National Recovery and Resilience Plan – Fund for Supporting Industrial Transition

New applications starting from February 5, 2025

The Fund for Supporting Industrial Transition aims to facilitate the adaptation of the Italian production system to the European Union’s policies on combating climate change.

The Fund’s operation is governed by the Ministerial Decree of October 21, 2022, issued by the Minister of Economic Development, in agreement with the Minister of Economy and Finance and the Minister of Ecological Transition.

The Director’s Decree of December 23, 2024, establishes the terms and procedures for submitting applications through the opening of a dedicated application process to support investment programs for environmental protection. The Fund has an initial allocation of 400 million euros and operates through a ranking-based evaluation procedure to determine the order in which applications are admitted for assessment. Regarding the financial allocation, 40% of the resources are designated for funding projects in the regions of Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia, and Sicily, while 50% of the resources are reserved for energy-intensive companies.

Applications for access to the resources can be submitted from 12:00 PM on February 5, 2025, until 12:00 PM on April 8, 2025.

Applications will undergo a preliminary assessment phase in the order determined by the ranking. If the outcome is positive, they will be granted financial support within the limits of the available resources.

The incentives are provided in the form of non-repayable grants, which may range from 30% to 50%, in compliance with the maximum aid intensities established by the General Block Exemption Regulation (GBER) and Section 2.6 – Aid for Decarbonization of the "Temporary Framework" (European Commission Decision C(2024) 5008 FINAL concerning the Temporary Crisis and Transition Framework for State aid measures to support the economy following Russia’s aggression against Ukraine).

Investment programs must relate to a single production unit of the proposing company and must aim to achieve at least one of the following objectives:

• Greater energy efficiency in business operations;
• Efficient use of resources by reducing their consumption, including through reuse, recycling, or recovery of raw materials and/or the use of recycled raw materials.

Investment programs must be exclusively aimed at improving environmental protection in business processes. Projects that result in an increase in production capacity are not eligible, except for increases due to technical requirements, provided they do not exceed 20% compared to the pre-investment situation. For aid granted under the Temporary Framework, increases must not exceed 2% compared to the previous situation.

The investment programs must be initiated after submitting the application for access to the Fund, involve eligible total expenditures between 3 million euros and 20 million euros, and be completed within 36 months from the date of grant approval (with a possible extension of no more than 12 months). Within this period, the investments covered by the supported development programs must also become operational and fully functional.

Amendments to the Development Contracts Regulation and "ZES Zone" Resources

The Decree of the Ministry of Enterprises and Made in Italy updates the existing regulations and optimizes the use of public resources.

With the adoption of the Decree of November 6, 2024, the Ministry of Enterprises and Made in Italy introduced amendments to the current Development Contracts framework, as established by the Ministerial Decree of December 9, 2014.

These regulatory changes aim to enhance the efficient allocation of public resources, including a more precise definition of development programs for tourism activities and a revision of the incentives available for the agri-industrial sector.

Specifically, the decree introduces several amendments concerning:
(i) the regulatory framework for tourism and agri-industrial Development Contracts and
(ii) the intervention mechanisms for research and development projects.

Key Amendments to the Development Contracts for Tourism

The new regulatory framework introduces a categorization of eligible development programs, which was previously absent. It also identifies priority intervention areas that influence both the quantitative and qualitative aspects of hospitality offerings.

These include interventions aimed at:

• Enhancing and/or improving hospitality infrastructure, specifically:
  • The construction of new accommodation facilities.
  • The expansion of existing hospitality structures, provided that the investment project leads to an increase in capacity of at least 20% compared to the current situation.
  • Improving the quality of hospitality services.
  • Integrating additional services within existing hospitality facilities to enhance the tourism offering, including measures that support seasonal adjustment strategies.
• Developing and/or improving multifunctional structures and facilities that significantly increase tourism attractiveness and enhance the identity of local territories. This includes investments in ski lift systems, ski resorts, marinas, theme parks, water parks, and thermal establishments.

