Yes, two or more partners from the same country can participate in a project, provided the minimum criteria are met. The legally binding documents (Rules for Participation and Work Programme) state the rule of "at least 3 independent legal entities, each of which is established in a MS or AC, and no two of which are established in the same MS or AC". This does not mean that only 1 partner per country can participate. However, as always, only partners who are necessary to conduct the work proposed should be included in the consortium.