necessary economic or social development.
A support measure that may fall under the state aid regime must be notified to the European Commission for approval. After notification, the Commission assesses whether aid is indeed granted and, if so, whether it is compatible with the single internal market. Until the Commission has decided on a notification, the proposed aid may not be implemented. If it is implemented prematurely, there is a risk that the project may have to be halted or the aid, plus interest, may have to be recovered from the beneficiary.
What is our experience with State Aid?
Our state aid specialists have extensive experience in assisting both governments and companies in various complex state aid cases. Our expertise includes:
- State aid risk analyses – Assessing potential state aid risks, such as in land transactions, financing arrangements, and other government measures
- Public-private partnerships – Advising on state aid-compliant structuring of complex financing arrangements and PPP constructions
- Notification procedures – Guidance on notifying support measures to the European Commission and navigating approval procedures
- Recovery procedures – Legal assistance in recovery cases of unlawfully granted state aid
- Land transactions with governments – Advice on market-compliant valuation and state aid risks in the purchase and sale of real estate
- Tax advantages and subsidies – Assessing fiscal measures and subsidy schemes against state aid rules
- Investigations by the European Commission – Legal support during formal investigations into potentially illegal state aid
- Sector-wide expertise – Experience in sectors such as sport (Dutch football clubs), energy, transport, agriculture, and industry
- De minimis schemes and general block exemptions – Advice on the application of de minimis exemptions for small-scale aid and assessing whether aid measures qualify for automatic approval under block exemptions
- Crisis and recovery aid – Specialist knowledge of temporary state aid frameworks, such as during COVID-19 and the energy crisis
When should you instruct a lawyer with knowledge of State Aid?
Engaging a state aid lawyer is advisable in various situations:
For governments and public bodies:
- When developing new subsidy schemes or support measures
- If you plan to sell or lease land to companies below market value
- When providing loans, guarantees, or other financial support to businesses
- If you are considering granting tax benefits or reliefs
- When establishing public-private partnerships (PPP structures)
- When the European Commission opens an investigation into your support measures
For companies:
- If you have received aid and are unsure of its legality
- When confronted with a recovery order for unlawfully received aid
- When applying for subsidies where state aid risks may arise
- If you are part of a sector under enhanced scrutiny by the European Commission
- When purchasing land from the government on favourable terms
- When receiving advantageous loans or guarantees from public authorities
In specific procedures:
- If you become involved in a formal investigation by the European Commission
- If you wish to file a complaint regarding unlawful state aid to competitors
- When challenging Commission decisions regarding state aid
- If third parties make claims due to competition distortion caused by state aid
Preventive advice:
- For risk analyses in transactions between governments and businesses
- When structuring investments to avoid state aid risks
- If you want to develop compliance programmes for state aid rules
- When assessing whether de minimis rules or block exemptions apply
Our approach
Our state aid lawyers adopt a strategic and preventive approach to safeguard your interests optimally. Our working methods are characterised by:
- Thorough risk analysis and prevention – Carefully analysing your specific situation to identify potential risks in time and assessing whether state aid may be involved.
- Proactive structuring and compliance – Advising on state aid-compliant structuring of complex financing arrangements, PPP structures, and other government measures to prevent problems.
- European expertise and procedural experience – Guidance on notifications, formal investigations, and correspondence with the European Commission.
- Practical and results-oriented approach – Developing realistic strategies that lead to tangible results.
- Rapid response in urgent situations – Adequate assistance with recovery orders or investigations by the European Commission.
- Integrated approach – Collaborating with specialists in competition law, procurement law, and tax law for a comprehensive solution.
- Transparent communication – Clear agreements on costs, procedures, and strategic choices throughout the process.
Why choose our lawyers with experience in State Aid?
- Specialised expertise in European state aid law – In-depth knowledge of European legislation and case law.
- Experience advising both governments and companies – We understand both perspectives and develop optimal strategies.
- Proven track record in complex cases – Involvement in high-profile matters, including investigations into Dutch football clubs.
- Preventive and strategic approach – Thorough risk analyses and state aid-compliant structuring help prevent problems and recovery risks.
- Expertise in European procedures – Guidance on notifications and formal investigations with the European Commission.
- Sector-wide knowledge – Expertise across sectors such as sport, energy, transport, agriculture, and industry.
- Practical and commercial approach – Legal solutions aligned with commercial objectives and financial realities.
- Rapid response for urgent matters – Immediate assistance with acute state aid issues.
- Integrated service – Collaboration with other specialists for a comprehensive approach.
- Always up-to-date knowledge – Monitoring developments, guidelines, and case law.
- Transparent communication – Clear agreements on fees, procedures, and expectations.
- Results-driven approach – Practical and sustainable solutions that protect your interests.
De minimis and block exemptions in State Aid
Not all state aid needs to be notified to the European Commission in advance. Exemptions exist, such as:
- De minimis regulation – Small aid amounts up to €300,000 per company over three years, or lower thresholds for agriculture (€25,000) and fisheries (€30,000), may be granted without notification.
- General Block Exemption Regulation (GBER) – Certain categories of state aid are exempt from notification, provided specific conditions are met.
State Aid and the Dutch Market and Government Act
The relationship between state aid and the Dutch Market and Government Act (Wet Markt en Overheid, WMO) is complex but crucial for Dutch public authorities engaged in economic activities.
- When does the WMO apply? To local authorities performing economic activities in competition with private companies.
- State aid as an exception – Article 25h of the Dutch Competition Act provides that the WMO does not apply in cases of state aid.
- De minimis and the WMO – Minimal aid falls outside state aid rules, but WMO conduct rules still apply.
- General interest decision – An alternative to make the WMO inapplicable to specific economic activities.
Crisis and State Aid: COVID-19 and the energy crisis
Temporary frameworks enabled rapid support during crises such as COVID-19 and the energy crisis, including the REPowerEU plan for renewable energy and energy savings.
