Writing the application in a hurry may be quite costly in the future

EU GRANTS | An ad hoc strategy for company development through export and wrong choice of target market or markets may be problematic for the entrepreneur. Even if they manage to obtain financial support, problems with proper settlement may occur in the future.

Michał Kołtuniak

EU funds reserved for entrepreneurs may be divided according to the types of supported projects. On the one hand, they could be broadly-understood research & development projects or, on the other hand, support for investments that increase competitiveness and, for example, are related to ecology. The companies may also benefit from grants for the purchase of consultancy services and support from business support entities. Finally, a portion of the EU funds is assigned to the development of processes related to internationalisation, that is primarily the development of export.

The last case features many models of support. Projects that envisage comprehensive promotion of companies, their products or region may be endorsed by business-support institutions, associations of companies, local governments or other entities. In such situations individual entrepreneurs do not prepare their co-financing application on their own and only have the opportunity to join such projects. According to Anna Misiołek of Abbeys, in such cases it needs to be considered that exhibitions, fairs or economic missions aimed at promotion may already be indicated in such programmes, and a company may obtain the co-financing only if it selects events from the adopted catalogue. The entrepreneur cannot decide on their own where and how they would like to promote themselves.

However, there are sources of financing that give greater freedom to the entrepreneur. Then they have to prepare full, coherent and comprehensive strategy for export development (export development plan) that may be the basis for the assessment of the project together with other adopted criteria and be decisive for receiving the EU grant.

In such cases it is not worthwhile to fight for the grant at all costs. If the export development plan is prepared only because a company finds out about the possibility of receiving the EU grant, and the application is written to perfectly fit the criteria for project selection, this may lead to unnecessary problems in the future. If an entrepreneur really thinks about obtaining a grant for export development, they should prepare really well. They should particularly focus on the selection of target markets and types of events where they would like to promote their operations. If there is no coherent and comprehensive vision and the assessment of global situation is wrong, the company may lose a part of the grant. This may be the result, for example, of the forced change in the promotion focus. Many examples from recent years show that such situations unfortunately took place, even if it were through no fault of the entrepreneurs.

The situations related to changes in fairs from one country to another took place e.g. with regard to Russia, says Anna Misiołek. She adds that, due to the geopolitical situation, the companies resigned from participation in fairs in this country. Therefore, they wanted to change the exhibition in Russia to another one taking place, for example, in Germany. However, even if the co-financing agreement provided for the possibility of such change, in the end the client had to come from the area initially indicated as target area. Simply speaking, it meant that the company went to the fair in Germany (and not Russia), but it had to attract a client from the territory of the Russian Federation. Being aware of this fact, sometimes the beneficiaries who employed the services of our company resigned from a portion of the grant, warns Misiołek. They saw no point in forcing such trips. In addition, it is not possible, for example, to change fairs into economic mission. The events have to be of the same type. What is key is that, according to officials, there are additional and other costs listed as eligible for reimbursement and such change is difficult. But I believe that such inconveniences will subside, as the companies will have time to complete their plans till 2023.

An unexpected change of expansion plans may also cause problems with grant settlement. It is not always possible to freely move expenses from one item to another. For example, if a company planned to participate in fairs, eligible costs could include:

– transport of exhibits and their insurance,

– rental and development of the exhibition space,

– business trips,

– visas.

If the company wanted to change this event to an economic mission to another country (e.g. due to the impossibility of going to a fair in a given country or the futility of such escapade because of restrictions), it would have to reduce the expenses. (Pursuant to the regulation on eligible costs) and in the project budget for the mission there is no such category of expenses as development of exhibition space or transport of exhibits. So only expenses on business trips and possibly visas could be moved to the mission.

Furthermore, when requesting for the change of promotion events, the company must prove to the institution granting support that all of the assumed goals, indicators and results of the project would be kept (e.g. number of completed events, number of attracted clients, received certificates, etc.).