Key Amendments to the Development Contracts for the Agri-Industrial Sector

The revised regulation expands the scope of Development Contracts in the agri-industrial sector, introducing:

• The "large-scale investment project" concept, applicable to projects exceeding €50 million in expenditure. For these projects, the regulation establishes a progressive reduction in the contribution rate, according to investment brackets:
  • 100% of the recognized intensity for investments up to €55 million.
  • 50% for investments between €55 million and €110 million.
  • 34%, subject to individual notification, for investments exceeding €110 million.
• The "investment consolidation" principle, under which investment projects initiated by the same beneficiary within the same production unit within three years of the start date of another subsidized investment are considered part of a single investment project.

Amendments to Research and Development Project Interventions

The regulatory update aligns the list of eligible technologies with the objectives of the Horizon Europe program.

The new framework classifies technologies into 18 categories, outlining their general guidelines:

• Manufacturing technologies
• Fundamental digital technologies, including quantum technologies
• Emerging enabling technologies
• Advanced materials
• Artificial intelligence and robotics
• Circular industries
• Clean, low-carbon industry
• Rare and non-communicable diseases
• Infectious diseases, including neglected diseases and poverty-related illnesses
• Digital tools, technologies, and solutions for health and care, including personalized medicine
• Industrial facilities in the energy transition
• Industrial competitiveness in the transport sector
• Clean, safe, and accessible mobility and transport
• Smart mobility
• Energy storage
• Food systems
• Bio-innovation systems in the EU bioeconomy
• Circular systems

Alignment with the October 25, 2024 Directive and the ZES Single Zone

This regulatory change aligns with the October 25, 2024 directive issued by the Ministry of Enterprises, which defines thematic areas and operational guidelines for utilizing resources from the Development and Cohesion Fund (2021-2027 programming period). These resources are allocated to the Development Contracts within the ZES Single Zone, encompassing the regions of Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sicily, and Sardinia.

The directive establishes the allocation mechanism for an additional €250 million in financial resources, of which €200 million are designated for financing... (continues based on the original text).

Opening of the application window for the so-called Mini Development Contracts starting February 5, 2025

Support for medium-scale financial investments related to STEP critical technologies

The so-called Mini Development Contract is an incentive promoted by the Ministry of Enterprises and Made in Italy, managed by Invitalia, to support investments aimed at the development or production of critical technologies identified by the European STEP Regulation (EU Regulation 2024/795): digital and deep-tech technologies, clean and resource-efficient technologies, and biotechnologies.

Pursuant to the directorial decree issued on December 20, 2024, by the Department for Enterprise Policies (Directorate-General for Business Incentives), detailed provisions have been established to ensure the effective implementation of the measure, supporting investments ranging from €5 million to €20 million in the above-mentioned critical technology sectors.

The Mini Development Contract provides funding for projects between €5 million and €20 million, targeting enterprises of all sizes for investment initiatives to be carried out in the regions of Basilicata, Calabria, Campania, Molise, Puglia, Sardinia, and Sicily. These investments must focus on the development and/or production of critical technologies outlined in the STEP Regulation or on strengthening their value chain to enhance supply chain security, resilience, and system productivity.

A total budget of €300 million has been allocated, sourced from the 2021–2027 National Research, Innovation, and Competitiveness Program, and distributed as follows:

• €100 million under Policy Objective 1 of the PN RIC 2021–2027, designated for SME investments
• €200 million under the STEP Policy Objective of the PN RIC 2021–2027, available for investments by SMEs and large enterprises

Eligible investments must pertain to a single production site within the following sectors:

• Digital technologies and deep-tech innovation
• Clean and resource-efficient technologies, including net-zero emission technologies
• Biotechnologies, including medicines listed in the Union's critical medicines inventory

The funding is provided as non-repayable grants, subject to the maximum aid intensities specified in the Regional State Aid Guidelines. Eligible expenses will be covered at the following rates:

• 55% for small enterprises
• 45% for medium enterprises
• 35% for large enterprises

Applications will be ranked based on an evaluation process that considers the following criteria:

• Financial independence
• Contribution of core business operations to revenue generation
• Environmental sustainability
• Level of innovation
• Employment impact

Applications may be submitted exclusively online via Invitalia’s web platform from 12:00 p.m. on February 5, 2025, until 12:00 p.m. on April 8, 2025.

