Finance and funding



Governments across the world have offered financial assistance to help businesses cope with the economic effects of COVID-19. This might be in the form of loans, grants, or tax assistance. At the EU level, provision has been made for State aid that is related to the impact of the pandemic, as well as funding support for Member States. Below, our experts consider the initiatives in each of their countries.

Please do not hesitate to get in touch with the authors or your usual Osborne Clarke contact if you have any questions or would like to discuss these initiatives further.

Explore: Finance and Funding

Businesses in Belgium are able to benefit from financial assistance measures. These have been put in place at the regional level and the amounts and conditions vary accordingly, between:

The Brussels region

Flanders region

Walloon region

We discuss these measures below. For more, see our COVID-19 Insights page.


Marie Canivet, Partner, Belgium
T +32 2 515 9376

Olivier Lambillon, Counsel, Belgium
T +32 2 515 93 34
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The measures that have been put in place in Belgium are mainly at the regional (Brussels, Flanders and Walloon) level.

Brussels region

The Brussels Region has provided for COVID-19 compensation of €4,000 for businesses forced to close and a one-off premium of €2,000 will be allocated to businesses not entitled to the COVID-19 compensation. In addition:

  • Cash-flow support totalling €20 million has been made available for affected companies through the granting of public guarantees, via the Brussels Guarantee Fund, on bank loans;
  • A moratorium has been put in place on the capital repayment of loans granted by Finance&invest to affected companies;
  • There has been an increase of €200,000 for the budget of the Centre for Businesses in Difficulty; and
  • Special measures have been introduced for cultural, hospitality/tourism, and social economy and service voucher sectors.

Flanders region

The Flanders Region has provided for two types of COVID-19 compensation payments of €4,000 or €2,000, and a one-off premium of €3,000 for businesses not entitled to the COVID-19 compensation. In addition:

  • Flemish companies may benefit from a bridging loan guaranteed by the Flemish agency PMV for existing non-bank debts up to 12 months and up to a maximum amount of €1.5 million with a premium of 0.25% per annum (instead of 0.5%); and
  • Additional budget and special measures have been provided for the tourism sector.

Walloon region

The Walloon Region has provided for a COVID-19 compensation payment of €5,000. In addition:

  • Additional guarantees have been provded on short-term credit lines and investment credits may be granted by Walloon regional agencies;
  • Loans without private counterpart for a maximum amount of €200,000 with a grace period of one year and a fixed interest rate of 2% may be granted by Walloon agencies;
  • An emergency loan to support the cash flows of cultural and creative enterprises has been launched; and
  • The staggered payment of water bills may be permitted for Walloon companies encountering financial problems.

Federal level

At the federal level, a deal has been negotiated with the financial sector comprising the deferral of payment of credit lines until 30 September 2020 without charge and the activation of a guarantee scheme (bridge credit facility) for new loans and credit lines.

Brussels region

The Brussels €4,000 payment is available to businesses operating in Brussels that are obliged to close and are active in one of the sectors specifically listed in the Brussels Government Decree (including catering, accommodation, retail trade with the exception of food stores, pharmacies, press outlets, and service stations)

The €2,000 one-off premium is only available to small businesses (with a maximum of five full-time employees) and to self-employed workers who were not obliged to close but whose activities have been heavily affected by the COVID-crisis.

Flanders region

The Flemish €4,000 payment is available to businesses operating in Flanders which are forced to close (completely or partially) during the week while the lower €2,000 indemnity is allocated to companies that are forced to close during the weekend, in either case as a consequence of the measures taken by the Belgian state in order to limit the spread of the coronavirus.

The €3,000 Flemish premium is available to businesses that are allowed to continue working but have a turnover loss of at least 60% for the period of 15 March 2020 until 30 April 2020, compared to the same period in 2019, or for new businesses that were not active in 2019 on the basis of their financial plan.

Walloon region

The Walloon €5,000 payment is available to small and very small enterprises, and to the self-employed , active in one of the sectors specifically listed in the Walloon government decree (including catering, accommodation, retail trade with the exception of food stores, pharmacies, press outlets, and service stations) and which have been completely closed or which have ceased operating as a result of measures taken to limit the spread of coronavirus.

Federal level

The federal-level deferral of payment of credits can be requested by companies permanently based in Belgium if the coronavirus crisis causes payment difficulties. In addition:

  • The business concerned must have had no outstanding instalments relating to credits, taxes or social security contribution as at 1 February 2020;
  • Any outstanding instalments as at 29 February 2020 must be no more than 30 days overdue;
  • The business must have fulfilled all its contractual credit obligations with all banks during the 12 months ending 31 January 2020; and
  • The business must not be in the process of active credit restructuring.

The federal-level guarantee scheme is for non-financial institutions, small and medium-sized enterprises and self-employed workers, provided that:

  • The business concerned had no outstanding instalments as at 1 February 2020; and
  • Any outstanding instalments as at 29 February 2020 were no more than 30-days overdue.

Brussels region

The Brussels COVID-19 indemnity may be granted up to five times to an enterprise if it operates several premises in Brussels. Applications for this payment must be submitted online before 18 May 2020.

Flanders region

The Flemish compensation may be granted up to five times to an enterprise if it operates several premises in Flanders. As from 6 April 2020, businesses that benefited from the compensation will automatically receive a subsidy of €160 per additional mandatory closing day corresponding to a normal opening day before 14 March 2020. Applications must have been submitted online by 5 May 2020.

Walloon region

The Walloon COVID-19 indemnity may be granted only once per enterprise. Applications for this indemnity must be submitted online within 60 days following the date of the shop closure.

Federal level

Regarding deferral of credit payments:

  • It can be requested for credit with a fixed repayment schedule or a revolving credit facility including simple straight loans and overdrafts (leasing and invoice financing are excluded);
  • Deferral of payment may be obtained for a maximum of six months up to 31 October 2020;
  • Deferral of payment may be obtained only for future monthly instalments;
  • Interest remains due;
  • The duration of the credit will be extended by the deferral period.

Regarding the guarantee scheme:

  • It is limited to a maximum credit amount of €50 billion.
  • The scheme covers all new credit facilities with a maximum maturity of 12 months (excluding refinancing loans) provided until 30 September 2020.

The compensation payments are funded by the budget specific to each Belgian Region and do not have to be repaid.

Regarding the federal-level deferral of payments scheme, after the suspension period, capital repayments will be resumed and the duration of the credit will be extended by the deferral period.

The federal-level guarantee scheme is financed by both the public and financial sectors, as follows:

  • The first 3% of losses will be borne entirely by the financial sector;
  • For losses between 3% and 5%, 50% of the losses will be borne by the financial sector and 50% by the government;
  • For losses higher than 5%, 80% of the losses will be borne by the government and 20% by the financial sector.

Support measures that apply automatically (without filing any request)

  • VAT. Automatic deferral of deadlines for filing returns and deferral of payment deadlines by two months. Accelerated VAT refunds are available where certain conditions are met.
  • Payroll/wage tax. Automatic deferral of payment deadlines by two months.
  • Other taxes. For taxes relating to the tax year 2019-income 2018, established as of 12 March 2020, an additional payment period of two months is automatically granted beyond the normal payment deadline for the payment of personal income tax, corporate income tax, legal entity income tax and non-resident income tax.

