Subsidies

Subsidies are government financial support programs that boost corporate profit margins. They are enacted through legislation and represent a legislature's decision to support specific industries — domestically, or for any corporation operating in the territory.

What a Subsidy Does

Each active subsidy provides a +15 percentage point profit margin bonus to every qualifying corporation sector. This bonus applies directly to the sector's effective margin before it is capped at 100%.

Subsidies are not a one-time payment — they persist as active policy until explicitly terminated by another bill, providing a continuous margin boost every turn.

Enacting a Subsidy

Subsidies are created through the legislation system. A bill containing a subsidy provision, when passed and enacted, creates or updates a subsidy record.

The key parameters in a subsidy provision:

Parameter	Options	Effect
Scope	`national` or `state`	Whether the subsidy covers an entire country or a single state
Scope type	`economy_wide` or `sector`	Whether all sectors qualify or only a specific sector type
Target sector	e.g. `extraction`, `healthcare`	Only used when scope type is `sector`
Target strategy	e.g. `oil_gas`, `iron_mining`	Optional; further restricts to sectors using a specific operating strategy
Domestic only	`true` or `false`	If true, only corporations headquartered in the territory qualify

Re-enacting the same combination of parameters (scope, scope type, target sector, target strategy) updates the existing subsidy rather than creating a duplicate.

Qualification Rules

A corporation sector qualifies for a subsidy if it passes all four filters:

1. Territory filter

For a national subsidy: the sector must be operating in that country.
For a state subsidy: the sector must be physically located in that specific state.

2. Sector type filter

If the subsidy targets a specific sector type (sector scope), the sector's type must match.
Economy-wide subsidies skip this check.

3. Strategy filter (optional)

If the subsidy specifies a required strategy, the sector's active operating strategy must match.
Sectors using the default standard strategy are checked against "standard".

4. Domestic-only filter

If domesticOnly: true, the corporation's headquarters must be in the subsidized territory.
- National subsidy: corporation's country must match.
- State subsidy: corporation's headquarters state must match.
If domesticOnly: false, foreign corporations operating in the territory also qualify.

Stacking Rules

Multiple subsidies can apply to the same sector, and their bonuses stack additively:

Active subsidies	Total margin bonus
1 federal economy-wide	+15pp
1 state sector subsidy	+15pp
1 federal + 1 state (same sector)	+30pp
1 federal economy-wide + 1 federal sector	+30pp

Important: Multiple subsidies of the same exact scope and type do not stack — re-enacting the same provision overwrites the existing record rather than creating a second one. But a federal economy-wide subsidy and a federal sector-specific subsidy for the same sector do stack (they are different records). A federal subsidy and a state subsidy also stack freely, since they are different scope levels.

Stacking example

A pharmaceutical company with healthcare sectors in Germany qualifies for:

A Germany-wide economy-wide subsidy: +15pp
A Germany healthcare sector subsidy: +15pp
A Bavaria healthcare sector subsidy (if operating in Bavaria): +15pp

Total margin bonus: +45pp — a substantial boost that can make the difference between a marginal and highly profitable operation.

Ending a Subsidy

An end_subsidy provision in a new bill marks the matching subsidy as active: false. The record is preserved for historical audit purposes but no longer applies to margin calculations.

Subsidy termination takes effect the turn the enacting bill is processed.

Domestic vs. Foreign Targeting

The domesticOnly flag is the primary tool for targeting subsidies at home-country corporations:

domesticOnly: false (default): Any corporation operating in the territory qualifies, including foreign-headquartered corporations. This boosts all extraction or manufacturing in a territory regardless of where the profits ultimately flow.

domesticOnly: true: Only corporations headquartered in the territory (or the specific state) qualify. This is the standard approach for industrial policy aimed at protecting or growing national champions.

Combined with tariffs (which penalize foreign corporations), a legislature can create a two-sided policy: domestic corporations get subsidies while foreign competitors face margin penalties.

Integration with Turn Processing

Subsidy margin modifiers are calculated during sector processing each turn:

All active subsidies for the relevant country are loaded.
For each corporation sector, the system checks every subsidy against all four qualification filters.
Qualifying subsidies are summed: each adds +15pp to the total margin modifier.
The modifier is added to the sector's base profit margin before the 100% cap is applied.

The calculation runs as part of the corporation turn phase — see Corporations for the broader context of how margins affect revenue and sector health.

Viewing Active Subsidies

Active subsidies are visible in the national Congress view and in the legislation history for the enacting bill. Each subsidy's scope, target, and domestic-only flag are displayed, along with the bill that created it.

Tariffs — The counterpart to subsidies: margin penalties imposed on foreign corporations operating in your territory
Bills & Legislation — How subsidy provisions get enacted into law
Corporations — How profit margins affect sector revenue and corporate performance
Resources — Extraction-sector subsidies are especially effective for resource-rich states