Banking & Finance

The Venezuelan Central Bank (VCB) established the interest rates applicable to obligations derived from employment relationships (59.30% and 47.65% - October 2024) and to transactions with credit cards (60.00% annual maximum lending rate and 17.00% annual minimum lending rate - November 2024). (Official Gazette of 11/18/2024. Official Notice. Entry into force: Upon publication in the Official Gazette).

Tax

The National Integrated Service of Customs and Tax Administration (Servicio Nacional Integrado de Administración Aduanera y Tributaria - SENIAT) legalized the issue and circulation of liquor warranty seals. (Official Gazette of 11/25/2024. Administrative Ruling No. SNAT/2024/000113. Entry into force: Upon publication in the Official Gazette).

Civil Aeronautics

The National Institute of Civil Aeronautics (Instituto Nacional de Aeronáutica Civil - INAC) issued an Administrative Ruling the purpose of which is to establish the General Conditions of Air Transportation, in relation to the rights and obligations of the passengers that contract for air transportation services, as well as the duties, rights and obligations of the operators of the service of air transportation of passengers, cargo, and mail, in national and international, regular and nonregular operations, within, from and towards the Bolivarian Republic of Venezuela and all matters concerning the civil liability for the damages affecting the users’ interests. Administrative Ruling No. PRE-CJU-GDA398-16, published in Official Gazette No. 6.228 Extraordinary of 05/18/2016, which contains the General Conditions of Air Transportation, was repealed. (Official Gazette of 11/05/2024. Administrative Ruling No. PRE-CJU-GDA-308-24. Entry into force: Upon publication in the Official Gazette).

The INAC issued the following Aeronautical Regulations: Venezuelan Aeronautical Regulation 110 (RAV 110) Safe Air Transportation of Hazardous Goods, the purpose of which is to establish the technical aeronautical rules that will govern the safe air transportation of hazardous goods. Administrative Ruling No. PRE-CJU-107-13, published in Official Gazette No. 6.099 Extraordinary of 05/23/2013, called “Air Transportation of Hazardous Goods”, was revoked. 2.- Venezuelan Aeronautical Regulation 39 (RAV 39) Airworthiness Directives, the purpose of which is to establish the requirements related to the Airworthiness Directives. Administrative Ruling No. PRE-CJU-129-23, published in Official Gazette No. 6.753 Extraordinary of 07/28/2023 that contains Venezuelan Aeronautical Regulation 39 (RAV 39), called ‘Airworthiness Directives”, was revoked. 3.- Venezuelan Aeronautical Regulation 277 (RAV 277) “Aeronautical Meteorological Service”, the purpose of which is to establish the use of the Procedures for the Aeronautical Meteorological Service that integrates the Services into Air Navigation.

Administrative Ruling No. PRE-CJU-GDA-182-19, published in Official Gazette No. 6.462 Extraordinary, dated 07/01/2019 that contains Venezuelan Aeronautical Regulation 277 (RAV 277), called “Aeronautical Meteorological Service” was revoked. (Official Gazette of 11/11/2024, 11/20/2024, and 11/21/2024. Administrative Rulings No. PRE-CJU-346-24, No. PRE-CJU-GDA-411- 24, and No. PRE-CJU-GDA-412-24. Entry into force: Upon publication in the Official Gazette).

Miscellaneous

The National Assembly issued the Law that Approves the “Agreement between the government of the Bolivarian Republic of Venezuela and the government of the People’s Republic of China relating to the Promotion and Protection of Investments”, the purpose of which is to establish, maintain, and consolidate a juridical framework that facilitates and promotes direct reciprocal cross-border investments made by investors of the contracting parties, with the purpose of promoting both countries’ productive development. (Official Gazette No. 6.852 Extraordinary of 11/13/2024). The National Assembly issued the Law of Audit, Regularization, Actions and Financing of Non-governmental Organizations and Notfor-Profit Social Organizations. Article 67 of the Law of Registries and Notaries’ Offices is repealed. All provisions that are contrary to this Law are repealed. (Official Gazette No. 6.855 Extraordinary of 11/15/2024. Entry into force: Upon publication in the Official Gazette).