Support measures that can be applied for

  • Requests for payment plans (excluding interest on arrears and fines) may be granted by the Belgian tax authorities in relation to payment of certain taxes owed as at 12 March 2020 (comprising withholding tax, VAT, personal income tax, corporate income tax and legal entities income tax).
  • Applications can be submitted by any individual or legal entity having a business number with the Crossroads Bank for Enterprises, which is able to demonstrate that it is experiencing financial difficulties as a result of the coronavirus crisis. This measure is not available for undertakings which are in financial difficulty which is not due to the virus.

Impairment of trade receivables

The Belgian tax authority has confirmed that the COVID-19 crisis is a “special circumstance” which justifies the exemption of reductions in value on commercial receivables held on companies that are in arrears with payment of these receivables, resulting directly or indirectly from measures taken by the Federal Government.

Measures at the employer’s expense

The Belgian tax authorities have permitted a (tax free) allowance of €126.94/month (at the employer’s expense) for all workers required to work from home as a consequence of measures taken against COVID-19.

Miscellaneous tax measures

  • The Belgian tax authority has postponed non-essential on-site tax audits.
  • Application double taxation conventions between Belgium, France and Luxembourg has been temporally relaxed for cross-border workers.
  • Enterprises will not have to pay VAT on donations of stocks of medical equipment to hospitals and health care institutions.
  • Companies experiencing cash flow issues due to the crisis may be granted increased rates for advanced tax payments.
  • Miscellaneous measures have been taken regarding customs and excise duties.
  • Various measures have also been taken by the three Belgian regions

The headline financing scheme is the state backing of business credit facilities up to 90%, with an aggregate value of up to €300 billion. The support, which is available to businesses of any size, is part of a package of measures that also includes financial support for very small companies, temporary changes to insolvency law and various tax measures, which we discuss below.

For more, see our COVID-19 Insights page.


Catherine Olive, Co-Managing Partner, France
T +33 1 84 82 45 32

Sophie Jouniaux, Partner, France
T +33 1 84 8 24594
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The main coronavirus crisis-specific financing scheme comprises State guaranteed loans (Prêts Garantis par l’Etat (PGE)). The State has offered to guarantee credit facilities up to 90%, up to an aggregate total of €300 billion. This is available to large and small businesses.

There are various further schemes which are not discussed in detail below, including:

  • A number of initiatives from BPI France Financement (a state-owned bank with a focus on young, innovative businesses and SMEs) including two main schemes specific to crisis-related cashflow problems, namely Rebond loans for SMEs and Atouts loans for intermediate-sized enterprises known as ETIs. Both require bank financing and are unsecured. BPI France has also announced the automatic suspension of repayment for existing facilities as from 16 March but has not specified yet the duration of the suspension. Through its insurance subsidiaries, BPI France is also adapting its existing export credit insurance schemes (including extension of deadlines or suspension of payments).
  • Measures for very small businesses (generating less than €1 million in annual revenue) including small subsidies and postponement of rent and energy bills payment.
  • Temporary changes to insolvency law, in particular the insolvency thresholds: the assessment of the cash position which would trigger an obligation to file for insolvency has been frozen as at 12 March 2020.
  • Emergency legislation to freeze the penalty and termination/acceleration clauses in contracts.

The PGE scheme is available to French businesses (legal and natural persons, including not-for-profit organisations) other than real estate companies, credit institutions, financing companies, and companies that were subject to certain insolvency proceedings as of 24 March 2020.

Due to the EU State Aid regulation, some companies with high debt-equity ratios and low EBITDA interest-coverage ratios may also be excluded from the scheme.

Eligible facilities under the PGE scheme are drawn or undrawn facilities (including syndicated loans or club deals) granted by banks and financial institutions from 16 March 2020 up to and including 31 December 2020.

The total cumulative amount of loans covered under the scheme for a single business is a maximum of 25% of the turnover (based on the most recent completed financial year) or – if more favourable for young businesses – such as young innovative companies (Jeune Entreprise Innovantes), or companies and businesses incorporated in 2019 – two years of employee costs.

For companies with less than 5,000 employees in France and with turnover lower than €1.5 billion:

  • The state will guarantee 90% of the value of the loan(s) (calculated as the principal plus interest plus other costs).
  • No other security may be required by the bank(s).
  • The application is made to the bank(s) of the company or the individual, which will examine the request;
  • If the bank pre-approves the request, BPI then confirms the guarantee (which occurs automatically through issuance of a unique central number, following on-line registration by the lender of the application on a dedicated platform, including the bank(s)’s pre-approval).
  • If the bank(s) refuses pre-approval, the case can be escalated to the French Credit Mediator (a public institution connected to the French Central Bank that assists any business that has difficulties with financial institutions).

For companies with more than 5,000 employees in France or a turnover in excess of €1.5 billion:

  • The state will guarantee 80% of the value of the loan(s) for companies whose turnover is lower than €5 billion and 70% for those with turnover between €1.5 billion and €5 billion.
  • The application is made to the bank(s) of the company for pre-approval. The file is then examined by the Ministry of the Economy and the guarantee will be issued through an individual administrative order.
  • On-going discussions around prohibiting dividend distribution and share buy-back for listed companies may impact the ability of either borrowers or the banks to benefit from the scheme.

Interest: there is no provision in the legal framework for the PGE for the payment of interest. The professional French banking association, the FBF, has indicated that its members will offer the PGE at cost (that is, no charges in addition to their financing costs and the cost of the state guarantee). The state guarantee premium will be based on the principal amount of the loan and varies from 25 to 200 basis points depending on (i) the borrower’s size and (ii) the facility maturity.

Repayment: there is no amortisation under the PGE scheme for the first 12 months. After the initial 12-month period, the scheme allows the borrower to choose amortisation in one, two three, four or five years.

The French government has announced the following tax measures:

  • Deferral of any direct taxes for a period of three months by request to the relevant Business Tax Department (Service des Impôts des Entreprises).
  • Remission of taxes, late payment interests or penalties: the taxpayer’s request for remission must provide evidence that payment is impossible and that tax deferral is not sufficient to overcome the financial difficulties.
  • Self-employed workers can adjust their withholding tax rate downwards by reducing their income for the year, their rate and their monthly down payments. Down payments can be deferred to the next due date (up to three consecutive times) and quarterly down payments once a year. Requests to adjust or defer the down payments must be made before the 22nd of each month.
  • Refunds for tax credits refundable in 2020, such as the Business Competitiveness Tax Credit (CICE) and the Research Tax Credit (CIR), can be requested without waiting for deposit of the corporation tax (CIT) return.
  • Tax deadlines are deferred from May to 30 June 2020, including balances of CIT due for 2019, CIT tax returns for 2019, declaration of the scope of consolidated group tax, personal income tax returns for 2019 and declarations and payments regarding contribution on the added value of companies or CVAE.
  • Companies in financial difficulty may request postponement of May tax payment deadlines from their business tax department.
  • Large companies (with more than 5,000 employees or turnover in excess of €1.5 billion) may request postponement of the payment deadlines provided that they do not pay dividends in 2020 to their shareholders in France or abroad, or repurchase shares in 2020.
  • VAT arrangements: in the event that companies are unable to gather all the documents needed to finalize their VAT returns in the current context of lockdown, a reporting system based on an assessment of the VAT due is implemented. Companies can submit an estimate of the amount of VAT due for a month and pay an instalment the following month.

State-owned development bank FfW is providing loans that are available to all businesses in Germany that are experiencing temporary financing difficulties due to the coronavirus crisis. The loan scheme is split into three different programmes, depending on the type and size of business.

