Saturday 10/16/21
EPIDEMIC

New compensation for restaurants forced to close customer facilities

This new form of compensation would apply to restaurants and other food and beverage service businesses that are closed from 9 to 28 March 2021.
Woman-bar-laptop-kiss-t-shirt-entrepreneur-restaurant

Finnish government proposes that companies be paid compensation if they, due to an Act or an official order, have to keep their premises closed in order to stop the spread of the coronavirus.

According to the Ministry of Economic Affairs and Employment, this new form of compensation would apply to small and micro-sized enterprises that employ a maximum of 49 employees. "The Government will prepare a separate compensation for larger companies as soon as possible," the Ministry announced.

The Government submitted the proposal to Parliament on 18 March 2021 and it is due to enter into force on 12 April 2021. Companies would apply for the compensation at the State Treasury. Applications for the compensation could be accepted from the beginning of May.

For restaurants

This new form of compensation would apply to restaurants and other food and beverage service businesses that are closed from 9 to 28 March 2021 under the Act on Accommodation and Catering Operations. However, meals may be sold for takeaway. Such sales would be taken into account in the amount of compensation.

Compensation could also be paid to companies that the municipality or the Regional State Administrative Agency have the power to close under the Communicable Diseases Act. Such establishments include sports facilities, gyms, public saunas, swimming pools, spas and indoor playgrounds.  

The compensation would be paid to companies for the period of closure if they are closed for more than 15 days. If a company has restricted the number of customers in its premises but has not closed completely, it would not be entitled to compensation. These companies can apply for business cost support.

The amount of compensation

The amount of compensation would be based on the company’s costs in February 2021 and the share of the company’s business operations that the closure affects. Compensation would be paid for 100% of payroll costs and for 70% of other costs, such as rent.

Previously granted coronavirus support would be taken into consideration and the maximum amount of aid could not exceed 1.8 million euros as per the EU State aid rules.

If the closure of customer premises is extended by law or by decision of an authority after the company has submitted its first application for compensation, the company may apply for subsequent compensation in periods of at least 14 calendar days. In this way, companies will receive the support quicker. T

he reference period for the compensation would remain the same, that is, the amount of compensation would be based on the company’s costs in February 2021.

“Large companies are starting to near the limit of aid, 1.8 million euros, that they can receive under the EU State aid rules. Our negotiations with the European Commission on this matter are ongoing. However, we wanted to get the support to small companies out quickly. That is why there are two distinct support packages for small and large enterprises. Support for the event industry is also being prepared separately,” says Minister of Economic Affairs Mika Lintilä.

70 million euros

The total amount of compensation that will be paid to companies for closure is estimated at 70 million euros. About two-thirds of this amount is estimated to be used to support small and micro-sized enterprises and the remainder for large enterprises, for which the Government will prepare a separate proposal as soon as possible.

Micro-sized enterprise is a company that employs fewer than 10 persons and whose annual turnover or balance sheet total does not exceed 2 million euros. Small enterprise is a company that employs fewer than 50 persons and whose annual turnover or balance sheet total does not exceed 10 million euros.

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