With the 2019 Novel Coronavirus (COVID-19) continuing to spread globally, the effort to contain the viral outbreak by governments and health organisations has put pressure on major economies. Many companies are facing critical challenges, with travel restrictions across a number of countries disrupting supply chains and existing contractual obligations, employers having concerns over the well-being of staff members, and needing to ensure that they are fully aware of their legal obligations to their employees, as well as issues in a number of other areas, including in relation to intellectual property and data.
To tackle the financial disruption, the Finnish Government has decided on a number of financial support measures for the Finnish economy. In addition, for example the Finnish Tax Administration, pension insurance companies, credit institutions, Finnvera and Business Finland have been exploring ways to relief the economic stress many Finnish companies are going to experience during the months to come.
Small and medium size enterprises especially now have an opportunity to benefit from the financial support being offered and arrange their working capital financing to better face the upcoming pressure. Part of the declared packages and reliefs can already be applied. Please see the below table for a concise description on the most substantial support actions declared to date and instructions to utilise them.
Type of Financial Support
Who is Eligible?
How to Apply?
Two new financing alternatives for businesses in distress for preliminary studies (up to 10,000 euros) and development funding (up to 100,000 euros)
Companies can shorten the project content and cost reporting frequency meaning companies can receive payments for project costs faster
It is possible to get repayment-free periods for loans
The funding terms and conditions pertaining to funding can be flexibly extended
More flexible and faster decision making; first funding decisions have been made on 20 March 2020
Government has granted additional funds to Business Finland, total volume of the support 700 million euros
SMEs and midcap companies with six or more employees
Both new financing alternatives cannot be applied for at the same time
Targeted for companies within tourism or creative industries
All industries whose supply chains have been or will be impacted by the coronavirus epidemic
Questions regarding ongoing projects through competent ELY centre *
Support for sole entrepreneurs to be applied for through the municipality
Amount of the support 2,000 euros
Full-time self-employed entrepreneur operating in Finland, regardless of the legal form of the operations and the form of financing. A sole entrepreneur is defined as an entrepreneur or a self-employed person who does not employ any other person, including freelancer entrepreneurs
The condition for granting the support is a significant weakened economic situation and the decrease in turnover due to COVID-19 after 31 December 2019. The support is discretionary
The municipalities shall inform as soon as the support is available
The support is temporary and can be applied for until 30 September 2020
The Government will implement a temporary reduction in the employers’ pension insurance contribution, as proposed by the labour market organisations. The temporary reduction is 2.6 percentage points. This will be implemented as quickly as possible, but no later than 1 June 2020, and it will remain in force until 31 December 2020.
Borrowing back from the TyEL insurance fund is made easier by Finnvera guarantees
below for further guidance from different pension insurance companies:
Elo’s corporate and self-employed customers have the possibility to apply for this penalty interest-free payment time to insurance contribution invoices (YEL and TyEL insurance policies) with a due date falling between 20 March 2020 and 30 June 2020. The insurance contribution interest (2%), however, is always taken into consideration in the calculation of your pension insurance contribution.
Our customers need not be concerned about the due dates for any YEL or TyEL invoices due between 20 March 2020 and 30 June 2020. The collection procedure for these invoices is not being pursued for the time being.
YEL: We have postponed the due dates of your YEL payments by three months. Changes take effect automatically—you don't need to do anything. We will charge an insurance contribution interest of 2% for the time between the original and the new due date. This interest will be added to upcoming invoices. You may choose to pay the invoice before the new due date without notice. In this case, the insurance contribution interest will only be charged for the time between the original due date and the date of payment.
TyEL: If you are unable to pay the TyEL insurance contribution on due date, you can apply for the postponement of the due dates concerning bills due between 20 March 2020 and 30 June 2020 (regarding salary payments from February to May) before the due date. You can postpone the due dates within the mentioned time period to a maximum of five months from the month the salary is paid
The insurance contribution interest (2%), however, is always taken into consideration in the calculation of your pension insurance contribution
TyEL: The payment period may, upon request, be extended until the end of the fifth month following the month when the salary is paid. If the invoice falls due, for example, on 31 May 2020, the payment period can be extended until 30 September 2020
This possibility applies to contributions for salaries that are paid between February and May. The insurance contribution interest of 2% will be added to the payment. No penalty interest will be charged
YEL: The payment period may, upon request, be extended by three months. If the invoice falls due, for example, on 20 March 2020, the payment period can be extended until 20 June 2020. This possibility applies to invoices falling due between 20 March 2020 and 30 June 2020
The insurance contribution interest of 2% will be added to the payment. No penalty interest will be charged
Varma's TyEL-customers usually have the opportunity for a two month relief in TyEL payment schedules. Now in addition to that, you can apply to postpone the due dates of insurance payments based on salaries paid between February and May for up to three months. For example payments due for salaries in March could be postponed until August
Varma's customers have the possibility to apply for penalty interest-free payment time to YEL insurance contribution invoices with a due date falling between 20 April 2020 and 30 June 2020. One extra month of payment time has already been granted for all YEL payments due on 20 March 2020
If requirements are met, you can apply for a flexible, 10-20 % reduced insurance payment fee
Changes in the YEL payment schedule, as long as half of the years YEL payments are due before 1 August 2020
Corporate customers of each pension insurance company
To borrow back from the TyEL insurance fund, the company is required to have a guarantee (which the company can apply for example from Finnvera)
Companies to contact their own pension insurance service provider
Pension insurance companies are currently updating their online customer service platforms for the customers to apply for the new arrangements online
The European Commission has adopted a Temporary Framework to use the full flexibility under State aid rules to support the economy in the context of the COVID-19 outbreak. The new Temporary Framework according to the Commission's press release allows for example direct grants and selective tax advantages for a company up to 800,000 euros to address its urgent liquidity needs, state guarantees for loans taken by companies from banks, subsidised public loans to companies, and safeguards for banks that channel State aid to the companies. Commission enables Member States to support companies under the exceptional circumstances of the outbreak and the Temporary Framework is effective until December 2020. Companies looking to apply for the available financing options should still carefully consider state aid compliance of support received and applied for.
Temporary changes in employment legislation entered into force on April 1, 2020. Amendments shortened the layoff notice period, shortened the minimum cooperation consultation period preceding layoffs and enable layoffs also for fixed-term employees. Changes will remain in force until June 30, 2020.
Additionally some of the lessors of business premises such as Ilmarinen* and Varma* have been willing to negotiate arrangements to rent payments. Companies in distress should contact their lessors at an early stage in order negotiate about possible payment arrangements.
The Finnish Government and European Commission are constantly seeking new means of facilitating the financing and economical resilience of Finnish companies and the above details are subject to change as the situation develops.