GRW Funding – how companies in economically disadvantaged regions can receive investment grants

The GRW grant is a non-repayable government investment grant for businesses and is one of the most important instruments of regional development in Germany. Depending on the size and location of the business, grants of up to 35% of eligible investment costs are available.

The program can be an important source of financial support, particularly for production facilities, expansions, or modernizations. Find out which projects are eligible, what requirements apply, and what you should keep in mind when submitting your application.

What is the GRW grant?

The GRW (Gemeinschaftsaufgabe „Verbesserung der Regionalen Wirtschaftsstruktur“) is one of Germany’s most significant investment support programs. It supports companies and municipalities in making investments in selected eligible regions. Its goal is to strengthen economically weaker regions, create new jobs, secure existing employment, and increase the competitiveness of the regional economy. In addition, the funding is intended to support companies in navigating transformation processes such as digitalization, decarbonization, and structural change.

Funding is awarded exclusively in designated GRW eligible areas. These areas are regularly reviewed and determined based on economic indicators such as unemployment, income levels, and regional economic strength. An overview of the current GRW funding areas can be found here: GRW Funding areas 2022–2027.

What types of investments does the GRW support?

The GRW supports companies with investment grants for eligible investment projects. Eligible projects include, among others:

1. Construction of new business premises
   
   • Construction of new production sites
   • Establishment of new businesses
   • Expansion of existing sites
     
     
     
2. Expansion investments
   • Expansion of production capacity
   • Expansion of warehouse and logistics space
   • Capacity increases at existing facilities
   
   
   
3. Diversification investments
   
   • Introduction of new products
   • Development of new business areas
   • Expansion into new markets
   
   
   
4. Major operational modernization
   
   • Technological modernization
   • Automation
   • Digitization of Production Processes

Eligible costs typically include

• Land (in part)
• Buildings and structures
• Machinery and technical equipment
• Operating and office equipment
• Intangible assets (e.g. software, patents, licenses)
• Some incidental investment costs

Which companies are eligible to apply for GRW funding?

GRW funding is primarily intended for small and medium-sized enterprises (SMEs) with up to 249 employees and an annual revenue of up to 50 million euros or a balance sheet total of up to 43 million euros. Large enterprises may also be eligible for funding under certain conditions, though typically with lower funding rates and additional restrictions under state aid law.

The funding is particularly attractive for companies in the following sectors:

• Industry and manufacturing
• Manufacturing
• Logistics
• Tourism
• Business-related services
• Future-oriented and transformative industries

What are the funding rate and funding amount for the GRW?

The amount of GRW funding depends on the size of the company, the location of the investment, and the type of investment project. Typical investment grants for companies generally fall within the following ranges:

• Small businesses: up to 35%
• Medium-sized companies: up to 25%
• Large companies: up to 15%

In regions with particularly strong funding support, higher funding intensities may be possible in some cases. The potential investment grants thus range from several tens of thousands of euros to the tens of millions. This makes the GRW one of the most attractive non-repayable investment grants for companies in Germany.

For example, a medium-sized mechanical engineering company investing 2 million euros in a new production facility in a GRW funding area could receive up to 500,000 euros in investment grants at a funding rate of 25%.

What are the benefits of the GRW investment grant?

• Non-repayable grant
• High funding amounts
• Combination with other funding programs
• Support for transformation processes

What should you keep in mind and what are common mistakes?

Do not start the project prematurely

Do not begin your investment project until the eligibility requirements for funding have been met. Starting the project too early can result in the loss of funding.

Check the funding area

Not every business location is situated in a GRW funding area. Therefore, check early on whether your investment project will be implemented in an eligible region.

Carefully draft the project description

Describe your investment project in a clear and comprehensible manner. An incomplete or unclear project description may delay or jeopardize approval.

Take state aid regulations into account

The GRW is subject to European state aid regulations. Any funding already received may affect the maximum allowable amount of funding.

Plan for documentation requirements

Investments, expenses, and project progress must be documented throughout the entire funding period. Complete documentation facilitates the payment of funds and helps avoid recovery claims.

GRW funding with EurA AG

Applying for and drawing down GRW funding is a complex process. With professional funding consulting, you can determine early on whether your project meets the eligibility requirements and what funding rate is possible.

It’s also worth exploring other funding programs in Germany, as additional programs may be available depending on your investment project.

EurA guides you through the entire funding process - from assessing the eligible region and possible combinations with other funding sources, through the application process, to project support, payment of funds, and change management after the project has been approved.

Conclusion

The GRW funding program is one of the most attractive investment support programs in Germany, particularly for investment projects in the new federal states. Companies can receive grants of up to 35% of their investment costs, thereby gaining significant competitive advantages. At the same time, the program requires careful planning, compliance with state aid regulations, and a professionally prepared application in order to fully capitalize on the funding opportunities.

Text: Jan Bernlöhr