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Coronavirus - State Aid for entrepreneurs and employees – Czech Republic

  • Czech Republic
  • Coronavirus - Country overview
  • Coronavirus - Trade and State Aid issues

06-11-2020

We provide an overview of state support for entrepreneurs and employees in connection with Covid-19.

State Aid: Antivirus Mode A, Mode A (Plus)

This contribution is intended for companies which have been forced to restrict operations and quarantine employees.

Mode A

The contribution to employers is 80% of the paid wage compensation, including social and health insurance contributions (max. CZK 39,000 per employee and month). The program will end on 31 October 2020.

Mode A (Plus)

For the period from 1 October 2020, the contribution to employers is 100% of the paid wage compensation, including social and health insurance contributions (max. CZK 50,000 per employee and month). The contribution for quarantined employees remains only 80% of the paid wage compensation. The program will end on 31 December 2020.

State Aid: Antivirus Mode B

The contribution is intended for companies that have been indirectly affected by the coronavirus crisis. For example, their demand for products or services has fallen, or the supply of inputs needed for their production has fallen.

Employers can apply for a contribution in the amount of 60% of the paid wage compensation, including social and health insurance contributions, max. CZK 29,000 per employee and month. The program will end on 31 December 2020.

State Aid: Crisis Care Benefits

The Chamber of Deputies approved the bill on crisis care benefits. If the bill is approved by the Senate and the President, an employee will be entitled to benefits if they cannot work due to the need to care for a child under 10 years of age, dependent children (up to 26 years of age) participating in school attendance and depending on the care of another person (from grade I), persons older than 10 years of age depending on the care of another person using the services of day care centers and similar facilities, children who cannot attend classes due to a family member with ordered quarantine.

Persons working on the basis of an agreement to perform work (DPČ) or agreement to complete a job (DPP) will also be entitled to care benefits if their social insurance has been paid for the previous three months. Employees will be able to receive care benefits for the whole duration of the emergency measures. The amount of the care benefit will be 70% of the daily assessment basis, but at least CZK 400 per day. In order to receive the care benefit, confirmation of the school’s closure will no longer be required, which will be replaced by the employee's affidavit.

State Aid: Compensation Bonus

The Chamber of Deputies has also approved a compensation bonus of CZK 500 for each day in the period from 5 October to 4 November 2020. The bill has yet to be approved by the Senate and the President.

The bonus is intended for the self-employed; natural persons who are shareholders of a limited liability company (s.r.o.), which has only 2 shareholders or all the shareholders are members of one family; and persons working on the basis of an agreement to perform work (DPČ) or agreement to complete a job (DPP) and are participating in the health insurance system.

State Aid: COVID – Rent II

This is a continuation of the subsidy program to support entrepreneurs who are banned or restricted from selling or providing services on leased premises as a result of the "anti-Covid" measures.

State aid amounts to 50% of the rent for July to September 2020 and can be provided up to a maximum of CZK 10 million per beneficiary (the limit does not include support received for rent from April to June 2020). Unlike the first decree, the landlord's participation in the form of a discount on rent is no longer required.

Applications for subsidies can be submitted from 21 October 2020 to 21 January 2021. Details of the program can be found in our Covid-19 Rent Subsidy Support briefing.

State Aid: COVID – Culture II

The program is aimed at both entrepreneurs in the field of culture and the performers themselves.

Entities operating in the field of culture may apply for support:

a) in the amount of 50% for eligible expenses incurred in connection with the organization of cancelled or relocated cultural events, which were to take place in the period from 10 March 2020 to 31 December 2020

b) in the amount of 80% for eligible expenses of business entities whose continuous activity in the field of culture was limited, relating to the period from 1 March 2020 to 31 December 2020

Performing artists and practitioners of professional artistic and technical professions in the fields of music, theatre and dance may apply for a one-time state contribution of CZK 60,000. Details of the program can be in our Covid-19 Culture Support briefing.

State Aid: COVID – Sport II

The program is designed to support entrepreneurs in the field of sports. Sports clubs from the ten most important professional league competitions will be able to apply for support.

The second group will consist of the organizers of sports events, which had to be postponed or completely cancelled. According to the analysis of economic intensity, the support of sports clubs will cover 8 - 10% of the total costs of these league competitions, up to a maximum of CZK 12.5 million. The support of organizers of sports events will reach a maximum of 50% of eligible costs, a max. of CZK 10 million per business entity.

State Aid: COVID – Bus

This is a program to support entrepreneurs in irregular bus transport, i.e. bus carriers who provide, for example, transport to school events, tours, etc. The amount of support will depend on the emission class of the operated bus and the capacity of its seats. Receipt of applications begins on 26 October 2020 at 00:00 and will end on 25 November 2020.

State Aid: COVID – Accommodation

The subsidy is intended for operators of collective accommodation establishments in the Czech Republic affected by the consequences of measures related to the COVID-19 pandemic in the period from 14 March 2020 to 24 May 2020. The subsidy can be requested until 30 October 2020.

State Aid: COVID – Tourism support

At the end of October, the Ministry of Regional Development will announce a new subsidy program for travel agencies and guides.

Travel agencies will receive from the state a maximum of 2.75% of the planned revenues for this year (from the sale of tours and tourism services). Travel agencies will receive a subsidy according to the number of trips, namely CZK 500 for a trip cancelled due to the pandemic that the client bought (concluded a trip contract) in the period from 1 December 2019 to 1 October 2020. They will receive the same amount for cancelled stays in the spa during the of closure of spa facilities.

The so-called incoming agencies - focused on guests coming to the Czech Republic - can receive a subsidy of up to CZK 50,000 if the specified conditions are met. Tourist guides will be able to request the same amount.

State Aid: COVID III Guarantee program

The aim of the program is to support entrepreneurs with up to 500 employees whose economic activities are limited due to the occurrence of Covid-19 and related preventive measures through guarantees for operating bank loans. State aid (portfolio guarantee) applies to operating loans up to CZK 50 million, which will be provided until 31 December 2020. Companies with up to 250 employees can apply for an operating loan of up to 90% of the principal of the guaranteed loan, up to a maximum of CZK 45 million. Businesses with up to 500 employees can obtain a loan of up to 80% of the principal of the guaranteed loan, up to a maximum of CZK 40 million. The duration of guarantee in both cases is a maximum of three years.

State Aid: COVID Plus Guarantee program

The aim of this support guarantee program is to support businesses and strengthen the liquidity of large export companies (whose exports in 2019 represented for at least 20% of the company's total sales) and their suppliers with more than 250 employees affected by the economic impact of Covid-19. The financing is supported by a guarantee from the state Export Guarantee and Insurance Company, a.s. (EGAP) for loan repayment obligations to the financing bank. The amount of the loan may be up to 25% of the company's total turnover in 2019. The loan may range from CZK 5 million to CZK 2 billion (per borrower or per economically connected group, if the borrower is a member). The loan can be provided until the end of 2020. The maximum amount of the EGAP guarantee is 80%.

Our experienced colleagues are at your disposal in the Czech Republic and Slovakia, and will be happy to assist with all State Aid matters .

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