Stabilisation and restructuring law in the Netherlands

On 17 March 2020 the Dutch government had announced extensive economic and financial measures the purpose of which was to help and assist Dutch companies in the context of the COVID 19 crisis. These measures were an extension of the ones announced previously on 12 March 2020. As time has progressed, new more stringent measures have taken effect. From 1 June 2020 a set of amended and new measures applied until 1 October 2020, as announced by the Dutch government on 20 May 2020. Further, on 28 Augustus, the Dutch government has announced that the financial support measures were also extended after 1 October 2020, ending on 30 June 2021. However, the conditions under which companies will qualify to benefit under these new measures have been further amended. In view of the most recent developments of the COVID 19 crisis, on 27 October 2020 the Dutch government has also reshaped certain conditions and extended certain financial support measures to additional affected economic sectors. The recent amendments focus on the applications of the support measures on a longer term and envisage supporting companies and entrepreneurs to adjust to the new (post-)pandemic economic situation and to enable new investments.

The measures in place are the following:

1. The SME guarantee scheme (Borgstelling MKB Kredieten (BMKB)) has been extended (BMKB-C)

This measure, the so-called BMKB-C-scheme, has been made available on 16 March 2020 in order to enable small and medium enterprises in the Netherlands that are affected by the coronavirus to attract financing up to amounts that would otherwise not have been granted. SMEs may apply for this extended scheme up to at least 30 June 2022. On 7 April 2020 and subsequently on 28 April 2020 and on 1 and 27 October 2020, the Dutch government has further extended the support under the extension of the SME guarantee. This measure applies until 1 April 2021.

The main terms of the BMKB-C-scheme are the following:

• The BMKB-C-scheme applies to small and medium enterprises in the Netherlands counting less than EUR 50 million revenue; less than 250 employees (FTEs); less than EUR 43 million balance sheet total and that have been incorporated for less than 3 years;
• Under the BMKB-C-scheme, credit needs may be financed by the government up to 75%. This financing is 90% covered by the government;
• The BMKB-C-scheme applies to credit arrangements amounting to a maximum of EUR 1.5 million;
• Applications for the BMKB-C-scheme are based on revenue tests and are exempted of the tests that are in place to ensure that the business lacks enough security to be granted a regular loan;
• The BMKB-C scheme allows for a maximum term of up to 16 quarters;
• The premium due under the SME guarantee scheme has been lowered from 3,9% to 2% for loans with a duration up to 8 quarters. For loans with a duration from 9 up to 16 quarters, the premium due amounts to 3%;
• The budget of the Dutch government to support this measure has been extended from EUR 765 million to EUR 1,5 billion;
• The BMKB-C extends the guarantee scheme to non-bank financiers in order to allow them to finance their present clients under the extended SME guarantee;
• The BMKB-C scheme has also been extended to bridge financing and current account credits with a duration of up to 2 years;
• The BMKB-C scheme lowers the personal collateral of the entrepreneur from 25% to 10%;
• Under the BMKB-C scheme, the bank will determine how repayment shall be made. Alternatives are (i) equal repayments increased by the interest on the outstanding balance (linear repayment); (ii) repayment all at once; (iii) repayment at the end of the credit term; or (iv) repayments subject to a redemption-free period;
• The BMKB-C scheme allows for and anticipated extension of the credit availability for SMEs up to EUR 300 million;
• The share of the loan for which the bank carries the risk according to the provisions of the BMKB-C scheme can alternatively be an overdraft (a new current account credit) or a higher overdraft limit (an increase of the existing current account credit);
• Under the BMKB-C scheme, extra lenient terms and conditions apply to startups and innovative enterprises; and
• In order to benefit for this measure, banks have to apply at the Dutch Enterprise Agency (Rijksdienst voor Ondernemend Nederland (RVO.nl)) while entrepreneurs apply directly via their lenders.

2. The Business loan guarantee scheme (GO) has been extended (GO-C)

The scope of the Corporate Finance Guarantee, the so-called GO-scheme, (Garantie Ondernemingsfinanciering (GO)) is to allow the Dutch government to guarantee half of any new funds which banks make available to Dutch borrowers. Benefits of the GO-scheme are mostly applied to increase the liquidity levels in existing banking relations, mainly by adding new credit lines that are supported by this measure.

Originally this measure aimed at mitigation of the negative effects of the 2009 credit crisis. The scheme has been extended in the context of the corona crisis (GO-C scheme). This extension in scope of the GO-scheme was announced and granted by the Dutch government on 17 March 2020 in order to facilitate large and medium sized businesses affected by the recent corona crisis. The GO-C scheme has been further extended on 7 April 2020. The GO-C scheme was originally meant to end on 31 May 2020 but the Dutch government has further prolonged the GO-C scheme: financing parties may apply for the GO-C guarantee until 30 June 2021.

