Coronavirus: Aid For SMEs And The Self-Employed

The activities of small enterprises and the self-employed are particularly at risk from COVID-19. Luxembourg’s authorities have therefore put in place a number of measures, mainly financial, social and fiscal, to support SMEs during this difficult period.
by: Marc Auxenfants
photo: Brooke Cagle on Unsplash
1. Investment aid

In addition to the usual investment aid measures, the Directorate-General for the Self-Employed will offer specific assistance to businesses in the area of hygiene. The application can be addressed to the Service des Aides aux PME demandes d’aides en matière d’investissement.

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2. Additional aid in response to temporary financial difficulties

In addition, a draft law provides an aid scheme for companies facing temporary financial difficulties as a result of COVID-19.

In order to benefit from it, companies must provide proof that the pandemic has a harmful impact on their economic activities, or are experiencing temporary financial difficulties, and that there is a causal link between these difficulties and COVID-19.

The aid should also cover up to 50% of eligible costs, including staff costs (capped at 2.5 times the minimum social wage) and rental costs (capped at EUR 10,000/month). The aid is set at a maximum of EUR 500,000 per single undertaking (group). It will be paid in the form of a recoverable advance.

3. Social aid for the cultural sector

This bill introduces a social aid scheme for independent and professional performing artists during this time.

The text provides for social assistance for self-employed professional artists, with the possibility of paying monthly social assistance of up to the minimum social wage for qualified persons; additional daily allowances, and up to 20 per diems/month in the event of involuntary inactivity.

This additional social assistance is granted provided the applicant demonstrates that the lack of artistic activity is directly related to the exceptional event (e.g. cancellation of an exhibition, film productions or failure to receive commissions to produce artistic works).

The text also introduces a stimulus during the period of involuntary inactivity by reducing the income conditions required to qualify for aid schemes in proportion to the duration of the situation.

Subsidies initially granted by the Ministry of Culture for cancelled projects will be maintained. The latter is willing to maintain its commitment on the condition that the commitments made to the artists are also respected.

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4. Short-time work and reimbursement for hours off work

Companies that have had to shut down their activities completely or partially or that no longer have enough work as a result of the pandemic can benefit from short-time working measures, in cases of force majeure.

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Employees in the cultural sector are also eligible for these measures.

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These take the form of reimbursement of their staff salaries for time off work. This reimbursement is limited to 80% of the normal wage, capped at 250% of the social minimum wage for unskilled workers.

Advances may be paid on the basis of the actual wage bill.

Beware of fraudsters: reimbursement declarations will be subject to ex-post control. Erroneous/fraudulent declarations may give rise to forced reimbursement without prejudice to legal proceedings.

Claims can be submitted either through a fast-track procedure for companies directly impacted by a government decision or through measures for short-time working, in case of force majeure linked to COVID-19.

For the fast-track procedure, the request must be made to ADEM, via a dedicated website currently under development. This request will be taken into account retroactively from 16 March, 2020.

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Within the framework of the measures for partial unemployment, in cases of force majeure linked to COVID-19, applications are to be made to the Secretariat of the Comité de Conjoncture, which is a part of the Ministry of the Economy.

5. Fiscal Support

Businesses and self-employed persons who are experiencing liquidity problems due to COVID-19, can benefit from a cancellation of their quarterly advances of (community) income tax and municipal business tax for the first two quarters of 2020.

They may also have a payment period for the income tax, the municipal business tax and the wealth tax. All requests for cancellation of advances and payment deadlines will automatically be accepted by the administration.

The deadline for submitting tax returns has also been extended to 30 June, 2020. This decision applies to legal entities and individuals, as well as to taxpayers wishing to request, modify or revoke their individual tax election.

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6. Bank guarantee

For companies in need of a bank loan or a line of credit, the House of Entrepreneurship of the Luxembourg Chamber of Commerce offers a specific guarantee in the form of a bank guarantee through its Mutualité de Cautionnement.

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The guarantee is insured for up to 50% of the credit, to a maximum amount of 250,000 euros per bond.

Companies wishing to take advantage of this guarantee must apply directly through their banks, that will decide on the release of the credit. The time limits for the processing have been reduced to 24 hours.

Helpline for companies

Although its counters are closed to the public, the House of Entrepreneurship continues to provide a remote assistance service for start-up applications, administrative procedures, VAT and social security questions. The House of Entrepreneurship offers a dedicated support service, by phone (42 3939-445) and email at covid19(at) or info(at)
Note: The helpline does not answer health-related questions.

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This article was first published in Silicon Luxembourg magazine (special Covid edition “Hope”). Download now.

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