Business location factors: government aid

The government can help a company finance the project, support in setting up the factory and provide training for the new workforce, help to obtain cheaper loans or lower tax rates (for the land, profits….) or asked for fewer regulation (less environmental laws…).

When there have been large numbers of job losses in an area which has undergone deindustrialization, the government and the EU for example, will often intervene to improve the environment and quality of life for local people. In those cases, industry is actively encouraged to locate in areas of low employment with incentives such as grants, subsidies, and low rents.

The countries of Eastern Europe (Romania, Poland, Slovenia, Czech Republic and Slovakia) for example, after 2004 have benefited from joining the EU. They are technologically undeveloped industries are receiving substantial aid to restructure and become more competitive. 

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