Relief from COVID-hardship regulations
On 13 January 2021, the Federal Council decided to tighten the measures to combat the coronavirus (COVID-19) and to relax the hardship regulations. The Ordinance on Hardship Measures for Companies in Connection with the Covid 19 Epidemic(Covid 19 Hardship Ordinance) was amended. The adopted amendments will enter into force on 14 January 2021.
"Automatic" hardship cases
Businesses that have been closed for a total of at least 40 calendar days since 1 November 2020 due to official measures can now submit a hardship case application without providing evidence of a decline in turnover. These include in particular restaurants, bars and discotheques as well as leisure and entertainment businesses. Businesses are thus "automatically" considered hardship cases if they are closed for 40 days.
Assessment basis
Businesses that do not meet the 40-day closure requirement can now also claim declines in turnover for the months of January to June 2021. As a result, the turnover of the last 12 months can be used as the assessment basis instead of the annual turnover for 2020. This should help in particular businesses that generate a significant part of their turnover during the winter season to (nevertheless) qualify as a hardship case.
Financial ceilings
A maximum of 20% (previously 10%) of the decline in turnover or CHF 750,000 (previously CHF 500,000) is paid out per company. The cantons have a total of around CHF 2.5 billion at their disposal. In addition, each canton was given the option of increasing the absolute upper limit of aid to CHF 1.5 million if the owners of the affected company contribute at least the same amount of fresh equity or if lenders waive their claims.
Date of payment
Hardship assistance will be paid out in more than half of the cantons already in the current month (January 2021). As of next month, all cantons (with a few exceptions) should be ready for payment.
Temporal shortening of the ban on distributions
The Federal Council has shortened the ban on paying dividends or royalties or repaying capital contributions to owners to three years or until the repayment of the hardship aid received (from five years previously). Furthermore, the company may not make loans to its owners during this period (Art. 6 lit. a Covid-19 Hardship Ordinance).
Administrative facilitations
In addition, there are further administrative facilitations for companies that are closed by official measures. The details can be found in the ordinance. However, applicants still have to prove that they are profitable or viable (Art. 4 Covid 19 Hardship Case Ordinance).
Examination of new Covid solidarity guarantees
Furthermore, the Federal Council will examine reactivating the Covid solidarity guarantees if the economic situation should deteriorate sharply due to a Third Wave.
Responsibility for processing the application
An application for hardship must be submitted to the canton in which the applicant was domiciled on 1 October 2020. The cantonal contact details can be found at covid19.easygov.swiss.
You can find further information on the adopted amendments here.
Wicki Partners AG will be very happy to assist you with the preparation of your application or any other legal questions in connection with the Covid 19 Hardship Ordinance. Please contact Balthasar Wicki or Sebastian Wälti directly.