The federal government is also providing guarantees for public investments and additional measures for start-ups, and individual states within Germany have also established their own aid schemes.

We discuss these measures below. For more, see our COVID-19 Insights page.


Joachim Breithaupt, Partner, Germany
T +49 221 5108 4056

Florian Merkle, Senior Associate, Germany
T +49 221 5108 4320

Antje Günther, Partner, Germany
T +49 221 5108 4218
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KfW Loans

The coronavirus aid programme from KfW (a German State-owned development bank) has been available since 23 March 2020 for all companies based in Germany that have temporary financing difficulties due to the coronavirus crisis. The funds for the KfW coronavirus aid programme are unlimited. The loan programme has three elements:

  • The Quick Loan Programme is intended to give medium-sized enterprises faster access to KfW loans. Loans are limited to €800,000;
  • KfW-Business Loan and ERP-Founders’ Loan are available with a loan sum up to €1 billion per business group; and
  • Under the direct participation for consortium financing programme, KfW participates in financing that is in line with market conditions and on the same terms as other banks. KfW assumes part of the credit risks of the financed enterprise and offers the participating banks the option of refinancing. The financing structures are tailored to the individual needs of the borrower. The programme is limited until 31 December 2020.

Federal government: Economic Stabilisation Fund Act

The Economic Stabilisation Fund provides for further stabilisation measures in addition to the KfW coronavirus aid program in the form of guarantees of €400 billion, €100 billion for government investments (recapitalisation) and €100 billion to refinance the development bank.

It aims to stabilise companies by bridging liquidity shortages and by creating the framework conditions for strengthening the capital base of companies whose existence would have a significant impact on the economy, technological sovereignty, supply security, critical infrastructures or the labour market.

Other measures

For start-ups, the federal government has announced an additional package of measures with a volume of €2 billion, which is specially tailored to their needs.

In addition to the federal government’s initiatives, the German states have also set up their own aid programmes.

For more details, please download our report (see pages 7 to 10).

KfW loans

The KfW coronavirus aid programme will be available to all companies based in Germany that have temporary financing difficulties due to the coronavirus crisis. This means that all companies that were not in financial difficulties on 31 December 2019 can apply for a loan. In order to receive a quick loan, the applicant company must:

  • Have been active on the market at least since the beginning of 2019;
  • Have sound financial circumstances; and
  • Have generated a profit in 2019.

For the ERP Founders’ Loan and KfW Business Loan, companies must have been active on the market for at least three years or be able to present two financial statements.

The “Direct participation for consortium financing” programme is aimed at German and foreign commercial enterprises – the majority of which are privately owned – for projects in Germany. Foreign projects by German companies (or their subsidiaries based abroad) cannot be financed through the scheme.

The Economic Stabilisation Fund

This fund is aimed at companies in the “real economy”, meaning those that are neither financial sector companies nor credit institutions. They need to have fulfilled at least two of the following three criteria in the last two completed financial years before 1 January 2020:

  • A balance sheet total of more than €43 million;
  • More than €50 million in revenues; and
  • More than 249 employees on an annual average.

Other measures

The federal government’s start-up package is available to start-ups, young technology companies and small or medium-sized enterprises.

KfW Loans

Quick Loan Programme:

  • Loan term: 10 years.
  • Interest rate: 3 %.
  • Loan amount: three months’ turnover in 2019 – however, the maximum amount per company with 11 to 49 employees is €500k and €800k for companies with 50 to 249 employees.
  • Security: none required.

ERP- Founders’ Loan and KfW-Business Loan

  • Loan terms: five years, with a maximum of one grace year and a fixed interest rate for the entire period
  • Interest rate: based on the development of the capital market between 1.00% and 2.12% per annum.
  • Loan amount: maximum €1 billion per business group (affiliated companies), limited to:
    • 25% of annual revenue in 2019 or double the wage costs of 2019;
    • The current liquidity requirements for the next 18 months for small and medium-sized enterprises, or for 12 months for large enterprises.
    • For loans exceeding €25 million, the amount of the loan is limited to a maximum of 50% of the company’s total debt (KfW has specified that shareholder loans etc. should be included in the calculation of total debt).
  • Security: collateral of up to 100% of the loan amount.

‘Direct participation for consortium financing’ programme

The KfW risk share usually may not exceed EUR 25 million or:

  • Twice the annual payroll in 2019;
  • 25% of the total revenue for the year 2019; or
  • The liquidity requirements for the next 12 months.

The Economic Stabilisation Fund


The fund is empowered to provide warranties of up to €400 billion for debt instruments and liabilities established by companies in order to eliminate liquidity shortages and support refinancing on the capital market. The term of the warranties and the liabilities to be protected may not exceed 60 months. An appropriate compensation must be charged for the granting of warranties.


The fund may also invest in the recapitalisation of companies. The recapitalisation measures include the acquisition of debt instruments, hybrid bonds, profit participation rights, silent participation, convertibles, the acquisition of shares in companies and the assumption of other components of the equity of these companies, if this is necessary for the stabilisation of the company. Appropriate compensation must be agreed for the recapitalisation.

The fund is only able to provide finance by taking a shareholding if the federal government has an interest in stabilizing the enterprise and if the purpose intended by the federal government cannot be achieved in a better or more economical way.

Most aid programmes consist of loans, which must be applied for through the applicant’s bank. With the exception of the Quick Loan programme, applicants must provide standard bank collateral.

Through the Economic Stabilisation Fund, the government can also participate with equity capital.

The German government is initially focusing on short-term measures within the scope of the tax levy, which can be implemented without complex legal provisions. The relief therefore concerns taxes and tax prepayments that have already been determined. The government has provided that:

  • Affected tax payers can apply for an interest-free deferment of taxes due;
  • Affected tax payers can request a reduction of tax prepayments; and
  • The collection of late payment surcharges and the enforcement of tax debts are suspended.

Tax payers who are particularly and directly affected by the coronavirus crisis can apply for deferral of income tax and corporation tax already levied and not yet paid, or to be levied by 31 December 2020. The justifying evidence of considerable hardship is not required. It is only necessary to present the actual circumstances. It is not required that the taxpayer has already suffered financial losses.

The same requirements apply to claims for reduction of prepayments of income tax or corporation tax for affected companies.

In addition, the tax authorities will refrain from enforcement measures and imposition of late payment surcharges until 31 December 2020 for directly affected companies. Enforcement is also suspended for taxes that arose and were due before 19 March 2020.

The customs administration (for example, in the areas of energy and air transport tax) and the Federal Central Tax Office (VAT and insurance tax) are also instructed to meet tax payers’ needs accordingly.

In all German states, it is possible to apply to the tax offices for an adjustment of the trade tax base. The same requirements apply to this application as for the adjustment of advance payments on income or corporation tax.

In addition, certain states (for example, Bavaria, Baden-Württemberg or North Rhine-Westphalia) are reimbursing special VAT payments already made for a permanent extension of the VAT return.

The government has implemented a programme of state guarantees for loans to Italian companies. The guarantees cover between 70 and 90% of the loans, depending on the size of the business.

We discuss these measures below. For more, see our COVID-19 Insights page.


