GRW: investment grants for assisted regions.

1. What is GRW?

The purpose of the programme and how responsibilities are split between the federal level and the Länder.

GRW is the sharpest instrument of German regional policy. Its goal is to strengthen economic power in regions with special structural need. The federal government and the Länder share the financing equally and jointly set the binding rulebook (the Koordinierungsrahmen), which prevents a subsidy race between regions. The Länder, which know local conditions best, select the projects and run the funding. From 1 January 2026 the framework has been streamlined, with simpler conditions and stronger incentives for SMEs and innovation in weak regions.

2. What it funds

The three core funding objects and the wage-cost alternative.

The core objects of funding are commercial investments (building or expanding a business site), business-related infrastructure, and networking and cooperation measures. For commercial investments, you can choose the basis: either the physical investment costs, or, as an alternative, the wage costs of newly created jobs over a two-year period. The wage-cost route is attractive for personnel-intensive growth phases. From 2026 the Länder can also, on a model basis until the end of 2026, use GRW funds to make a location more attractive and to secure regional services of general interest.

3. Who can apply and where

The eligibility test and the geographic restriction that decides whether you qualify at all.

Companies of the commercial economy can apply if the business site is located within a GRW assisted area. The current map (in force since 1 January 2022) covers all eastern German regions except parts of Berlin, plus designated areas in the west, including old-industrial regions such as the Ruhr area. A central condition since 2023 is that the investment must promise significant regional economic effects, demonstrated either by an increased investment volume or by the creation of additional permanent jobs.

4. How much you get

How the rate is set and why two identical projects can receive very different grants.

The maximum rates are differentiated by two factors: the status of the region (its level of economic development, expressed as a C or D assisted area) and the size of the company. Investments in C areas are funded more strongly than in D areas, and smaller companies receive higher rates than large ones. The headline maximum is around 45 percent for small enterprises in the strongest assisted areas; large companies and D areas receive considerably less. Because the rate is location- and size-specific, you should check the rate for your exact site before planning.

5. How to apply and conditions

The timing rule and the practical conditions attached to the grant.

As with most grants, the application must be filed before the investment begins, with the Land's funding bank or economic-development body. The project must be carried out within 36 months. The funded site and jobs normally have to be maintained for a defined retention period after completion. GRW is a partnership: the company delivers jobs and regional value creation, and the state contributes capital.

6. Notes

How GRW relates to other instruments.

GRW funds investment, not research, so it sits alongside R&D instruments rather than competing with them. It can be combined with R&D funding and with the Forschungszulage, subject to the general rule that the same costs cannot be funded twice and that total aid stays within EU state-aid intensity limits. As state aid, GRW also requires that the company is not a "company in difficulty".

7. What counts as eligible investment

GRW funds the act of investing in a region, in one of five recognised project types.

An eligible project is a new establishment, an extension of an existing one, a diversification into new products, a fundamental change of the production process, or the acquisition of a closed or threatened establishment. For the eligible costs you choose one of two bases: the fixed-asset investment (land, buildings, machinery and intangibles) or, alternatively, the wage costs of the newly created jobs over two years — whichever is more valuable for your project. You must contribute at least 25% of the eligible costs from funds free of any public support.

8. Rates, assisted areas and company size

The rate depends on where you invest and how big you are, and the published figures are ceilings.

GRW only funds investment inside a designated assisted area (a C- or D-area) under the 2022–2027 map. The maximum rates are federal ceilings: each Land sets the actual rate within them and administers the programme through its development bank. Small enterprises (under 50 employees, turnover or balance sheet up to €10m) receive the highest ceilings, medium enterprises mid ceilings, and large enterprises the lowest — fundable only in C-areas, and excluded from the main strand in D-areas. The rate also reflects the project's structural effects for the region.

9. The timing rule and how to apply

Apply before you start, through your Land's development bank.

You must apply before the project starts; signing a binding supply or works contract counts as starting and forfeits the grant. Applications go to the development bank or economics ministry of the Land where the establishment sits (for example IBB, ILB, SAB, NRW.BANK or NBank). Two substantive tests apply: the primary effect (more than half the establishment's output is sold supra-regionally) and a significant regional effect (additional permanent jobs, an elevated investment volume, or a labour-productivity increase of at least 10%). A reform in force from 1 January 2026 simplified access, replaced the old positive list of eligible sectors with a clearer non-eligible list, and added a productivity-based route.

10. Common mistakes and FAQ

The errors that most often cost a GRW applicant, and quick answers.

• Signing a supply or works contract, or starting the investment, before the application is in.
• Investing at a site outside a designated assisted area, which cannot be funded.
• A large enterprise expecting funding in a D-area, where it is excluded from the main strand.
• Overlooking the regional-effect requirement, or treating a published ceiling as the rate your Land will actually pay.

Is it a grant or a loan? A non-repayable investment grant; no interest, no equity given up.

Who administers it? The Länder, through their development banks, within a federal coordination framework.

Can it be combined with R&D funding? Yes. GRW funds investment, not research, so it sits alongside instruments such as ZIM or the Forschungszulage, subject to the general cumulation rules and not on the same costs.

11. Asset base or wage-cost base, the choice that changes the grant

GRW gives a genuine choice of what to calculate the grant on, and the two routes can produce very different amounts for the same project.

Under the asset route, the grant is calculated on the fixed-asset investment, the land, buildings, machinery and intangibles of the project. Under the wage-cost route (lohnkostenbezogene Förderung), it is calculated instead on the gross wage costs of the jobs the investment directly creates, over a two-year period. A capital-intensive plant usually scores higher on the asset base; a labour-intensive project that creates many jobs on a modest capital outlay can be worth far more on the wage-cost base. Because the two can diverge sharply, the choice is worth modelling rather than defaulting. Two further rules shape it: intangible assets (patents, licences, know-how) are eligible within limits and must be used only in the funded establishment, and second-hand assets are eligible only under defined conditions. Whichever base you use, you contribute at least 25% of eligible costs free of public funding and keep the assets in the establishment for the retention period, generally five years.

12. Industry examples

GRW funds the act of investing in a structurally weak region, across most of the commercial economy. These are illustrative project shapes, not named beneficiaries.

• A new production plant built in a designated assisted area, funded on the fixed-asset base (new establishment).
• A capacity extension of an existing site that adds permanent jobs (extension).
• A diversification into a new product line that takes the site into a new market (diversification).
• A fundamental process change that modernises how the establishment produces, beyond mere replacement.
• A labour-intensive operation, for example a distribution or service centre, where the wage-cost base yields the larger grant.
• The acquisition of a closed or threatened establishment, keeping capacity and jobs in the region.

13. What to prepare

The exact document set is specified by the Land bank; this is the typical core, and the application must be in before the investment begins.

For the application: a project and investment description (what is being built or bought, where, and what it changes for the establishment); a cost and financing plan showing the eligible investment (asset base) or the wage costs of new jobs (wage-cost base), the funding sources, and proof of the 25% own contribution free of public funds; evidence of the primary effect (that more than 50% of the establishment's output by revenue is sold supra-regionally); evidence of the regional effect (additional permanent jobs, the elevated investment volume, or the calculation supporting a 10% or greater productivity increase); company information establishing the size category and the location in the assisted area; and sector evidence that the activity is not on the non-eligible list.

During and after the project: proof-of-use documentation (Verwendungsnachweis) with evidence of the incurred costs; records that the funded assets remain in the establishment through the retention period; and records sufficient for a possible audit (the EU requires aid records to be kept for ten years).

See the full program page: GRW