The main terms and conditions of the GO-C scheme are the following:

• The GO-C scheme applies, in principle, to new loans only. This includes refinancings;
• The GO-C scheme allows for credit availability between EUR 1,5 million and EUR 150 million per enterprise;
• The industries that are excluded for benefitting from the GO-C scheme are:
  • the financial sector in the case that the borrower is in the banking, insurance or investment business or in the case that the borrower has a private equity firm;
  • real estate for speculative scopes; and
  • health care (with certain exceptions).
• The GO-C support applies to euro loans with less than 6 years term;
• Banks must on-pay to the Dutch government part of the interest margin that they charge to the borrower;
• The GO-C scheme also applies to guarantee facilities;
• Applicants must have their registered office in the Netherlands and must have substantial commercial business activities in the Netherlands;
• In the last 12 months, no excessive capital withdrawals must have taken place from the applicant’s company;
• The Go-C support may only be requested for the activities of the own company; and
• The application is submitted by the financier at the Dutch Enterprise Agency (Rijksdienst voor Ondernemend Nederland (RVO.nl)).

The main changes to the existing GO-C scheme are as follows:

• The implementation to take place within one week;
• An increase of the budget of the Dutch government from EUR 400 million to EUR 10 billion; and
• Increase of the state guarantee percentage from 50% to 80% for large enterprises and to 90% for small and medium-size enterprises, provided that such enterprises have been affected by the COVID-19 crisis and for loans up to EUR 150 million per enterprise.

3. The Suretyship Agriculture (BL) has been extended (BL-C)

Under the Suretyship Agriculture (Borgstellingskrediet voor de Landbouw (BL)), the so-called BL-scheme, agricultural companies are facilitated in order to attract financings that may otherwise not be granted. On 17 March 2020, due to the corona crisis, the Dutch government has extended the terms of the BL-scheme. This measure extends the BL-scheme in order to include bridge financing under the scheme (BL-C), effective as from 16 March 2020 and applies until 31 March 2021.

The main terms and conditions of the BL-C bridge financing benefit are the following:

• Applicants must have an agricultural enterprise, for example in agriculture livestock, horticulture, aquaculture or fishing;
• The BL-C-scheme applies to companies located in the Netherlands and whose business activities primarily take place in the Netherlands;
• The applicant’s turnover must mainly be form plant product or livestock (primary production);
• The BL-C scheme allows for a maximum term of up to 16 quarters;
• The BL-C bridge financing allows financing up to the maximum guarantee credit per company of EUR 1,5 million (EUR 2,8 million for GL- or BL plus loans). In addition thereto, the BL-C scheme allows to further extend the guarantee credit with a maximum of EUR 300.000;
• The upfront-fee for temporary loans has been lowered from 3% to 1,5% and for start-ups from 1% to 0,5%. For other loans this fee amounts to 3%;
• The BL-C scheme applies to bullet loans as well as to amortising loans;
• Applicants must submit their application for the BL-C bridge financing prior to 1 April 2021;
• The BL-C financial support may apply retrospectively as form 18 March 2020; and
• A bridge financing under the BL-C scheme is subject to a 70% government cover.

4. Interest rebate for small entrepreneurs on microcredits "Qredits"

Microcredit provider Qredits finances and coaches a large group of small companies and start-ups that find it difficult to obtain financing up to EUR 250.000. 

In the light of Covid-19, on 17 March 2020 the Dutch government has announced the financial support of Qredits in an amount up to EUR 6 million to allow for Qredits to extend credits by up to six months and to allow a decrease in the interest rates to 2% during such extension period. 

The measure benefits both Qredits’ existing borrowers and new borrowers applying for a bridging loan and having a loan provided by another financier.

On 27 October 2020, the Dutch government announced that the financial support under the Qredits-scheme will apply until 1 July 2021.

5. Temporary state subsidy for employers in the Netherlands (Noodfonds Overbrugging Werkgelegenheid: NOW 1.0, NOW 2.0 and NOW 3.0)

This measure financially supports employers with the payment of their
employees' wages. The NOW-subsidy is meant for employers that estimate a turnover loss of at least 20% over a certain reference period and of at least 30% as from January 2021. 

An employer can apply for an advance payment with the Employee Insurance Agency (UWV, Uitvoeringsinstituut Werknemersverzekeringen) of the  compensation for the employees' wages costs. The purpose of the NOW support which is a state subsidy, is to keep the wages of the employees as much as possible unchanged, to enable employers to continue payment of these wages and to avoid redundancies. The NOW measure which was introduced in April 2020, has been prolonged as from 1 October 2020 and is now called the 'NOW 3'. 

