Lockdown status:
Is the country currently in lockdown, and to what extent?
No, Sweden has never had any lockdown during the COVID-19 outbreak.
Sweden is one of the few countries known for not closing down hotels and/or restaurants, other than placing general restrictions – and recommendations – covering all sectors (see details below).
Is there a timeline for easing lockdown, and what is it?
Some of the (general) restrictions are phasing out, such as the travel restrictions.
Regarding work of administrative personnel, the newly updated recommendation is still that, if possible, people should stay at home as much as possible and therefore working from home is encouraged.
Hospitality status:
Are hotels permitted to open?
Yes
Hotels have been permitted to stay open throughout the outbreak. The regulatory environment has steadily been building up to ensure the safety of the public (see below).
Are hotels required (or have they been advised to) implement social distancing measures?
Yes. These include:
- Social distancing
- Maximum capacities (50) of guests
- Ensuring adequate space between tables
- Providing written information to employees and customers such as marking safe distances on the floor
- Providing satisfactory sanitization/cleansing services
The regulations come from the health agency and are binding and breaches may result in sanctions.
No hotels have so far been subject to major sanctions for violation, but some restaurants have been closed because of non-compliance with the new regulations.
Are hotels required (or have they been advised to) implement any measures in relation to their staff?
Yes.
The health agency still (30 July) recommends that employees, if possible, and by consensus with management, should work from home. The recommendation runs until 31 December 2020, with the possibility of extension. The agency has noted that in sectors such as healthcare working from home is not possible.
The work-environment legislation states that the employer must do everything necessary to prevent the employee from being exposed to ill health or accidents. If an employee needs to work from home due to the risk of Covid-19, the employer is still responsible for ensuring that the employee's work environment is safe. The requirements in the regulations on the design of the workplace can usually be met whilst working from home, but it is important to think about, for example, lighting and ergonomics.
Latest government advice
Hotel facilities status:
Are hotel restaurants/bars permitted to be open for dining in, and what restrictions are in place?
Yes.
Restaurants and bars have been allowed to stay open throughout the pandemic. However, regulations have slowly come into force to ensure safety of customers (such as the social distancing requirements above). Click here to read more.
Are hotel leisure facilities (gyms, spas) permitted to be open, and what restrictions are in place?
Yes.
Leisure facilities are subject to the same social distancing rules set out above. They must also perform a risk assessment using the applicable risk assessment tool.
Outdoor activities are encouraged, but for indoor activities, the main regulations are:
- Limit the number of participants in the activities if possible.
- Make sure that there are sufficient amounts of signs and warnings.
- Clean toilets and surfaces of training equipment that are touched often.
Latest government advice
Government support:
Is the government providing support to businesses?
Yes.
Various support-programmes and benefits have been implemented by legislation and/or executive orders, for the hotel-sector, but some of the benefits have expired at the end of June, despite on-going crisis. Extensions are likely to be granted.
The most important support measures are the short time work-allowance, rent-rebate, lowered social-security fees and a so called general conversion aid (see below for details).
Short time work allowance
Short-time working means that employers can reduce their employees’ working hours and receive financial support from the central government to compensate for a significant part of the costs for keeping the employee.
- A short-time work allowance is a financial support whereby the employer’s costs for personnel can be reduced by more than one-half at the same time as the employee is receiving up to 90 % of his or her regular salary.
- Employers may reduce their employees’ working hours by 20%, 40% or 60%.
- 80% reduction in working hours can be applied for, for three months at a time.
- The salary ceiling for the financial support is SEK 44,000 per month.
- An employer may receive the financial support for a period of six calendar months, with the possibility of an extension for an additional three calendar months.
Cost distribution for the reduction of working hours
|
Level
|
Work hours
|
Salary drop
|
Employer
|
Government
|
Decreased salary costs
|
|
1
|
20
|
4%
|
1%
|
15%
|
19 %
|
|
2
|
40
|
6%
|
4%
|
30%
|
36 %
|
|
3
|
60
|
7,5%
|
7,5%
|
45%
|
53 %
|
|
4
|
80
|
12%
|
8%
|
60%
|
72%
|
Conversion aid
Companies that have lost a lot of sales under the pandemic crisis can apply for a so called conversion aid.
On 22 June, the applications for conversion aid opened. The conversion aid provides support for fixed costs but the company must have lost at least 30% of its sales during March-April 2020 compared with the same months in 2019.
Application for conversion aid is made via the Swedish Tax Agency ("Skatteverket"). The application is complex and must contain a report of the company's fixed costs such as rent, leasing and interest, as well as how much sales have decreased.
Here is the most important information about conversion aid.
- The applicant business can only receive support for fixed costs such as rent, leasing and other business-related, fixed costs.
- The aid does not cover salary costs.
- The aid covers, at best, up to 75 % of the company's fixed costs during March and April 2020.
- In order for the company to be entitled to the support, the company must have had a turnover of at least 250,000 SEK in the last financial year.
- Like most other types of aid, in the wake of pandemic crisis, the aid does not apply to companies that were insolvent already, reorganized or domiciled in a tax haven.
- In order to receive the conversion aid, the company must not have decided on a dividend during the period March-June 2020.
- If the support amounts to SEK 100,000 or more, an opinion from the auditor is required.
- The support is paid by the Swedish Tax Agency, and their ambition is that the support will be paid out approximately one week after the application has been received.
Public loans
A government loan-guarantee/security is proposed for small and mid-sized company's financing needs. The security means that the state guarantees 70 % of new bank loans to companies that have experienced financial difficulties due to the coronavirus, but which are otherwise "viable". The security is issued to the banks, which in turn issues loans to the companies. As a general rule, companies may borrow up to 75 million SEK. Companies apply for utilization of the security with a lending bank. Although the proposal is primarily aimed at small and medium-sized enterprises, there is no formal restriction on size for a company to be able to participate in the program.
Lowered social-security fees
The Government proposed a temporary reduction in employer contributions during the period 1 March - 30 June 2020. The reduction means that only the pension contribution of 10.21% must be paid (otherwise a total of 31,42%). The reduction is proposed to apply to up to 30 employees per company (regardless of the number of employees in the company) and up to a salary sum of 25,000 SEK per month according to information from the Government Offices. This means that the employer receives a relief of a maximum of 5,300 SEK per employee and month, i.e. a maximum of 159,000 SEK per company and month.
Temporary discount for rental costs in vulnerable industries
It is proposed that companies in vulnerable industries such as hotels, restaurants and retail have the opportunity for temporary rent reductions. The proposal is that the state should bear 50% of the rent reduction and up to 50% of the fixed rent. (see next section for more details)
Is there relief for commercial tenants?
No.
Although there have been demands to restrict landlords' legal remedies against non-paying commercial tenants, no legislation has been enacted. The Swedish government explains its position by referring to the support measures above, and also a temporary rent rebate subsidy – covering up to 50 % of a possible temporary rent settlement between the landlord and tenant (provided the amount is no more than 25 % higher than the original rent).
Claims of force majeure against the landlord are unlikely to be successful because the standard contracts provide only for suspension of the landlord's obligations. There is usually no corresponding provision in which the commercial tenant does not have to perform his obligations in the lease.
Since it is also in the landlord's own interest that the tenant's business survives, the most practical advice is therefore not to initiate force majeure claims but rather to discuss different types of payment rearrangements of the rent (and to take advantage of the relevant governmental support measures).
Local Contacts:
Gabriel Lidman and
Ersen Bethersen