Andrea Pinto, Partner, Head of Banking & Finance, Italy
T +39 02 5413 1723

Stefano Guerreschi, Partner, Head of Tax, Italy
T +39 030 2888 611
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The Italian government has authorised the public body SACE to issue guarantees in favour of banks for loans granted to Italian companies. The guarantees of SACE are automatically counter-guaranteed by the State and they are on first demand, irrevocable and compliant with the relevant supervisory requirements. The European Commission has specifically approved this initiative.

All Italian companies qualify for support. The coverage of the guarantee is decided based on a combination of the turnover and number of employees of the business.  It will be:

  • up to 90% of the business’ loans, if the business has turnover of less than €1.5 billion and fewer than 5,000 employees;
  • up to 80% if the business has turnover between €1.5 billion and €5 billion and more than 5,000 employees; and
  • up to 70% if the business has turnover greater than €5 billion.

Duration of guarantee: Six years. Possibility of pre-amortisation (only interest paid) for up 24 months.

Purpose: To support staff costs, investments, working capital employed, production plants and business activities located in Italy.

Recipient: Italian companies not in a position of financial distress at the date of 23 February 2020.

Amount: Not exceeding the greater of:

  • 25% of the company’s turnover in 2019; and
  • Twice the staff costs for 2019.

The funding of the scheme is a private agreement between the Italian company and the bank. Any company that has been funded cannot distribute dividends in 2020 and must manage employment levels through trade union agreements.

All payments of withholding taxes and social security contributions due for the month of March (payment in April) are suspended until 30 June 2020. From that date, they can be paid in five monthly instalments (with no interest or penalties).

A number of different schemes are available for Dutch businesses and individuals. These range from a bridging scheme for entrepreneurs and a one-off payment to smaller companies in certain sectors to a government guarantee scheme for loans to SMEs.

We discuss these, and other schemes, below. For more, see our COVID-19 Insights page.


Peter van der Horst, Senior Associate, The Netherlands
T +31 20 70 28656

Axel Van der Staak, Head of Banking and Finance, The Netherlands
T +31 20 7028648

Aram Hovanesjan, Associate, The Netherlands
T +31 20 70 28610

Job van der Pol, Head of Tax, The Netherlands
T +31 20 70 28920
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TOZO is a temporary bridging scheme for independent entrepreneurs. It comprises a loan for working capital to small entrepreneurs and a subsidy (gift) to supplement income for up to three months to social minimum standard.

TOGS is a governmental reimbursement scheme for economic loss due to the coronavirus crisis. A one-off payment of €4,000 is available for smaller companies active in certain sectors.

BMKB is a government guarantee scheme for SME Loans. The guarantee by the government is available for new financing, covering 50% to 90% of a credit line up to €1.5 milion. This scheme reduces risk for participating banks, making it easier for companies to obtain finance.

GO is a government guarantee for entrepreneur financing. Businesses that experience problems in obtaining bank loans and bank guarantees (from any of the 11 participating banks) can apply for GO support. Under GO, the government will guarantee part of the loans.

BL is a temporary guarantee scheme for loans to agricultural and horticultural companies.

Qredits is a not-for-profit pubic benefit organisation (ANBI) foundation that helps entrepreneurs with financing up to €250,000 with low interest rates.

For additional detail on these schemes, please see our insight on the above measures.

This is available for small entrepreneurs that lose their source of income to an amount below social security standards and that need a loan to resolve liquidity issues.

This is available for entrepreneurs involved in an activity deemed to be materially affected by the coronavirus crisis (which have been formally designated using standard company identification (SBI) codes from the trade register). TOGS is only available for companies that were registered before 15 March 2020, employing not more than 250 employees and holding their office in the Netherlands (the full set of conditions can be found here).

This is available for SMEs and smaller companies (more information here and here) with up to 250 employees (full-time equivalents) with an annual turnover of up to €50 million or a balance sheet total of up to €43 million. Start-ups, companies focused on technological innovation or companies affected by the PFAS and carbon emission problems may receive additional support within the BMKB.

Under the normal GO programme, the government was already able to guarantee a maximum of 50% of a loan of up to €50 million; i.e. a maximum guarantee of €25 million. In response to the coronavirus crisis, the maximum guarantee has been increased to €50 million. The aggregate total available for issuing guarantees has been increased from €400 million to €1.5 billion.

This is available for agricultural business getting the largest share of their turnover from primary agriculture (primaire landbouw or vegetable products and livestock farming). The company must be located in the Netherlands and the majority of its business activities must also be in the Netherlands .

This is available for entrepreneurs that require financing of up to €250,000. There are no specific requirements, other than that the platform has its own on-boarding and credit approval procedures.

A loan of up to €10,157 at 2% interest for three years and a “gift” to supplement personal income for at least three months.

A one-off payment of €4,000 that can be used by the receiver at its discretion.

Up to 75% of loans of up to €266,667 can be covered by with BMKB credit. If the loan value is higher, the maximum cover with BMKB credit is 50%. BMKB credit means that up to 90% of a loan of a maximum value of €1.5 million will be guaranteed by the government.

To benefit under this scheme:

  • The borrower must have significant activities in the Netherlands and the financing needs to be obtained from participating banks;
  • The borrower must be financially healthy; and
  • The loan needs to be “fresh money”.

There are also some restrictions on the type of sector the borrower operates in (financial sector, real estate and agriculture are, for instance, partly excluded) and no significant dividend payments can have been made in the last 12 months.

The government will guarantee 70% of credit for up to €1.5 million of bridge financing for a term of two years. The majority shareholder of the borrower must personally guarantee at least 10% of the loan.

Loans of €250,000 are available at a 2% interest.

The temporary bridging scheme is a loan and the part to supplement income is a gift.

This is a gift, funded by the government.

This scheme offers a guarantee only. In exchange, the borrower must pay a guarantee fee to the government of between 3.9% and 8.35% depending on the type of borrower and duration of the support.

This is a guarantee only.

This is a guarantee only for two years.

This is an amortising loan one to 10 years

The Dutch government has announced the following tax measures:

  • Relaxation of rules for special deferral of payment of almost all taxes, including personal income tax, corporate income tax, VAT and wage tax.
    • The normal rules are that a request for deferral of payment for tax assessments that are due and payable must be supported by a certificate from an expert (for example, external auditor, branch organisation, (tax) consultant or financier) confirming that payment issues are of a temporary nature due to the coronavirus crisis and the taxpayer’s business is otherwise viable.
    • Until 19 June 2020, deferral of payment for up to three months will immediately be granted upon an electronic request (or by regular mail), without an expert’s certificate.
    • Deferral of payment for longer than three months for a sum up to €20,000 can only be requested by physical mail. In that case, an expert’s certificate is not required but the request should include evidence that the business is affected by the coronavirus crisis (such as a calculation showing that profits are decreased compared to previous months). An expert’s certificate is only required if the payment amount to be deferred exceeds €20,000.
    • Upon receipt of the request, the Dutch tax authorities will immediately cease to collect the due taxes. Penalties for late payment of VAT or wage taxes will not be imposed.


  • A temporary reduction in the interest on payment defaults on all taxes, from 4% to 0.01%
  • A reduction in the interest rate normally charged on tax assessments issued after the taxable period has expired – from 8% (for corporate income tax) and 4% (for other taxes) to 0.01%, with effect from 1 June 2020 for taxes other than personal income tax, for which the effective date is 1 July 2020.
  • A proposal to lower the provisional assessment for corporate income tax or personal income tax.

The Spanish Government has developed a scheme of financial assistance for the self-employed and companies, which involves providing funding and liquidity.

