Important news for small business owners impacted by coronavirus closures in the Czech Republic

How can businesses benefit from the newest Czech measures against economic damages caused by the coronavirus?

Lukáš Vajda

Written by Lukáš Vajda
Published on 01.06.2020 12:58 (updated on 01.06.2020)

In an effort to aid both employers and businesses, the Czech government is offering financial support to those affected by the pandemic. If you are one of those individuals or businesses who have experienced a loss of income or economic hardship during the state of emergency, you should be entitled to support.

The Czech government has now adopted additional measures to support natural and legal persons affected by the pandemic. What are these new measures from which businesses can now benefit?

We asked Lukáš Vajda of Sniehotta & Vajda Legal, a Prague-based law firm that specializes in providing legal services to foreign companies, managers and expats in general to give an up-to-date overview of the situation that reflects legislation passed from the beginning of the lockdown measures in March up until the most recently announced legislation last week.

Compensation bonus for shareholders of limited liability companies

Shareholders of small limited liability company (společnost s ručením omezeným) will be able to apply for a compensation bonus, currently, a one-time assistance provided at request for the period from March 12, 2020 to June 8, 2020 in the amount of CZK 500 per day. A shareholder can thus receive support up to CZK 44,500. It is designated for companies with a maximum of two shareholders or companies with more shareholders who are members of one family. This benefit is meant to help recover economic damage caused by government measures. It basically copies the principles of the same benefit that is already provided to freelancers.

Now is the best time to promote your business and get much needed visibility. Check all advertising opportunities with Expats.cz or let us help you find the best solution to get you seen. 

Shareholders must meet several conditions for obtaining the bonus, especially they cannot be employees in other corporation and the turnover of the company for the previous tax period (the year 2019) or the expected turnover for the year 2020 must exceed CZK 180,000. Furthermore, the company cannot be in bankruptcy or liquidation. A shareholder can apply for the compensation bonus for only one company. The shareholders will submit a simple application through the Financial Administration (finanční správa) containing a statutory declaration (affidavit) stating that the shareholder has met the conditions for this bonus.

The Parliament adopted the law last week and it was already signed by the President and will be now published in the Collection of Laws. We expect that the shareholders will be entitled to apply for a compensation bonus in early June.

To apply for this benefit or read more visit www.financnisprava.cz, www.mpo.cz.

A postponement of payments for social security insurance

The companies as employers will be able to pay social insurance premiums in the amount of 24.8 % of wages for May, June, and July 2020 until October 20, 2020. The employers are still obliged to pay employee health insurance premiums in the amount of 6.5 % of wages. However, there is an obligation to pay a lower penalty of 0,01 % of the debt per day (this is a reduced penalty from a regular amount of 0.05 % of debt per day). Employers do not have to pay a penalty that does not exceed 1,000 CZK. The law entered into force recently.

AGENCY PROPERTIES

Apartment for rent, 3+kk - 2 bedrooms, 84m<sup>2</sup>

Apartment for rent, 3+kk - 2 bedrooms, 84m2

Kroftova, Praha 5 - Smíchov

Apartment for rent, 4+kk - 3 bedrooms, 99m<sup>2</sup>

Apartment for rent, 4+kk - 3 bedrooms, 99m2

Jindřicha Plachty, Praha 5 - Smíchov

Apartment for rent, 2+1 - 1 bedroom, 77m<sup>2</sup>

Apartment for rent, 2+1 - 1 bedroom, 77m2

Chopinova, Praha 2 - Vinohrady

Apartment for rent, 1+1 - Studio, 42m<sup>2</sup>

Apartment for rent, 1+1 - Studio, 42m2

Viktora Huga, Praha 5 - Smíchov

PRIVATE PROPERTIES

Apartment for rent, 4+kk - 3 bedrooms, 125m<sup>2</sup>

Apartment for rent, 4+kk - 3 bedrooms, 125m2

Pod svahem, Praha 4 - Braník

Apartment for rent, 2+kk - 1 bedroom, 57m<sup>2</sup>

Apartment for rent, 2+kk - 1 bedroom, 57m2

Heřmanova, Praha 7 - Holešovice

Apartment for rent, Flatshare, m<sup>2</sup>

Apartment for rent, Flatshare, m2

Příběnická, Praha 3 - Žižkov

Apartment for rent, 2+kk - 1 bedroom, 50m<sup>2</sup>

Apartment for rent, 2+kk - 1 bedroom, 50m2

Vlašská, Praha 1 - Malá Strana

A remission of payments for social security insurance

In connection with the payments of social security insurance there is an interesting bill that should be mentioned. The Czech government approved legislation that remits employers of up to 50 employees to pay insurance premiums in the amount of 24,8 % of wages for June, July and August. It is intended to preserve jobs and avoid an increase in unemployment. To obtain this benefit, employers are obliged not to dismiss more than 10 % of employees and maintain at least 90% of wages at the level of March 2020.

The bill must be passed through the legislative process.

To read more visit www.mpsv.cz.

AGENCY PROPERTIES

Apartment for rent, 3+kk - 2 bedrooms, 84m<sup>2</sup>

Apartment for rent, 3+kk - 2 bedrooms, 84m2

Kroftova, Praha 5 - Smíchov

Apartment for rent, 4+kk - 3 bedrooms, 99m<sup>2</sup>

Apartment for rent, 4+kk - 3 bedrooms, 99m2

Jindřicha Plachty, Praha 5 - Smíchov

Apartment for rent, 2+1 - 1 bedroom, 77m<sup>2</sup>

Apartment for rent, 2+1 - 1 bedroom, 77m2

Chopinova, Praha 2 - Vinohrady

Apartment for rent, 1+1 - Studio, 42m<sup>2</sup>

Apartment for rent, 1+1 - Studio, 42m2

Viktora Huga, Praha 5 - Smíchov

Covid III programme

This programme has been already launched and it applies to projects carried out in the territory of the Czech Republic including Prague. It is designated for freelancers and enterprises with up to 500 employees whose economic activities were reduced due to the COVID-19 outbreak and the related state measures.

It consists of providing a bank guarantee to the loans of the cooperating banks. Businesses with up to 250 employees are able to apply for a bank guarantee to the amount up to 90% of the loan and businesses with more than 250 up to 500 employees are able to benefit from a bank guarantee to the amount up to 80% of the loan. The period shall not exceed three years. This aid will cover operating loans up to CZK 50 million (intended for payment of wages, rent, energy payments, or purchase of supplies and materials, etc.).

To read more visit www.cmzrb.cz.

COVID – Rent programme

The Czech government discussed a new subsidy programme according to which the state shall pay a part of the rent for the second quarter of 2020. It is designated for businesses affected by the direct measures caused by the spread of COVID-19. Entrepreneurs will be able to use it if they could not provide goods and services in their premises because of state measures related to the coronavirus at least for a part of the period from March 13, 2020 to 30 June 30, 2020. Pursuant to this model the landlord shall provide a discount of 30% of the rent, the tenant shall pay 20% of the rent and the state shall contribute by 50% of the rent. The programme will be now forwarded to the European Commission for notification. More information will be published by the Ministry of Industry and Trade after the notification.

To read more visit www.mpo.cz.

Bonus tip: Increase your visibility

Does your business need visibility after COVID-19? Expats.cz has played a vital role in getting hundreds of news articles and additional information about the coronavirus pandemic to it’s network of English speakers in Prague across multiple channels. We can help you kick off your business with newfound awareness. A member of our sales team will find the best way to introduce your service to the local community via one of our custom packages.