The duration of the NOW 3.1 is from 1 October 2020 until 1 January 2021 (to be applied for between 16 October and 13 December 2020); the NOW 3.2 applies from 1 January until 1 April 2021 (to be applied for between 15 February and 14 March 2021 (target dates)) and the NOW 3.3 applies from 1 April until 1 July 2021 (to be applied for between 17 May and 13 June 2021 (target dates)). Under the NOW 3 amended and more austere terms and conditions apply. 
See also https://cms.law/nl/nld/publication/now-3-wijzigingen-per-1-oktober-2020 (Dutch only). 

In the first term of the NOW 3, until 1 January 2021, an employer may receive a maximum of 80% of the wage sum. In case of a loss percentage of 100% the subsidy will thus amount 80% of the wage sum. Under the NOW 3.2 the compensation amounts to a maximum of 70% of the wage sum and under the NOW 3.3 to a maximum of 60% thereof. 

The NOW subsidy will not be lowered if the employer is able to agree with their employees upon a 10% reduction of the wages (under the NOW 3.2 and NOW 3.3 this will respectively be 15% and 20%). The NOW subsidy will also not be lowered in case an employer files for  dismissal on economic grounds (bedrijfseconomisch ontslag) at the Employees Insurance Agency (UWV in Dutch) during the NOW 3 term, provided that the employer ensures to contact the UWV helpdesk that has specifically been established to support employers with educational advice for redundant employees. Under the NOW 3, the employer has to commit to actively inform and encourage employees about undertaking re-education and schooling and to actively offer employees such schooling. 

Under NOW 1 a prohibition was introduced to pay any bonus over 2020 (or dividend 2020 or  buy back of own shares) if  the group that an employer is part of could not present a loss of turnover of 20% or more and if an employer of such a group applied for NOW based on the loss percentage of the individual company. Such a prohibition applied for both the applying entity as its ultimate parent company. The latter has become part of a political debate as to whether a non-Dutch parent company can be ordered to comply with Dutch state subsidy rules. It is important to bear in mind that for all applying entities under the NOW 2 and NOW 3 the prohibition on bonus as described above applies. The prohibition applies to members of the board of directors/management/board of the applying entity which includes appointed board members but also others who have a decision-making role within the company. 

When preparing the application for the definitive NOW subsidy, for employers it is essential to provide for due written recording of the financial data that account for the entitlement to the NOW subsidy. The accountant who has to provide for a declaration for applications exceeding EUR 100.000, expects an overview showing which companies belong to the corporate group structure, on the grounds of which assumptions and figures the application for the NOW subsidy has been made, whether the wages sum has been kept as much as possible the same and how the prohibition on bonus payment has been fulfilled. The latter may for example be accounted for by confirming to the director(s) that, under referral to and application of  the NOW, no bonus or other profit sharing will be paid over 2020, irrespectively of what the parties may have agreed thereon in the employment contract. If application is made for the NOW 3.2 and NOW 3.3, then the prohibition on bonus payment will also apply over 2021.

6. Temporary extra Bbz (Bijstand voor zelfstandigen) support for self-employed professionals (Tozo, Tijdelijke overbruggingsregeling zelfstandig ondernemers, Tozo 2 and Tozo 3)

Self-employed professionals can apply for an extra, temporary benefit for self-employed professionals (Bbz). Under this measure, the requirements for application are less stringent than it would otherwise be. The Tozo-support consists of income support and/or a loan for business capital.

The main requirements for benefitting under the Tozo-scheme are:

• The applicant must live and reside in the Netherlands legitimately;
• The applicant must be an established self-employed professional, aged between 18 and retirement age;
• The business or profession must be practiced in the Netherlands;
• The applicant must meet the legal requirements for being a business owner and be registered in the Dutch Commercial Register (Handelsregister); and
• The business must have been started before 1 January 2020 and a minimum of 1.225 hours per year are worked on the account of that business of professional activity.

The Tozo-scheme has retroactively come into effect as from 1 March 2020. At first, the Tozo-scheme applied until 1 June 2020 (Tozo 1-scheme) but the Dutch government has implemented a further extension of the Tozo-compensation scheme for a period of 4 months from 1 June up to 30 September 2020 (Tozo 2-scheme). On 28 August 2020 the Dutch government announced a further extension of the Tozo financial support measure applying from 1 October 2020 until 1 April 2021 (Tozo 3-scheme). Under the Tozo 3-scheme amended conditions apply. Subsequently, a further amended scheme will apply from 1 April 2021 up to 1 June 2021 (Tozo 4-scheme).

Under the Tozo 2-scheme the following amended terms and conditions will apply:

• Applications under the Tozo 2-scheme for income support will also be based on the applicant’s partner income test; and
• Applications under the Tozo 2-scheme for loan for business capital the applicant must declare that no bankruptcy (faillissement) or suspension of payments (surseance van betaling) has been requested, granted or declared for either the applicant, his enterprise or one of the partners with whom the applicant collaborates.
• For the business capital loan part under the Tozo 2-scheme, a maximum EUR 10.157 applies. This includes any eventual support already received under the Tozo 1-scheme.