The measures include state guarantees, a grace period for repaying finance in certain circumstances, and a particular scheme aimed at the tourism sector.

For more, see our COVID-19 Insights page.


Eduard Arruga, Partner, Spain
T +34 91 576 44 76

Miguel Lorán, Partner, Spain
T +34 93 419 18 18
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Among the various Government measures, three are particularly relevant:

  • State guarantees.
  • Official Credit Institute Funding.
  • Repayment grace period.

State guarantees

Guarantees will be granted by the Ministry of Economic Affairs and Digital Transformation for an aggregate maximum amount of €100 billion (in various tranches approved by the Council of Ministers) to guarantee new and renewed credit finance granted by, among others, credit entities and financial establishments to self-employed workers and businesses to cover their liquidity needs, facilitate the maintenance of employment, and mitigate the economic effects of the coronavirus crisis.

Official Credit Institute funding

The net debt limit of the Official Credit Institute (ICO) has been increased by €10 billion in order to increase ICO funding available for businesses and self-employed workers, through the intermediary of financial institutions, or through direct financing to larger companies by ICO, to provide additional liquidity to businesses.

In addition, existing ICO support for the tourism sector has been expanded. The so-called “Thomas Cook” scheme, created in October 2019 to mitigate the negative effects on the Spanish tourism sector from the collapse of the tour operator in September 2019, has been extended from the original €200 million to €400 million. This reflects the additional impact of the coronavirus crisis on the sector.

Repayment grace period

Grace periods have been created for repayment of:

  • loan facilities secured by mortgages;
  • consumer credit for the acquisition of the main residence; and/or
  • properties/assets used in economic activity of individuals considered entrepreneurs or professionals who are in a position of economic vulnerability.

State guarantees

Guarantees will be granted to secure loan/credit facilities entered into or renewed between 17 March 2020 and 30 September 2020 (or 31 December if the Council of Ministers approves the relevant time extension) by:

  • companies and self-employed workers with their registered office in Spain,
  • which have been affected by the economic effects of the coronavirus crisis,
  • provided that:
    • they were fulfilling all their payment obligations on 31 December 2019 (according to data provided by the Bank of Spain), and
    • they are not involved in any ongoing insolvency or pre-insolvency scenario and they are not credit institutions.

The Council of Ministers has made available the first two tranches of the guarantees for an aggregate total of €40 billion, of which €30 billion is intended for self-employed workers and SMEs and the remaining €10 billion for businesses that do not qualify as SMEs.

ICO funding

The funding offered by the ICO is available to any type of business with a registered office in Spain.

The “COVID-19/Thomas Cook” scheme is exclusively for businesses in the tourism sector that were fulfilling their payment obligations as of 31 December 2019 (according to data provided by the Bank of Spain) and were not involved in an insolvency or pre-insolvency scenario as of 17 March 2020. They must also have had a credit rating of B- or higher in the case of large companies, prior to the approval of these measures as a result of the coronavirus crisis.

Repayment grace period

Access to the grace period for repayments of loan facilities secured by means of mortgages and/or consumer credit for the acquisition of the main residence and/or properties/assets used in economic activity requires compliance with (and accreditation of) the conditions of “economic vulnerability”. The conditions are that:

  • the relief is required due to unemployment or, in the event of professionals and business owners, substantial loss of income of at least 40%;
  • a maximum limit for family income (in the preceding month to applying for the grace period) is not exceeded;
  • the amount to be paid under the existing facility/ies, plus the basic family expenses and supplies, must be more than 35% of the net income of the family unit; and
  • the mortgage charges have increased by a multiple of at least 1.3.

The grace period provisions also apply to guarantors and non-debtor mortgage providers under the same conditions (i.e. where security for a loan is provided by a third party who is not the debtor/borrower). In such cases, the non-debtor guarantor/mortgagor can request that the creditor firstly makes a claim against any assets of the debtor. If the creditor is not able to obtain the requested repayment from the debtor, then it will be allowed to claim the secured debt from the non-debtor guarantor/mortgagor.

State guarantees

State guarantees are available for new and renewed loans and other forms of financing granted by financial institutions to businesses and self-employed workers to meet their financing needs arising from, among other things, payment of salaries and invoices, and their working capital requirements or other liquidity needs, including those arising from the maturity of financial or tax obligations.

The guarantee is available in relation to:

  • for loan facilities for SMEs and self-employed workers, up to 80% of the facility
  • for other business: up to 70% of new loan facilities and up to 60% of renewal facility transactions.

The loan facilities that can benefit from this guarantee are subject to compliance with various conditions, such as the total turnover, the annual wage bill of the business concerned and amounts of the financing (depending on whether the facility is below €1.5 million, between €1.5 million and €50 million, or above €50 million).

ICO funding

ICO funding is organised through national and international financing schemes for the liquidity needs of each business, under the requirements established by ICO and through the intermediary of financial institutions or direct financing from ICO for companies of a certain size.

Currently, ICO has only adopted regulatory measures for access to COVID-19/Thomas Cook financing in connection with the tourism industry. No other industries can benefit from these specific measures.

Facilities will be granted exclusively in the form of loans, to be applied to cover any liquidity requirements, but not to repay any previous or future loans granted by financial institutions.

Repayment grace period

Requests to make use of the grace period must be addressed to the lender and include any documentation evidencing that the business meets the individual conditions for “economic vulnerability”, or a sworn statement to that effect by the individual concerned.

State guarantees

The guarantees will be granted by the Ministry if the conditions provided for by law are met, but it will be for the lending institutions to decide whether to provide loan finance and to agree terms and conditions with the borrower. The validity of the State guarantee will be limited to the term of the loan, up to a maximum term of five years.

Fees for the guarantee will be established between 20 and 120 basis points, depending on the size of the borrower (for example, SMEs), the maturity date and the secured amount under the relevant loan.

ICO funding

The terms for the funding granted by ICO are those agreed by the borrower and financial institution under the general regulatory framework established by ICO.

In relation to COVID19/Thomas Cook financing, ICO has set specific limits for its support, which is available:

  • for loans totalling up to €500,000 per borrower (in one or more operations);
  • with a maximum fixed interest rate of 1.5%; and
  • a term of 1 to 4 years with a 1-year grace period.

ICO guarantees 50% of the risk of this financing.

Repayment grace period

The grace period will last three months (extendable by agreement of the Council of Ministers) from the date that it is requested from the lender. During this grace period:

  • the lender cannot request payment of either principal or interest;
  • no interest of any kind will accrue; and
  • the maturity date of the loan will be extended for the same length of time as the grace period (without amending the rest of the applicable contractual conditions).

In addition, a series of tax and notary exemptions and allowances are provided for the formalisation of any amendments to loan/credit arrangements, and in relation to mortgages, such as an exemption from stamp duty for the public deeds of mortgage securing any loan/credit.

Spain has approved very limited tax measures, as a result of the coronavirus crisis. These can be summarised as follows:

State taxes (mainly Corporate Income Tax, Personal Income Tax, including payroll tax withholdings, and Value Added Tax)

As regards, filing and payment of such taxes, only two very limited measures have been enacted:

  • An automatic six month payment postponement will be granted, with no late payment interest due in the first three months. Only taxpayers whose turnover in 2019 did not exceed €6 million, are eligible for this postponement and the postponement only applies to tax debts up to €30,000.
  • A one month filing and payment extension has been approved but only for taxpayers whose turnover in 2019 did not exceed €600,000.