The Ministry of the Popular Power for Transportation established the minimum and maximum rates for urban transportation service. Likewise, it established the maximum official rate for suburban routes nationwide to be charged by the providers of the public service of ground passenger transportation. The Official Request published in Official Gazette of 03/19/2024 and Resolution No. 014, published in Official Gazette of 03/19/2024, were revoked. (Official Gazette of 11/22/2024. Official Request and Resolution No. 049. Entry into force: As from December 1, 2024). The National Assembly issued the Simón Bolívar Organic Law against Imperialist Blockade and for Defense of the Bolivarian Republic of Venezuela. All legal or sublegal rules that conflict with the Law are repealed. (Official Gazette No. 6.859 Extraordinary of 11/29/2014. Entry into force: Upon publication in the Official Gazette).

Banking and Finance

The Venezuelan Central Bank (VCB) established the interest rates applicable to obligations derived from employment relationships (59.26% and 47.63% - August 2024; 59.23% and 47.62% - September 2024) and to transactions with credit cards (60.00% annual maximum lending rate and 17.00% annual minimum lending rate - September and October 2024). (Official Gazette of 10/29/2024. Official Notices. Entry into force: Upon publication in the Official Gazette). BANKING AND FINANCE TAX Bonded Warehouse Regime and not used, must be delivered to the Regional Management, Sector or Unit of Internal Taxes of the domicile of the taxpayer for destruction; 4) the liquor warranty seals identified with designation F-07-2015 or years preceding 2015 that are in SENIAT’s custody must be destroyed in accordance with the procedures established in the rules that govern the matter. (Official Gazette of 10/08/2024. Administrative Ruling SNAT/2024/000098. Entry into force: Upon publication in the Official Gazette).

Tax

The National Integrated Service of Customs and Tax Administration (Servicio Nacional Integrado de Administración Aduanera y Tributaria - SENIAT) issued an Administrative Ruling with the purpose of regulating the use and period of effectiveness of the Warranty Seals to be placed on the Taxed Species of National and Imported Production.
Said Ruling established:
1) the liquor warranty seals acquired by the producers or importers of taxed species may not be transferred, assigned or sold;
2) the liquor warranty seals the issue and circulation of which is authorized by SENIAT may be used for a period of two years as from the date of acquisition;
3) the liquor warranty seals identified with designation F-07-2015 or years preceding 2015, acquired under the Bonded Warehouse Regime and not used, must be delivered to the Regional Management, Sector or Unit of Internal Taxes of the domicile of the taxpayer for destruction;
4) the liquor warranty seals identified with designation F-07-2015 or years preceding 2015 that are in SENIAT’s custody must be destroyed in accordance with the procedures established in the rules that govern the matter. (Official Gazette of 10/08/2024. Administrative Ruling SNAT/2024/000098. Entry into force: Upon publication in the Official Gazette).

Civil Aeronautics

The Ministries of the Popular Power for Ecosocialism and for Transportation issued the rules to coordinate the environmental management in the civil aeronautics activity carried out at the national and international airfields and airports of the Bolivarian Republic of Venezuela. (Official Gazette of 10/11/2024. Joint Resolution. Entry into force: Upon publication in the Official Gazette).

Miscellaneous

The Autonomous Service of Registries and Notaries’ Offices (Servicio Autónomo de Registros y Notarías - SAREN) issued an Administrative Ruling with the purpose of regulating the implementation of electronic means in the processes carried out by the SAREN, in order to optimize the service of registries and notaries’ offices, in relation to the verification of the identity of the executing parties, through the biometric analysis of the user identification elements, in the framework of the electronic handling of the registry and notary processes carried out by said Service. The implementation of fingerprint biometry electronic means will be progressively applied, starting at the notaries’ offices located in the capital region. (Official Gazette of 10/17/2024. Administrative Ruling No. 525. Entry into force: Upon publication in the Official Gazette).