Under the Tozo 3-scheme, as from 1 October 2020,  the following amended terms and conditions will apply:

• Applications under the Tozo 3-scheme may be made from 1 October 2020 until 1 April  2021;
• Under the Tozo 3-scheme income support the partner test applies as under the Tozo 2-scheme; and
• As from 1 January 2021, under the Tozo 3-scheme, entrepreneur will be supported in finding new ways to structure their future. This support will be offered through coaching, advice and/or retraining or reorientation.

The Dutch government had originally envisaged to introduce a test on the available financial resources as from 1 October 2020. However, in view of the new economic COVID-19 restrictions that were due in the Netherlands, the government decided to postpone this test until April 2021 and to apply it under the Tozo 4-scheme.

Under the Tozo 4-scheme that will apply from 1 April 2021 until 1 July 2021,  the following additional condition will apply:

• the Tozo 4-scheme will introduce a test on the available financial resources. This test will imply that entrepreneurs having financial resources exceeding a certain amount will not any more qualify for financial support under the Tozo scheme. The threshold amount is presently envisaged is EUR 46.520. It is expected that resources other than financial resources, as for example the own dwelling, office premises, stocks or pension rights will not be taken into account for the calculation of the relevant total amount of financial resources.

7. Monthly compensation for flex-workers (Tijdelijke Overbruggingsregeling voor Flexibele Arbeidskrachten TOFA)

The Dutch Government had also introduced and additional financial support measure for flex-workers This measure applied from 22 June 2020 until 27 July 2020. Under this measure, qualifying flex-workers could receive a monthly gross compensation of EUR 550 over the months March, April and May 2020. As from 27 July 2020, this financial support measure is not any longer applicable.

8. Compensation for fixed costs (TVL, Tegemoetkoming vaste lasten MKB)  and Compensation for entrepreneurs in affected sectors scheme COVID-19 (TOGS, Tegemoetkoming Ondernemers Getroffen Sectoren)

Entrepreneurs in for example the hospitality, travel and event organisation sectors, etc. are among those who are hit hard by the coronavirus crisis. Under the first TOGS-scheme, the Dutch government awarded businesses in the affected sectors a set compensation of €4,000 per company. As from 30 March 2020 also entrepreneurs in the non-food sector such as retailers, could apply for the Compensation under the TOGS-scheme. This extension was announces on 28 March by the Dutch Ministry of Economic Affairs and Climate (EZK). A further extension was announced on 7 April 2020 in order to allow the TOGS-scheme support also to for instance tattoo shops, smaller entrepreneurs in the food sector, taxi’s, dental and physiotherapy practices and suppliers in the food and beverage sector and in the cultural events sector. Applications under the TOGS-scheme could be made starting 27 March 2020 until 26 June 2020. 

On 20 May 2020 the Dutch government has announced that the TOGS-scheme ended on 15 June 2020 (although applications could be made until 26 June 2020) and was replaced by a new support scheme compensating fixed costs (Tegemoetkoming Vaste Lasten (TVL). As the TVL-scheme applies retroactively from 1 June 2020, the application periods for these two measures has briefly overlapped. 

The first TVL-scheme applied from 1 June 2020 until 1 October 2020. However, on 28 August 2020 the Dutch government announced a further extension of the TVL financial support measure that applies from 1 October 2020 until 1 July 2021. 

The main terms and conditions that applied in order to benefit from the TOGS-scheme were: 

• A one-off EUR 4.000 benefit granted per applying company (not per branch);
• The applying company has at most 250 persons working for it and this can be proved by the registration at the Dutch Business Register (KvK Handelsregister);
• The main activity or an ancillary activity of the applying company has been registered under one of the required SBI-codes prior to 15 March 2020;
• The applying company is not a public company;
• The applying company expects a turnover loss of at least €4,000 in the period 16 March through 15 June 2020;
• The applying company expects fixed costs of at least €4,000 in the period 16 March through 15 June 2020, even taking into consideration other government support measures;
• The applying company has not filed for bankruptcy of suspension of payment (surseance van betaling) with the court;
• The applying company has not received more than EUR 200.000 government support during the current and previous 2 fiscal years (de-minimis decree);
• The applying company has a physical establishment in the Netherlands and this physical location is registered with the Dutch Chamber of Commerce (KvK);
• The applying company has been established and registered with the Dutch Chamber of Commerce prior to 15 March 2020; and
• The applying company has at least 1 branch that is not the home address of the owner(s) or that is physically separated from the applicant’s home and that has a separated entry. Hospitality establishments with SBI codes 56.10.1, 56.10.2 and 56.30  and mobile establishments are exempt from this rule.

