Daily news on COVID-19
Business in Latvia
The COVID-19 is dominating the news cycle in media and personal conversations, and it must be dominating your professional concerns too – to help you navigate through the most important news, we will publish daily updates in this article.
➡️ The Ministry of Welfare is considering changing the period of receipt of unemployment benefits for certain groups.
➡️ In confirmed COVID-19 cases and for those who are in quarantine, the medical certificate will be provided on the first day, and starting from the second day the sickness benefit in the amount of 80% of the sickness beneficiary’s average insurance contributions salary will be paid by the State.
➡️ Employee salary compensation of up to 75%, but no more than 700 euro per calendar month, will be limited to specific sectors suffering from Covid-19 crisis. Eligible sectors and further criteria will be stipulated by the Cabinet of Ministers.
➡️ The Cabinet of Ministers will decide on support measures to companies and employees with payments of up to 75% of the employee salaries (with limit of 700 EUR per month) during downtime caused by Covid-19;
➡️ Downtime compensation for employees (75% from the salary, not exceeding EUR 700 per month) to specific sectors;
➡️ On 20 March 2020, the European Data Protection Board published a statement on the processing of personal data in the context of the COVID-19 outbreak, focusing on the legal framework and processing principles of the data processing as well as providing answers on the processing of employees' personal data during the COVID-19 outbreak.
➡️ Foreigners residing lawfully in the Republic of Latvia until March 13, 2020 and whose legal residence period expired after March 13, 2020 may continue to reside in the Republic of Latvia during an emergency without obtaining a new residence permit or visa;
➡️ Starting from 23 March, 2020 the Office of Citizenship and Migration Affairs will cancel all on-site reception. All appointments made by March 20, 2020 will be cancelled.
➡️ Since the Office of Citizenship and Migration Affairs has cancelled all appointments and the issue of identity documents is permitted only in exceptional cases, if the identity document has expired, this expired document can be used to identify the person during an emergency.
➡️ Office of Citizenship and Migration Affairs until April 14, 2020 has stopped providing on-site residence permit and visa application services. The application process is currently being revised and adjustments are likely to be announced in upcoming days;
Commercial Law and commercial contracts
➡️ On 21 March 2020, the Minister of Economic Affairs issued the order on social distancing in trading venues, imposing additional requirements for trading venues to guarantee consumer safety and health.
➡️ During the state of emergency all licenses of gambling operators are suspended. Furthermore, it is forbidden to organize gambling and lotteries except interactive gambling, lotteries and scratch ticket lotteries during the state of emergency.
➡️ Distance sales (including online shops) of alcohol is now allowed.
➡️ Further amendments to the Commercial Law introduces remote participation and electronic voting in the shareholder meetings of companies.
➡️ Many terms and procedural deadlines in civil proceedings will be extended, including certain deadlines in connection with commercial pledges and enforcement of judgement.
➡️ In certain circumstances Covid-19 could be considered as a force majeure event, Latvian Chamber of Commerce and Industry issues force majeure statements;
➡️ Companies operating in specific sectors may apply for extension of the tax payments up to three years, no late payment penalties during this period will apply.
➡️ From April 1, 2020 until December 31, 2020, the procedure for reimbursing overpaid value added tax will be governed by the draft law, guaranteeing faster refund of the overpaid value added tax.
➡️ Deferral of tax payments and other tax reliefs;
➡️Yesterday the European Parliament adopted three proposals to help people and business tackle the COVID-19 crisis. The approved measures are:
✔️The Corona Response Investment Initiative: €37 billion from available EU funds will be channeled to people, regions and countries that have been hit the hardest by the pandemic.
✔️The extension of the EU Solidarity Fund to cover public health emergencies. The measures will make up to €800 million available for European countries in 2020.
✔️Temporarily suspending EU rules on airport slots. This will stop air carriers from operating empty flights during the pandemic.
➡️The Bank of Latvia projects that due to COVID-19 the GDP of Latvia in 2020 will fall by 6.5%, the inflation is estimated to be at 0.5%.
➡️ The Government has amended regulations stipulating that all companies meeting financial criteria can benefit from deferred tax payment regime and from downtime allowance scheme for employees.
The general criteria is that operating income in March or April 2020 has to have decreased by at least 30% compared to the same respective month of 2019. In case the operating income would decrease by 20%, the entity is eligible for downtime allowance scheme if one of the following criteria is fulfilled:
✔️the company's exports amount to 10% of its total turnover or is at least EUR 500 000;
✔️the average gross monthly salary paid is at least EUR 800;
✔️long-term investments in fixed assets are not less than EUR 500 000.
➡️ The Government has adopted regulations stipulating sectors that shall receive priority support (including downtime allowance for employees). As anticipated regulations cover sectors like tourism, restaurants and bars, aviation, and education.
➡️ During the upcoming sessions the Government is planning to decide on additional criteria in order to extend its support to companies outside of sectors stipulated by the Government.
➡️ The Government has adopted regulations stipulating procedure how companies can receive working capital loans in amount of up to 1 million euro and state guarantees in amount of up to 5 million euro. The support measures are administered by state company ALTUM and companies can apply to receive these support measures starting from today (25 March 2020).
➡️ David Malpass, the President of the World Bank Group, issued his remarks from the G20 Finance Ministers conference call on the COVID-19 pandemic and stated that World bank Group could deploy as much as $150 billion over the next 15 months as support in order to tackle the major recession of the global economy;
➡️ The Cabinet of Ministers is still debating which sectors should receive primary support during Covid-19 crisis;
➡️ In the coming days, the government will decide which sectors will receive the Covid-19 crisis support.
➡️ Travel and hospitality sector companies will be the first beneficiaries of the State support.
➡️ The Cabinet of Ministers will separately determine sectors and other eligibility criteria for receipt of Covid-19 response support.
➡️ Companies affected by the Covid-19 crisis and renting premises from state institutions or state owned companies will not have to pay rent (or the rent will be reduced), interest on late rent payments or accrued contractual penalties.
➡️ Severe restrictions for creditors to submit insolvency applications until 1 September 2020.
➡️ The European Securities and Markets Authority announced that it will extend the start date of the reporting obligation of Securities Finance Transactions (under the Regulation (EU) 2015/2365 on transparency of securities) from 13 April 2020 to 13 July 2020.
➡️ The Cabinet of Ministers has decided on support measures for companies that has suffered due to Covid-19 crisis, including State guarantee and loan programme with the limit of 5 MEUR per company;
➡️ There will be one single law governing state support for businesses during Covid-19 crisis;
➡️ State guarantee and loan programme with the limit of 5 MEUR or 1MEUR per company;
➡️ Relief from obligation to pay rent, related interest, and late payment penalties payable to the state institutions and public companies;
➡️ In the upcoming days the Cabinet of Ministers will decide on further support to businesses in the form of credit guarantees, special loans, and other measures;
➡️ Yesterday the European Central Bank announced a EUR 750 billion Pandemic Emergency Purchase Programme. Purchases will be conducted until the end of 2020 and include assets eligible under the existing asset purchase programme (public sector securities).