EC approves 51 million euros support for Latvian export companies affected by Covid-19 / Article / LSM.lv

The European Commission has approved Latvia’s support program, with a budget of approximately 51 million euros, to support exporting companies in overcoming the Covid-19 crisis, the EC was informed in a statement to the media.

The program was approved under the temporary framework for State aid measures. This public support, which will take the form of direct grants, will cover up to 25% of the mandatory social security contributions paid by the beneficiaries.

The program will be available to companies in all sectors engaged in exports, but there are some exceptions set by Latvia, such as companies operating in the following areas: primary agricultural production, processing and marketing of agricultural products, fisheries and aquaculture, and the financial sector.

It is planned that this measure will benefit 350 companies.

The aim of the program is to meet the working capital needs of companies affected by the current crisis and to help them stay in business, start investing and keep jobs during and after the pandemic.

The Commission found that the Latvian program complied with the conditions of the EU’s temporary regulation. In particular, the aid per company will not exceed EUR 800 000 as set out in the Temporary Framework.

The Commission concluded that the measure was necessary, appropriate and proportionate to prevent a serious disturbance in the economy of a Member State. On this basis, the Commission approved the measure in accordance with EU state aid rules.

CONTEXT:

In mid-July, the government decided to allocate 51 million euros to support exporting companies.

Exporting companies will be able to apply for support:

• whose export volume of goods and services in 2019 reached at least 1 million euros;
• whose revenue from economic activity has decreased by 20% in one month between April and June 2020 compared to the corresponding month of 2019 due to the Covid-19 crisis;
• whose average monthly gross salary paid to employees, for which mandatory state social insurance contributions have been made, in 2019 is not less than 800 euros;
• who, as of the date of submission of the application, do not have a tax debt administered by the State Revenue Service in the total amount exceeding 1000 euros, except for tax payments for which an extension of the payment term has been granted, an agreement on voluntary tax payment or an agreement has been entered into.

The entrepreneur will receive support – a one-time grant or gift to compensate for the salary – in the amount of 25% of the mandatory state social insurance contributions paid in 2019, but not more than 800,000 euros. The amount of aid will be received by the economic operator in a single installment and will have to be used by the end of the year.

Covid-19 is intended to overcome the economic consequences of the crisis in Latvia specific state aid mechanisms Covid-19 affected companies, their employees, Covid-19 patients and all companies. Therefore mobilized by the state approximately EUR 4 billion. Support tools It will remain in Latvia until the end of the year.

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