The first TVL-scheme, the replacing financial support measure, was applicable from 1 June 2020 until 1 October 2020 and replaced the TOGS-scheme. This measure was intended to help small- and medium sized enterprises to pay a part of their fixed costs, exclusive of labour costs as for instance rent, subscriptions and insurance costs.

Entrepreneurs experiencing more than 30% loss of revenue due to the Covid-19 crisis, may benefit from this measure for a minimum amount of EUR 1.000 and a maximum amount of EUR 50.000 free of taxes and over 4 months. Through this measure, the Dutch Government made available financial support up to EUR 1,4 billion.

The second TVL-scheme applies from 1 October 2020 until 1 July 2021. 

In order to qualify for this financial measure, the fixed costs of the applying company must exceed EUR 3.000 and the main activity or an ancillary activity of the applying company must have been registered under one of the required SBI-codes prior to 15 March 2020. 

However, because of the further restrictive measures implemented in Q4 2020, the Dutch government has decided to enable all entrepreneurs, independently of the economic sectors, to benefit under the TVL-scheme. Thus, in Q4 2020 the SBI-code test does not apply.

The revenue loss is calculated by comparing the revenue in the subsidy period with the revenue over the same months in the previous year. This allows to take into account seasonal fluctuations in the type of business and to relate to the actual loss of revenues.

Under the TVL-scheme, entrepreneurs may receive a compensation equal to 50% of the percentage of fixed costs in their business branch multiplied by the revenue loss.

The Dutch government is presently also working op extensions of the TVL-scheme for certain affected economic sectors in particular.

9. Corona Bridging Loan (KKC, Klein Krediet Corona)

This financial support measure benefits small enterprises. The Dutch government guarantees 95% of bridging loans for a maximum amount of EUR 750 million. This scheme is available to small entrepreneurs with relatively limited financing needs (EUR 10.000 to 50.000). Micro-, small and medium size enterprises are eligible for this financial support provided that they have a revenue higher than EUR 50.000 and were financially healthy prior to the Covid-19 crisis. 

A Corona bridging loan may be granted for a term up to 5 years and the interest rate amounts to 4% at the most. Besides, benefitting entrepreneurs shall pay the government a one-off compensation premium of 2%.

Also, qualifying enterprises must have been registered in the Netherlands (Kamer van Koophandel) prior to 1 January 2019. Applications under the KKC-scheme may be made from 29 May 2020 and may retroactively relate to loans provided from 7 May 2020 onwards. The scheme has been approved by the European Commission under the Temporary Framework for State aid measures to support the economy in the current Covid-19. 

Application for the KCC-scheme may be made until 1 July 2021.

10. Postponement of phasing-out of the Growth Facility Scheme (GF, Groeifaciliteit)                       

The intended phasing-out of the Growth Facility Scheme is extended by one year, until 1 July 2021. This postponement ensures that eligible entrepreneurs will be able to raise capital also in during the Covid-19 crisis. Entrepreneurs in need of venture capital may benefit from this supporting measure. Under the Growth Facility Scheme the financing of venture capital is 50% guaranteed by the Dutch government, for instance for losses incurred on subordinated loans and shares in financial holding companies.

11. Temporary bridge funding for startups and scale-ups (COL-faciliteit, Corona Overbruggingslening)                                                         

Until 1 October 2020, bridge financing could also be applied for by startups, scale-ups and other innovative entrepreneurs affected by the Covid-19 crisis. These entrepreneurs usually do not yet have banking relationships. Therefore, the Dutch government had appointed the regional development agencies (Regionale Ontwikkelingsmaatschappijen ROMS) to provide the bridge financings. The Dutch government has made available EUR 200 million. This amount was additional to the initial financial support of EUR 100 million. Besides to startups, scale-ups and innovative businesses, that are mainly financed by external own capital, the COL-scheme was also available to small- and medium sized companies whose growth had mainly been financed by internal own capital. 

Although the COL-scheme was meant to end on 1 October 2020, in view of the prolonged economic circumstances due the COVID-19 crisis, on 27 October 2020 the Dutch government has extended this measure until 1 July 2021.

12. Suspension of repayment under the Proof-of-concept Funding Scheme (Vroege Fase Financiering, VFF) and Innovation Credit Scheme (Innovatiekrediet, IK)             

The Dutch government has granted funding to innovative startups through the Proof-of-concept Funding Scheme and the Innovation Credit Scheme. If the eligible entrepreneurs were affected by the Covid-19 crisis, they could apply for a suspension of repayments and of interests for a period of 6 months, from 1 April to 1 October 2020. Under the Proof-of-concept Funding Scheme, the interest repayment obligations over these 6 months could also be suspended.