Regional taxes

Extended filing and payment deadlines for regional taxes have been approved by most, if not all, Spanish Regions. The extent of the specific measures depends on the Autonomous Region concerned in each case. As a broad rule, these measures relate mainly to Stamp Duty, Transfer Tax or Inheritance and Gift Tax and may, depending on the Region, apply to all taxpayers, regardless of size.

It is also worth highlighting two specific Regions:

  • Basque Country: broadly speaking, the Region has jurisdiction to legislate and collect its own Corporate Income Tax, Personal Income Tax and Value Added Tax. Taxpayers subject to, for example, corporate income tax in the Basque Country may benefit from postponements or extended filing on more generous terms than those available to taxpayers subject to State corporate income tax. Legislation enacted in each Basque province should be reviewed.
  • Canary Islands: the Region is not within the EU VAT territory and has its own sales tax. The Region has approved a filing extension for Sales tax returns for the first quarter of 2020 (potentially applicable to taxpayers with a maximum turnover in 2019 of €6 million).

Taxes resulting from a specific assessment or in respect of which the taxpayer had already been granted a specific authorisation to postpone or pay in instalments and which will fall due during the period in which specific coronavirus crisis emergency state measures apply will also benefit from a payment extension. The final payment deadline will vary depending on when the payment would have been initially due.

Tax proceedings

Broadly, tax proceedings (such as audit or collection proceedings or certain administrative review proceedings in relation to taxes) have been temporarily halted. Each specific procedure should be reviewed to determine how deadlines or time periods should be calculated.

Moreover, the statute of limitations is also deemed to be extended during the period in which specific coronavirus crisis emergency state measures apply.

The UK government has established a range of schemes to allow businesses, from small start-ups to large, investment-grade corporates, to access government-backed loans. The terms and eligibility criteria, which differ for each of the schemes, are discussed further below.

For more, see our COVID-19 Insights page.


Tom Bussy, Partner, UK
T +44 117 917 3590

Max Millington, Partner, UK
T +44 207 105 7674

Erika Jupe, Partner, UK
T +44 117 917 4260
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Coronavirus Business Interruption Loan Scheme (CBILS)
Delivered by the British Business Bank (BBB), this scheme aims to support primarily small and medium-sized businesses to access bank lending and overdrafts. The scheme is administered by BBB but all loans are made through individual accredited lenders (of which there are around 40).  Applications must be made directly to those lenders and not to the BBB.

Full details can be found on the BBB website.

Covid-19 Corporate Financing Facility (CCFF)
The aim of the CCFF is to provide additional help to larger firms to bridge through coronavirus- related disruption to their cash flows. It is a joint scheme run by HM Treasury and the Bank of England (BoE). It works by providing funding to businesses by purchasing commercial paper of up to one-year maturity, issued by firms making a material contribution to the UK economy. Eligible companies that wish to participate must do so through a bank which issues commercial paper.

Full details can be found on the Bank of England website.

Coronavirus Large Business Interruption Loan Scheme (CLBILS)
This scheme was launched with the aim of supporting UK mid-sized and larger enterprises with turnover in excess of £45 million during the coronavirus crisis, following criticism that the two schemes mentioned above did not cater for UK companies with turnover in excess of £45 million, but which were not eligible to participate in the CCFF.

Like CBILS, the scheme is operated by the BBB via its accredited lenders.

Full details can be found on the BBB website.

Future Fund scheme
This scheme was launched to provide innovative companies with bridging capital to ensure that they can survive and potentially continue to grow during the coronavirus crisis, against concerns (discussed further here) that many private equity or venture capital-backed businesses would not be eligible for CBILS or CLBILS. The Future Fund will be delivered in partnership with the British Business Bank.

In addition, the government has announced additional support for small and medium-sized firms that are primarily focussed on research and development, which will be delivered by Innovate UK.

Further details of the Future Fund and the Innovate UK funding are available here.

Bounce Back Loan Scheme
The Bounce Back Loan scheme has been put in place to help small and medium-sized businesses affected by coronavirus to apply for loans of up to £50,000. The scheme will launch on 4 May 2020. Further information is awaited but certain details can be found here.

To be eligible for a facility under CBILS, a business must:

  • Be UK-based in its business activity;
  • Have an annual turnover of no more than £45 million;
  • Have a borrowing proposal which the lender would consider viable, were it not for the current pandemic;
  • self-certify that it has been adversely impacted by the coronavirus crisis; and
  • not have been classed as a ‘business in difficulty’ on 31 December 2019, if applying to borrow £30,000 or more.

The CCFF is available to firms that can demonstrate they were financially sound prior to the pandemic. Eligibility will be based on credit ratings (short- or long-term ratings of investment grade or equivalent). However, the BoE has amended its position to make it easier for companies that do not have a credit rating to access the fund.

The BoE will make as assessment in each case, which will draw on a range of information, including the range of banks’ internal ratings across all of a firm’s commercial bank counterparties. A company will need to have been consistently rated as investment grade by its banks to be eligible for the scheme.

In practice, firms that meet this requirement would normally be:

  • UK incorporated companies, including those with foreign-incorporated parents and with a genuine business in the UK;
  • companies with significant employment in the UK; and
  • firms with their headquarters in the UK.

The bank will also consider whether a company generates significant revenues in the UK, serves a large number of customers in the UK, or has a number of operating sites in the UK.

Commercial paper issued by financial sector entities regulated by the BoE or the Financial Conduct Authority will not be eligible, nor will paper issued by public bodies or authorities.

To be eligible for a facility under CLBILS, a borrower must:

  • be UK-based in its business activity;
  • have turnover of more than £45 million per year;
  • confirm that it has been impacted by the coronavirus crisis; and
  • have a borrowing proposal that would have been considered viable by the lender, if it were it not for the pandemic, and for which the lender believes the provision of finance will enable the business to trade out of any short-to-medium term difficulty.

Larger businesses opting to participate in the Bank of England’s CCFF scheme are not eligible for CLBILS.

Future Fund scheme
In order to be eligible under the Future Fund scheme, businesses must:

  • be UK registered private companies;
  • have raised at least £250,000 in private investment in the last five years; and
  • be in a position to secure private funding to match the government’s investment (which cannot exceed 50% of the total funding provided under this scheme).

Bounce Back Loan Scheme
A business can apply for a loan if the business:

  • Is based in the UK;
  • Has been negatively affected by coronavirus; and
  • Was not an ‘undertaking in difficulty’ on 31 December 2019.

There are certain exceptions such as if a business is already claiming funding under CBILS they cannot apply. However, if a business has already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, they can arrange this with their lender until 4 November 2020.

The government will provide lenders with a guarantee of 80% on each to give lenders further confidence in continuing to provide finance to SMEs.

The scheme will support facilities of up to £5 million.

The minimum size of an individual security that the fund will purchase from an individual participant is £1 million. The facility will offer financing on terms comparable to those prevailing in markets in the period before the pandemic. How much paper can be issued by an individual issuer depends on a range of factors, including credit rating.

The facility will be operated for an initial period of 12 months and then be reviewed.

Lenders making use of the scheme will pay a small fee to benefit from a partial 80% government guarantee on each CLBILS facility. Fees for lenders under the scheme will vary according to the length of the facility.

The maximum value of a facility provided under the scheme is:

  • 50 million for businesses with turnover in excess of £250 million; and
  • £25 million for businesses with turnover between £45 million and £250 million.

Facilities are repayable within three years.

