Riga, July 14, LETA. The state will subsidize the salaries of the workers of the exporting companies affected by the Covid-19 crisis, allocating 51 million euros, according to the proposal of the Ministry of Economics (EM) supported by the government on Tuesday.
The government supported the rules developed by the MoE on support for exporting taxpayers to overcome the effects of the Covid-19 crisis. According to the State Revenue Service, 350 companies qualify for support. The available state budget funding for this purpose will be 51 million euros.
The support will take the form of a grant to compensate the economic operator for the wages of the Covid-19 crisis.
The support will be set at 25% of the mandatory state social insurance contributions paid by the particular company in 2019, but not more than 800,000 euros for a related group of persons.
Exporting taxpayers affected by the crisis will be eligible for support, the amount of exports of goods and services and the amount of delivery of goods and services in the territory of the European Union, except for Latvia, in 2019 reached at least one million euros.
Companies whose income from economic activities due to the Covid-19 crisis in one month in the period from April to June 2020, compared to the corresponding month of 2019, have decreased by 20%, will be eligible for support. Also, companies whose employees’ average monthly gross salary, for which mandatory state social insurance contributions have been paid, in 2019 is not less than 800 euros will be eligible for support. Also, the beneficiary will not be able to have a tax debt in excess of € 1,000.
It will be possible to apply for support until September 30 of this year, submit an application to the Latvian Investment and Development Agency (LIAA). LIAA will monitor the use of the allocated funds.
This support program has yet to be coordinated with the European Commission (EC), so support for companies in the tourism sector will be available once the EC has decided on the compatibility of business support with the European Union’s internal market.
The MoE stated that support would not be granted to areas such as arms and ammunition trade, tobacco production and trade, wholesale of beverages, accommodation and catering, real estate operations, travel and tourism services, meeting and trade fair organization services, creative, artistic and entertainment activities, sports activities, entertainment and recreation activities, gambling, fisheries and agriculture.
The Cabinet of Ministers also decided on Tuesday to invest 50 million euros in the establishment of a capital fund to support companies affected by the Covid-19 crisis.
The government today supported the regulations developed by the Ministry of Economics (EM) on capital investments in companies affected by the spread of Covid-19.
The fund will be overseen by Altum Development Finance Institution (“Altum”).
The purpose of the supported activities is to support economic operators who are in temporary difficulties due to the temporary impact of the Covid-19 virus, as well as economic operators who are ready to adapt or change their current business model as a result of the Covid-19 virus.
The available funding for business support is state budget funding, which will not exceed 50 million euros. The total amount of investments made by the Fund in one merchant may not exceed ten million euros.
The Fund will invest in merchants if a number of requirements are met at the same time, namely, the company must primarily engage in economic activities in Latvia; the total amount of private co-financing at the level of investment in the merchant is at least 50% of the total amount of investment; funding is provided together with private co-financiers on equal terms and with equal rights to all parties involved in proportion to the amount of their funding.
The Fund will invest in companies through a variety of financial instruments, such as equity investments, equity investments with another private investor, credit institution or other private equity fund in parallel, quasi-equity investments, including convertible loans, and corporate investments. bonds, including convertible bonds.
Entrepreneurs with a tax debt of more than EUR 1,000 or if the company is in financial difficulties will not be able to receive funding from the fund.
The state will subsidize the salaries of those working in the tourism sector, allocating 19.2 million euros, the proposal developed by the Ministry of Economics (MoE), supported by the government on Tuesday, envisages.
The Government supported the regulations developed by the MoE “Procedure for Granting Support to Economic Operators Affected by the Covid-19 Tourism Sector”, which determine the procedure and amount of support to be granted to a tourism economic operator significantly affected by the Covid-19 crisis.
The available state budget funding for this purpose will be 19.2 million euros. The support will take the form of a grant to compensate the economic operator for the wages of the Covid-19 crisis.
The support will be set at 30% of the mandatory state social insurance contributions paid by the specific company in 2019, but not more than 800,000 euros for a related group of persons.
Companies in the tourism and hospitality sector will be eligible for support, whose income from economic activity due to the Covid-19 crisis in one month in the period from April to June this year, compared to the corresponding month of 2019, has decreased by 30%.
Also, companies that do not have a tax debt administered by the State Revenue Service in the total amount exceeding 1000 euros will qualify for support, except for tax payments for which an extension of the payment term has been granted, an agreement on voluntary payment of taxes or an agreement has been concluded.
Today, the Cabinet of Ministers also decided on granting almost 28,490,923 euros in loans for municipal investment projects, providing local authorities with new opportunities to receive loans.
In the economic support plan forwarded by the Minister of Environmental Protection and Regional Development Juris Pūce, the Ministry of Environmental Protection and Regional Development (MEPRD) had submitted for consideration a draft order of the Cabinet of Ministers to support municipal investment projects to reduce the consequences of Covid-19 in the regions.
“In these times of uncertainty, when the economy is affected by Covid-19, the most important thing is work. People need a job – a stable income and a certain sense of security. MEPRD supports such municipal projects that can guarantee job opportunities for citizens and businesses this year. The responsibility of both national and local politicians is balanced to make decisions and prioritize support for those who can contribute to the economy and support the population, “Pūce points out.
In the second project application evaluation cycle, local governments submitted investment project applications to the MEPRD by 1 July. A total of 130 project applications were received from 43 municipalities. According to the assessment, it has been decided to provide support for 88 project applications for the total amount of EUR 37,998,419, of which EUR 28,490,923 is a state loan.