The Proof-of-concept Funding Scheme and the Innovation Credit Scheme ended on 1 October 2020. However, the Dutch government is now, in co-operation with Invest-NL, working on a new scale-up facility in order to enable the growth of scale-ups in the Netherlands.

13. Extra financial support for the cultural sector                    

The Dutch government also makes available extra financial support to various economic sectors.

In particular, the Dutch government has made available to the cultural sector EUR 300 million extra financial support in addition to the other available financial measures. This financial support is offered through five different measures.

On 28 August 2020, the Dutch government announced that a further amount of EUR 482 million has been made available for the financial support of the cultural sector.

The scope of these extra measure is the support of employment in the cultural sector and ensuring that cultural organisations can keep investing in the next cultural season. The extra financial support is particularly meant to support cultural organisations that are crucial to the whole sector. If these organisations will remain financially healthy, this will sustain the restart of the business flow in this sector, benefitting also self-employed entrepreneurs. 

Besides this support of the cultural sector, the Dutch government is presently working on the (extension of) financial support of other sectors also. This includes crucial economic sectors like the medical support sector and the economic sectors that have been additionally affected by the new or prolonged restrictive measures. These latter economic sectors include hotels, restaurants and cafes and the sports and events sectors. 

Further measures were announced in a press release on 17 March 2020 and have been implemented and further extended by De Nederlandsche Bank (DNB) after consultation with the Dutch Authority for the Financial Markets (AFM), the Ministry of Finance and representatives of the Dutch Banking Association (NVB), the Federation of the Dutch Pension Funds and the Dutch Association of Insurers:

• https://www.dnb.nl/en/news/news-and-archive/persberichten-2020/dnb387870.jsp
• https://www.dnb.nl/en/consumers/corona/index.jsp

The strong starting position of the Dutch banking sector has allowed DNB to tempo-rarily give banks additional leeway to continue business lending and absorb potential losses. 

In view of current developments, DNB considers this a prudent approach and has de-cided to take, amongst others, the following measures:

• The systemic buffers to be lowered, from its current 3% of global risk-weighted exposures to 2.5% for ING, 2% for Rabobank and 1.5% for ABN Amro; and
• The introduction of a floor for mortgage loan risk weighting to be postponed.    

DNB published the last update of the current Covid-19 measures of the financial sector on 11 August 2020:
https://www.dnb.nl/consumenten/corona/dnb388059.jsp

Combined, these measures have freed up at least EUR 12,8 billion in capital. This ena-bles banks to continue lending to the real economy in the face of rising losses. As the to-tal impact on lending could rise to a maximum of EUR 200 billion, it is paramount that banks use this freed-up capital to support lending, and not to pay dividend or share re-purchases.

These measures remain in force as long as necessary. Once the situation is back to nor-mal, DNB will compensate the systemic buffers reduction by gradually increasing the countercyclical capital buffer to 2% of Dutch risk-weighted exposures. This will bring back the capital requirements to the current level, as DNB believes this is prudent in the longer term. This compensatory arrangement will work out more or less capital-neutral for the three large banks involved, and the same effect is envisaged for the other banks.  

Also, the NVB, the Dutch Banking Association (Nederlandse Vereniging van Banken), reports that since the COVID 19 crisis outbreak in March, the Dutch banks have, in ad-dition to the support package by the government, offered temporary financial relief to 163,000 entrepreneurs. A total of 25.8 billion euros has been made available through the postponement of repayments and the provision of additional credit to companies. The details are displayed in the factsheet published by the Dutch Banking Association (NVB):
https://www.nvb.nl/media/3534/nvb-corona-monitor_30-10-2020.pdf

NVB published the last update of the Corona-monitor for the financial sector on 30 Oc-tober 2020.

Furthermore, following the extensive financial measure package of the Dutch govern-ment, the largest Dutch banks had jointly introduced measures which offered their SME clients extra breathing space. This measure applied until 31 July 2020. Companies that were financially healthy prior to corona crisis were offered a six-months postponement for the repayment of their loans. This was a joint decision by ABN Amro, BNG Bank, Deutsche Bank, ING, Rabobank, Volksbank and Triodos Bank. This joint approach tak-en by the banks was provided to corporate clients in all sectors which had a credit of maximum EUR 2,5 million. Banks also closely monitored developments for the group with higher loans. Although this moratorium arrangement ended on 31 July 2020, banks now provide individually tailored support to their clients.

In addition to the above support measures, lenders are generally expected to act with le-niency towards borrowers.

Pension funds and insurers are also hit by this crisis and DNB is implementing measures to limit the impact on these sectors as well – for example by postponing planned regula-tory adjustments.