Future Fund scheme
Funding to a value of between £125,000 and £5 million will be made available to eligible recipients in the form of convertible loans. Funding provided by the Future Fund can only be used for working capital purposes.

Bounce Back Loan Scheme
Under the scheme, small and medium-sized businesses may be able to borrow between £2,000 and £50,000. The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. The scheme will be delivered through a network of accredited lenders. Loan terms will be up to six years, with no repayments due during the first 12 months.

There is no fee for companies to access the scheme. The government will make a Business Interruption Payment to cover the first 12 months of interest payments and any lender-levied fees. There will therefore be no upfront fees payable by the business and repayments will be interest free for the first 12 months, subject to certain exclusions. Repayment profiles and interest rates following the first 12 months will be set by each lender.

Personal guarantees may not be taken for facilities under £250,000 but may be taken for facilities above this; however, security may never be taken over a guarantor’s principal private residence.

The borrower remains at all times liable to the lender for the debt.

Commercial paper is an unsecured short-term debt instrument generally issued by large companies to meet short-term liabilities. Under the CCFF, the BoE will purchase this paper from eligible companies to provide emergency cash flow. Those companies will commit to redeeming the paper when due. The transaction is unsecured, which is why it is only available to companies with a robust credit rating.

Financing will be offered on terms comparable to those prevailing in markets in the period before the pandemic.

For primary market purchases, the BoE will purchase securities at a spread above a reference rate, based on the current sterling overnight index swap rate. For secondary market purchases, the Bank will purchase commercial paper at the lower of amortised cost from the issue price and the price as given by the method used for primary market purchases. The Bank will apply an additional small fee (currently set at 5 basis points and subject to review) for use of the secondary facility, payable separately.

BoE will only purchase commercial paper with standard features issued using the International Capital Markets Association market standard documentation or simplified versions of these documents, which are now available on the BoE website.

Under the scheme, no personal guarantees will be permitted for facilities under £250,000. For facilities of £250,000 and over, claims on personal guarantees applied to the scheme facility cannot exceed 20% of losses on the scheme facility after all other recoveries have been applied.

The borrower remains fully liable for the repayment of any facility supported by CLBILS.

Future Fund scheme
The government is providing a total of £250 million of funding under this scheme, to be matched by £250 million sourced from private investors. As noted, the funding will take the form of convertible loans, which will automatically convert into equity on the company’s next qualifying funding round (at a discounted rate).

Bounce Back Loan Scheme
We await further details.  Current details are that the government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. The scheme will be delivered through a network of accredited lenders.

A relaxation of HMRC’s existing ‘time to pay’ scheme.  Businesses and self-employed individuals can enter into bespoke arrangements with HMRC to defer tax liabilities for a time-limited period. Interest and penalties arising from the late payment of tax as a result of such arrangements will be waived.

Introduction of the Coronavirus Job Retention Scheme.  Employers can furlough employees and recover a proportion of the pay from HMRC – limited to the lower of 80% of wage costs or £2,500 per calendar month, plus employer national insurance contributions and employer auto-enrolment pension.

Introduction of the Self-employment Income Support Scheme
For self-employed individuals who have lost income as a result of the coronavirus crisis, the scheme allows for self-employed individuals to claim a grant worth 80% of their average trading profits from the last three tax years, up to a maximum of £2,500 per month for three months.

Deferral of the self-assessment income tax payments for self-employed persons
Payments have been deferred to January 2021 (from 31 July 2020). Late payment penalties and interest will not be charged for this period.

Deferral of VAT payments due between 20 March 2020 and 30 June 2020
Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the three-month deferral period. Late payment penalties and interest will not be charged for this period.

The ability for governments of EU Member States (and the UK) to provide support to businesses is subject to the EU’s State aid regime.

We discuss below the temporary framework that the EU has put in place to enable governments to respond to the coronavirus crises.


Steven Verschuur, Head of EU Law, Belgium
T +32 2 515 93 82

Marc Shrimpling, Partner, UK
T +44 117 917 3490
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The European Commission has published (and amended) a Temporary Framework for State aid measures to enable Member States to provide financial support to businesses affected by the coronavirus crisis without breaching the State aid rules. More detail on the original framework is available here, and on the amendments here.  The Commission is working on a third version of the Temporary Framework to further extend the scope of the Temporary Framework by enabling Member States to provide recapitalisations to companies in need. The draft is currently under the review of Member States.

This emergency framework enables Member States to provide direct assistance to companies during the coronavirus outbreak, relying on exceptional EU treaty provisions that enable the Commission to approve national support measures “to remedy a serious disturbance to the economy of a Member State”.  National aid measures that comply with the Temporary Framework will, in principle, be approved by the Commission.  The State aid rules (and therefore the Temporary Framework) continue to apply to the UK during the Brexit transition period.

So far, the Temporary Framework covers the types of aid listed below, which are aimed at:

·         helping companies facing a sudden shortage or unavailability of liquidity due to the coronavirus;

·         sustaining research and development, and production of products to help against the coronavirus crisis; and

·         helping workers and preventing lay-offs.

Direct grants, repayable advances or tax advantages

Aid can be granted in the form of direct grants, tax and payment advantages, or other forms such as repayable advances, guarantees, loans and equity to companies facing sudden shortage or unavailability of liquidity. The aid can be granted if certain conditions are fulfilled, including that the overall aid does not exceed €800 000 per company and the aid is granted before 31 December 2020. Companies that were already in financial difficulty on 31 December 2019 cannot benefit from this type of aid.

State guarantees on loans and subsidised interest rates for loans

In order to ensure access to liquidity for companies facing a sudden shortage, public guarantees on loans for limited periods and amounts can be granted, provided that certain conditions are fulfilled, such as: the guarantee premiums are set at the level indicated in the Temporary Framework; and the guarantee is limited to six years and is granted before 31 December 2020.

Guarantees and loans channelled through credit institutions or other financial institutions

Member States will also be able to channel aid through the banking sector, with such aid being regarded as direct aid to the banks’ customers, rather than to the banks themselves. The Temporary Framework gives guidance on how to minimise any undue residual aid to banks and to ensure the funding is passed on, to the largest extent possible, to the final beneficiaries.

Short-term export credit insurance

The Temporary Framework foresees that, due to the current outbreak, marketable risks cover under export credit insurance is temporarily unavailable for all currently marketable risk countries.

COVID-19-relevant research and development (R&D); testing and upscaling infrastructures and production of COVID-19-relevant products

Aid can be granted in relation, broadly speaking, to , products and research necessary to help with the coronavirus crisis, namely:

  • R&D projects carrying out coronavirus and other antiviral relevant research;
  • construction or upgrade of infrastructure required to test and upscale products relating to the coronavirus crisis; and
  • production of products relating to the coronavirus crisis.


These forms of aid can be granted if certain conditions are met, including that:

  • the aid is granted in the form of direct grants repayable advances or tax advantages;
  • it is granted before 31 December 2020;
  • the R&D and construction/upgrade projects have an “incentive effect”, where the funding will accelerate or widen the project;
  • the aid beneficiary commits to grant non-exclusive licences under non-discriminatory market conditions; and
  • the aid cannot be granted to companies that were already in financial difficulty on 31 December 2019.

