State aid

State aid: Legal advice on permissible and impermissible state aid

Government support to companies, for example through subsidies, guarantees, capital provision, or land transactions, can lead to distortion of competition. State aid law is intended to combat unfair advantages. The rules are complex but also provide opportunities for businesses and governments, provided they are applied carefully. 

What is state aid? 

State aid occurs when a company receives an advantage from the government that is not in line with market conditions and thus distorts competition. This can manifest as: 

• Subsidies or other financial contributions; 
• Guarantees or warranties; 
• Land transactions below market price; 
• Capital participations or loans on favorable terms. 

In principle, state aid may only be granted after approval from the European Commission, unless the aid falls under an exemption scheme or relates to so-called services of general economic interest (SGEIs). 

What are the risks? 

If state aid is granted unlawfully, it can have serious consequences: 

• The aid must be repaid with interest; 
• Agreements may be declared wholly or partially null and void; 
• Legal proceedings may follow in the national courts or the Court of Justice of the EU. 

Both governments and businesses must therefore be vigilant about the legal admissibility of aid measures. 

What can we do for you? 

Our specialists advise governments, market parties, and partnerships in various areas including: 

• The legal structuring of aid measures (such as subsidies, guarantees, loans, or equity stakes); 
• Drafting contracts with state aid aspects; 
• Reporting aid to the European Commission or making notifications based on (group) exemptions; 
• Challenging unlawful aid provisions; 
• Proceedings regarding the recovery of state aid;
• Issues concerning state aid in land transactions, area development, or the energy transition. 

Strategically and legally strong 

State aid is a legally and politically sensitive area. Our combination of administrative law and European expertise enables us to clearly analyze and strategically strengthen your position. 

Do you have questions about state aid or are you unsure about the legality of a measure? Contact our specialists.