Regarding the commercial retail and real estate industry, on 10 April 2020 an agreement was reached between the major retail commercial real estate lessors and the commercial retailers that are being affected by the COVID-19 crisis. This agreement had been strongly encouraged by the Dutch Ministry of Economic Affairs as decrease in rental prices and suspension of payment of lease obligations seemed unavoidable under the COVID-19 circumstances. The agreement was further extended in June 2020 in order to encourage a 50% remittance of lease debts over the months April and May 2020 and a 50% suspension of payment for leases over the month June until 2021.

Major parties like IVBN, INretail, Vastgoed Belang, Detailhandel Nederland, the Ministry of Dutch Economic Affairs, the Dutch Association of Banks (Nederlandse Vereniging van Banken) and the Dutch real estate management foundation VGO (VGO-Keur) took part to the negotiations. 

The agreement provides for a 3-months moratorium on lease payment obligations for retailers that have seen a revenue decrease of at least 25% from 1 April 2020. The extent of the allowed moratorium for lessees qualifying for this support measure, is defined on a case-by-case basis and depends on various factors such as the financial capacity of the lessee and the lessees’ company’s corporate structure that may possibly comprise foreign ownership as would be the case for international retailers. 

Under the agreement, the parties seek for tailormade moratorium arrangements. The parties to the agreement may commit themselves to refrain from evictions for the time being. On the other hand, the retailers supported by the agreement may commit themselves to use their best efforts in order to reopen their retail shop(s) and so to generate as much revenue as possible again as soon as the Dutch governmental COVID-19 guidelines will allow so. Also, retailers may engage to refrain from invoking eventual individual payment schemes and commit themselves to the payment of the leases as far as financially possible and in consultation with the lessor.

The terms and conditions allowing for moratorium support under this agreement emphasize on producing evidence of the due revenue decrease, supported by the relevant documentation. The agreement expects from the parties a constructive approach in discussing individual support arrangements. 

The agreement in the commercial retail sector is binding on the participating parties. However, following this agreement, the Dutch government expects also other lessors and lessees to act with leniency and to reach financial solutions in consultation with each other.

In addition to the measures listed above, on 4 June 2020, the Dutch government launched an online consultation aiming at the introduction of new legislation on temporary payment suspension (Tijdelijke Betalingsuitstelwet 2020). This draft bill offers debtors the possibility to submit to the court a request for postponement of bankruptcy or for suspension of creditor's claims if the debtor is able to show that prior to the Coronavirus measures being implemented (i.e. 16 March 2020) the debtor was able to pay its debts and since the measures its revenues have declined by 20% or more. Other conditions in order to qualify for suspension of payment under the draft bill are the perspective of debt repayment on expiration of the suspension term as allowed by the court and that the suspension of payment is not unreasonably detrimental  to the creditor(s) requesting the bankruptcy. Debtors qualifying as banks, insurers or investment firms under article 1:1 of the Dutch Financial Supervision Act (Wet financieel toezicht) are excluded from the scope of this new draft bill. 

This new legislation has been adopted on 24 November 2020 and is expected to enter into force on very short term. The provisions of this new act that apply to temporary payment suspension will apply until 1 February 2021 but may be extended by royal decree for a further two-months term.

Please see above. 

DNB, the AFM and the Ministry of Finance are closely monitoring developments and continue the dialogue with the sector.

Where not yet fully approved by the EU Commission, it is expected that approval proceedings will be completed on very short term.

Please see above.

The prerequisites to qualify for the measures are as follows:

• For the SME guarantee scheme (Borgstelling MKB Kredieten, BMKB-C):

This scheme applies to small and medium enterprises in the Netherlands: less than 250 employees (FTE), less than EUR 50 million revenue, less than EUR 43 million balance sheet total and that have been incorporated for less than 3 years. 

• For the Business loan guarantee scheme (GO-C):

This scheme applies under the following conditions:

• Euro loans with a term no longer than 6 years; 
• The companies must have their registered office and substantial busi-ness activities in the Netherlands;
• The GO-C support generally only applies to new loans (including refi-nancings);
• In the last 12 months, no excessive capital withdrawals must have taken place from the applicant’s company; 
• Certain industries are excluded: the financial sector where the borrower is in the banking, insurance or investment business or has a private equi-ty firm; real estate for speculative purposes and health care (with certain exceptions);
• GO-C support is also available for guarantee facilities; and
• In order to benefit from the GO-C support, banks must on-pay to the Dutch State part of the interest margin which the banks charge to the borrower. 

• For the suretyship agriculture (Borgstellingskrediet voor de Landbouw (BL-C)):

The BL-C scheme applies under the following conditions:

• Applicants must have an agricultural enterprise, for example in agricul-ture livestock, horticulture, aquaculture or fishing;
• Up to a maximum of EUR 2.8 million of bridge financing;
• In addition thereto, the BL-C scheme allows to further extend the guar-antee credit with a maximum of EUR 300.000;
• For a term of up to 16 quarters;
• In the form of a bullet or amortising loan;
• Upfront fee for temporary loans lowered from 3% to 1,5% and for start-ups from 1% to 0,5%. For other loans this fee amounts to 3%;
• Subject to a 70% government cover; and
• Applications to be submitted before 1 April 2021.