Banking and Finance

Paraguay reaches investment grade for the first time in its history

The risk rating agency Moody's announced that it raised Paraguay's credit rating from Ba1 to Baa3, granting it investment grade for the first time in its history, reported the Ministry of Economy and Finance (MEF) on past July 24, 2024. Paraguay joins a select group of countries in the region to have the sovereign degree, Chile, Colombia, Mexico and Peru.

In a statement, they indicated that this stable outlook is reached after 26 years when the rating agency assigned a rating to Paraguay for the first time and after 9 years since the last upward review. "This unprecedented achievement is based on the country's solid economic fundamentals and its long history of macroeconomic stability," the MEF said.

They claim that it is the result of more than 20 years of responsible, consistent and predictable public policies. Prudent management of macroeconomic policies was able to achieve and preserve the sustainability of public finances and maintain low inflation

Tax

Agreement between Paraguay and Spain to avoid double taxation finally in force

After ratification by Paraguayan Law Nr. 7.271/2024 and publication in the Official bulletin of the Spanish Kingdom on July 29, 2024, said important agreement for the economic relationships between both countries shall be in force starting October 14, 2024, having effect for all tax purposes since January 1, 2025.

The agreement comprehends the Personal Income Tax, Corporate Tax and Non Resident income taxes in both countries (the so called IRP, IRE and IDU, and INR in Paraguay and IRPF, IS and IRNR in Spain) document observes OECD standards and includes measures to prevent tax base erosion and profit shifting (BEPS), affecting to Personal and Company income taxes in both countries (including income taxes for non-residents), which must now be ratified by the respective Congresses for its entry into force. Model Tax Convention on Income and on Capital 2017 shall be applicable for the interpretation of articles 5 (permanent establishment) and 7 (entrepreneurial benefits) of said Agreement.

Energy

Amendment of Law "On the Independent Production and Transmission of Electric Energy (PTIEE)"

On August 20224 Law No. 7299/2024 that amend Law Nr. 3009/2006 was enacted to foster private investments for the generation of renewable electricity through small hydroelectric plants (SHPs), by introducing correction of concepts that blocked the previous legislation to be applicable and improving the legal framework, by extending the threshold to grant licenses up to 50 MW and generation greater than 50MW should be subject to international public tenders, without the requirement of a risk-sharing contract with the national utility company (ANDE) as stated in the previous Law, although it retains a first call right to acquire the energy generated in case it is not exported or it is needed in the internal market.

Among other changes, the Ministry of Public Works and Communications replaced a Council of several Ministries (MOPC, Environment, Industry and Trade, Foreign Affairs) that made the procedure very bureaucratic. It must be clarified that shall Law is only applicable for the generation of electricity from the use of natural gas and/or minor hydroelectric generation, which also includes cogenerators and self-generators. This Law does not apply to other renewable energies (solar, wind) governed by Law No. 6977/2023, on Non-Conventional Renewable Energies (NCRE).

Public Procurement

Enactment of Decree Nr. 2264/2024, which regulates Law No. 7021 of December 9, 2022, "On Public Supply and Procurement".

This decree imposes a significant advance in what has to do with administrative management in public procurement. It seeks to improve efficiency, transparency and all flexibility in everything that has to do with public procurement processes. There are updates in terms of terminology, structure, facilitating reading and limiting the search for information and providing greater clarity to the management of State procurement, reducing the deadlines that have to do with protests, reconsideration appeals and deadlines for responses from public institutions to the DNCP.

A special type of bidding that he highlighted is joint procurement, which he described as an innovation in public procurement. It consists of public institutions coming together to buy goods or services, in search of efficiency through the implementation of economies of scale and administrative standardization. The annual average of the awards is USD 3.246 million, with 9.513 procedures and 3.266 suppliers.