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Emergency aid for Swiss firms in response to COVID-19 – an overview

Because measures by Switzerland's Federal government to curb the outbreak of COVID-19 through the passage of "COVID-19 Ordinance 2" substantially affected several industry sectors, the Federal government granted economic relief and emergency aid in the amount of CHF 10 billion on 13 March 2020 and an extended package of measures amounting to CHF 32 billion on 20 March 2020. This aid will be available via expedited distribution.

Legal standstill in debt collection and Easter holiday extension for civil and administrative proceedings

On 18 March 2020, the Federal government implemented a legal standstill in debt collection (article 62 SchKG). In consideration of the regular Easter debt collection holidays, this reprieve will last until 19 April 2020 during which time no debt collection documents may be delivered except for interim and urgent measures, such as attachment proceedings according to article 56 SchKG. The legal standstill should bring immediate relief to firms suffering from financial difficulties due to the government's exceptional measures. The Federal Council is, however, aware that the legal standstill is not a sufficient instrument to offset these difficulties over the long term.

In addition, on 20 March 2020 the Federal Council announced a standstill in civil and administrative proceedings of all deadlines under Federal or Cantonal procedural laws that would have stood still during the Easter holidays. This extended standstill began on 21 March 2020 and will last until 19 April 2020. It includes deadlines set by courts or authorities whose end dates fall within this timeframe.

Immediate financial measures

The Federal government also implemented additional interim measures to provide further relief to the Swiss economy, which include:

  • Short-time working compensation: On 20 March 2020, the Federal government reduced the waiting period (Karenzfrist) for short-time working compensation to zero days. The measure protects the liquidity of firms and grants them access to immediate unemployment insurance support. Furthermore, the Federal Council announced that this measure will be extended to fixed-term employment relationships, apprentices and the persons in a position comparable to that of an employer.
  • Guaranteed bank loans: Loans are available under the following circumstances:
    • Four approved cooperatives are offering firms irrespective of their size guarantees of up to CHF 1 million. The participating institutions include three regional cooperatives (Cautionnement romand, BG Mitte and BG Ost) and one cooperative focused on business involving women entrepreneurs (SAFFA).
    • Banks and not the federal government will be creditors and guarantee cooperatives are acting as collateral providers. This information sheet (in German) provides an overview.
    • Measures already implemented by the Federal government (valid until the end of 2020) cover the fees for application review and the risk premium for the guarantee's first year. Application forms that partially cover COVID-19-related credits are available online. An important requirement for a guarantee is providing evidence that the business was profitable previously under normal conditions. It remains to be seen to what extent the additional measures announced by the Federal Council on 20 March 2020 will modify these requirements since the Federal Council announced credits of up to CHF 500,000 to be available “within 30 minutes”.
  • Further measures: Various additional measures for the sport and cultural sectors have been implemented, including à-fonds-perdu contributions for voluntary sports organisations and interest-free loans for professional teams. Overall, CHF 100 million has been allocated to sports and CHF 280 million in emergency aid to the cultural sector.

Cantons are responsible for enforcing measures and have implemented various other support systems, such as guarantees for bank loans and specific financial aid for the self-employed.

Further bridge loans

In its 20 March 2020 press conference, the Federal Council announced further aid in the amount of CHF 32 billion. The corresponding emergency ordinance with further details is expected midweek, on or around 25 March 2020.

To safeguard the liquidity of the Swiss economy, the Federal government has announced additional guarantees in the amount of CHF 20 billion using the existing structure of the guarantee cooperatives. The Federal government will provide 100% guarantees for credits of up to CHF 500,000 so that banks can pay out these credits in an uncomplicated way. The government will guarantee up to 85% of credits between CHF 500,000 and CHF 20 million. Credits above CHF 20 million are currently subject to further analysis. Firms may contact their main banks to apply for these bridge credits, which are expected to be available on Thursday, 26 March 2020.

Additional measures to safeguard liquidity include a payment deferral for social security insurance and extended delays for tax payments.

To be fully implemented, the emergency credit needs the approval of the Finance Delegation of the Federal Councils.

State aid under Swiss law

Switzerland does not have specific state-aid control legislation. Nevertheless, public support in the form of financial aid and compensations is subject to certain legal rules, such as: the measures must fulfill their purpose in an economic and effective way and they must be uniform and fair. The principle of neutrality in competition also applies to Switzerland to avoid any distortions in competition. In the air transport sector, special rules apply.

For more information on the economic aid available to Swiss firms during this crisis, contact your regular CMS advisor or our further CMS experts.


Portrait of Kaspar Landolt
Dr Kaspar Landolt, LL.M.
Fabian Martens, LL.M., LL.M., MA