Tax deferrals and/or suspensions of employees’ social security contributions

Deferrals of payment of taxes and/or of social security contributions may be a valuable tool to reduce the liquidity constraints of companies. This type of aid can take the form of deferral of payments due in instalments, easier access to tax debt payment plans and of the granting of interest free periods, suspension of tax debt recovery, and expedited tax refunds. It can be granted to companies (including self-employed individuals) particularly affected by the coronavirus crisis, for example in specific sectors, regions or to companies of a certain size. The aid shall be granted before 31 December 2020 and the end of the deferral shall not be later than 31 December 2022.

Wage subsidies for employees to avoid lay-offs during the COVID-19 outbreak

In order to preserve employment, Member States may envisage contributing to the wage costs of companies (including self-employed individuals), which, due to the coronavirus crisis, would otherwise lay off personnel. This type of aid can be granted if certain conditions are met, such as:

  • the aid is in the form of schemes to companies in specific sectors, regions or companies of a certain size that are particularly affected by the coronavirus outbreak;
  • the wage subsidy is granted for a period of no more than 12 months; and
  • the monthly wage subsidy shall not exceed 80% of the monthly gross salary.

The European Union has agreed a financial package amounting to €540 billion to support Member States, companies and workers during the coronavirus crisis. The fund includes economic programmes to support:

  • Member States through the safety nets of the European Stability Mechanism;
  • companies through the European Investment Bank, which created a pan-EU guarantee fund; and
  • workers through SURE, a temporary loan-based instrument for financial assistance.

At the time of writing, the package has been approved by EU political leaders. National parliaments are asked to approve the measures as soon as possible in order for them to be in force by 1 June 2020.

The Commission aims to publish a draft long-term EU budget in early May, which will include recovery measures, which could amount up to €2 trillion.

The Singapore government and the Monetary Authority of Singapore have put in place a range of measures to support businesses, including corporation tax rebates, working capital loans, property tax rebates and financial support for certain sectors.

We discuss these measures below. For more, see our COVID-19 Insights page.


Chia-Ling Koh, Director, Singapore
T +65 6350 4382
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Various measures have been taken in Singapore, including an emergency budget, subsequent legislation for indirect temporary assistance and a monetary authority support package. 

Resilience Budget
On 26 March 2020, Singapore’s Resilience Budget addressed the rapidly evolving coronavirus crisis, supplementing the Unity Budget of 18 February with measures that included:

  • Co-funding of employee’s wages under the Jobs Support Scheme (JSS);
  • the Income Relief Scheme for self-employed persons (SIRS);
  • Corporate income tax rebates for the year of assessment 2020 at 25% of tax payable, capped at S$15,000 per company (with overall cost of about S$400 million);
  • Working capital loans for enterprises in the form of the enhanced Enterprise Financing Scheme Working Capital Loan of S$600,000;
  • Property tax rebates of up to 30% for the tourism sector and 15% for other affected sectors; and
  • A temporary bridging loan programme for one year and up to S$1 million for enterprises in the tourism sector.

Singapore’s Solidarity Budget of 6 April 2020 added enhancements to a number of the schemes already in place.

Temporary measures scheme
Subsequent legislation has provided indirect financial support in the form of temporary relief for businesses from legal action under certain contractual obligations.

MAS COVID-19 support scheme
The Monetary Authority of Singapore (MAS) has announced a S$125 million support package for the financial services and fintech sectors, including:

  • Enhanced funding support (80% co-funding of digital solutions up to S$120,000); and
  • Training support, innovation and productivity schemes.

Jobs Support Scheme
Under the JSS, the Government will fund a percentage of the first S$4,600 of gross monthly wages paid to each local employee for nine months. The first pay-out under this scheme was made to 140,000 employers on 15 April 2020.

There are three levels of support for employers in different sectors:

  • Aviation and tourism. The JSS scheme will fund 75% of the first $4,600 of gross monthly wages per local employee;
  • Food services. The JSS scheme will fund 50% of the first $4,600 of gross monthly wages per local employee; and
  • All other sectors. The JSS scheme will fund 25% of the first $4,600 of gross monthly wages per local employee.

In addition, on 21 April 2020, the government announced an enhancement to the JSS. With the temporary enhancements to the JSS scheme, the JSS payout for the month of April 2020 and May 2020 were raised to provide a 75% wage support to all businesses in respect of wages paid in April 2020 and May 2020. The wage support for the other months will remain unchanged. The temporary enhancements were to be disbursed in April 2020 and May 2020 for the respective month which the wages are paid.

The Government has also extended the JSS payout, to cover wages of employees of a company who are also shareholders and directors of the company. This support will only apply to companies that were registered on or before 20 April 2020, and for the wages of shareholder-directors with Assessable Income of S$100,000 or less for Year of Assessment 2019. The May 2020 and subsequent JSS payouts will include support for qualifying shareholder-directors. The May 2020 payout will also include back-payment for companies with qualifying shareholder-directors whose wages were excluded from the first JSS payout in April 2020.

Similar to the arrangement above, the May 2020 wage top-up will first be computed based on wages paid in November 2019. Subsequent JSS payouts will be adjusted to account for actual wages paid in May 2020 compared to November 2019.

Self-employed persons Income Relief Scheme
The SIRS scheme which gives eligible self-employed persons (SEPs) $1,000 monthly for 9 months. To qualify, SEPs must:

  • Have started work as an SEP on or before 25 Mar 2020;
  • Earn a net trade income of not more than S$100,000;
  • Have no employment income, or in the case of dual status SEPs, income earned as an employee must not be more than S$2,300 per month (for married Singapore SEPs to qualify, the assessable income of the spouse must be S$70,000 or less);
  • Live in a property with annual value not more than S$21,000; and
  • Not own two or more properties (for married Singapore SEPs to qualify, the SEP and spouse together must not own two or more properties).

Temporary measures scheme
New legislation has provided for temporary measures which effectively suspend contractual obligations in certain categories of contracts. Contracts and parties affected by this bill include:

  • leases or licences for non-residential immovable property (e.g. a lease for factory premises)
  • construction contracts or supply contracts (e.g. for the supply of building materials);
  • loan facilities granted by a bank or finance company to SMEs (turnover of not more than S$100 million) where loans are fully or partially secured against commercial or industrial immovable property, plant, machinery or other equipment used for business purposes in Singapore;
  • contracts for provision of goods and services (e.g. venues and catering);
  • certain contracts for goods or services for visitors to Singapore, domestic tourists or outbound tourists or promotion of tourism; and
  • certain hire purchase agreements (for example, commercial vehicles).

MAS COVID-19 support scheme
Financial institutions (with less than 200 employees) and fintech companies (certified by the Singapore Fintech Association) will qualify for the Digital Acceleration Grant of up to 80% co-funding from MAS, which has two tracks:

  • Industry Pilot. A joint project involving at least three eligible participating entities may apply for funding support of S$100,000 per entity per project, capped at two years from implementation;
  • Institution Project. An eligible participating entity may apply for funding support of S$120,000 capped at one year.

The Digital Accelerator Grant and COVID-19 Support Scheme are an extension and enhancement of the Financial Sector Technology and Innovation scheme (FSTI) which was due to expire in June 2020. The extended and enhanced scheme is due to end on 31 December 2021 and will be reduced to 70% co-funding from 1 January 2022.

The various schemes discussed are all funded by the Singapore government and from Singapore’s reserves. Taken together, the government’s response to the coronavirus crisis will total S$59.9 billion, or about 12% of Singapore’s GDP. The overall budget deficit for FY2020 will increase to S$44.3 billion or 8.9% of GDP.