• For the Interest rebate for small entrepreneurs on microcredits "Qredits":

This interest rebate applies small companies and start-ups that find it difficult to obtain financing up to EUR 250.000.

Entrepreneurs who have a loan from microcredit provider Qredits do not have to repay their loan for a period of 6 months. During this period, the interest will be reduced to 2%. The measure benefits both Qredits’ existing borrowers and new borrowers applying for a bridging loan and having a loan provided by another financier.

• For the Temporary state subsidy for employers in the Netherlands (Noodfonds Overbrugging Werkgelegenheid; NOW 1.0, NOW 2.0 and NOW 3.0):

Please see also above. 

An employer can apply for an advance payment with the Employee Insurance Agency (UWV, Uitvoeringsinstituut Werknemersverzekeringen) of the  compensation for the employees' wages costs. The purpose of the NOW support which is a state subsidy, is to keep the wages of the employees as much as possible unchanged, to enable employers to continue payment of these wages and to avoid redundancies. The NOW measure which was introduced in April 2020, has been prolonged as from 1 October 2020 and is now called the 'NOW 3'. 

The duration of the NOW 3.1 is from 1 October 2020 until 1 January 2021 (to be applied for between 16 October and 13 December 2020); the NOW 3.2 applies from 1 January until 1 April 2021 (to be applied for between 15 February and 14 March 2021 (target dates)) and the NOW 3.3 applies from 1 April until 1 July 2021 (to be applied for between 17 May and 13 June 2021 (target dates)). Under the NOW 3 amended and more austere terms and conditions apply. 
See also https://cms.law/nl/nld/publication/now-3-wijzigingen-per-1-oktober-2020 (Dutch only). 

In the first term of the NOW 3, until 1 January 2021, an employer may receive a maximum of 80% of the wage sum. In case of a loss percentage of 100% the subsidy will thus amount 80% of the wage sum. Under the NOW 3.2 the compensation amounts to a maximum of 70% of the wage sum and under the NOW 3.3 to a maximum of 60% thereof. 

The NOW subsidy will not be lowered if the employer is able to agree with their employees upon a 10% reduction of the wages (under the NOW 3.2 and NOW 3.3 this will respectively be 15% and 20%). The NOW subsidy will also not be lowered in case an employer files for  dismissal on economic grounds (bedrijfseconomisch ontslag) at the Employees Insurance Agency (UWV in Dutch) during the NOW 3 term, provided that the employer ensures to contact the UWV helpdesk that has specifically been established to support employers with educational advice for redundant employees. Under the NOW 3, the employer has to commit to actively inform and encourage employees about undertaking re-education and schooling and to actively offer employees such schooling. 

Under NOW 1 a prohibition was introduced to pay any bonus over 2020 (or dividend 2020 or  buy back of own shares) if  the group that an employer is part of could not present a loss of turnover of 20% or more and if an employer of such a group applied for NOW based on the loss percentage of the individual company. Such a prohibition applied for both the applying entity as its ultimate parent company. The latter has become part of a political debate as to whether a non-Dutch parent company can be ordered to comply with Dutch state subsidy rules. It is important to bear in mind that for all applying entities under the NOW 2 and NOW 3 the prohibition on bonus as described above applies. The prohibition applies to members of the board of directors/management/board of the applying entity which includes appointed board members but also others who have a decision-making role within the company. 

When preparing the application for the definitive NOW subsidy, for employers it is essential to provide for due written recording of the financial data that account for the entitlement to the NOW subsidy. The accountant who has to provide for a declaration for applications exceeding EUR 100.000, expects an overview showing which companies belong to the corporate group structure, on the grounds of which assumptions and figures the application for the NOW subsidy has been made, whether the wages sum has been kept as much as possible the same and how the prohibition on bonus payment has been fulfilled. The latter may for example be accounted for by confirming to the director(s) that, under referral to and application of  the NOW, no bonus or other profit sharing will be paid over 2020, irrespectively of what the parties may have agreed thereon in the employment contract. If application is made for the NOW 3.2 and NOW 3.3, then the prohibition on bonus payment will also apply over 2021.

• For the Temporary extra Bbz (Bijstand voor zelfstandigen) support for self-employed professionals (Tozo, Tijdelijke overbruggingsregeling zelfstandig ondernemers, Tozo-2 and Tozo-3):

The TOZO-scheme applies to self-employed professionals. Self-employed professionals can benefit from an extra, temporary benefit. The mains requirements for applying are as follows:

• The Tozo-scheme has retroactively come into effect as from 1 March 2020. At first, the Tozo-scheme applied until 1 June 2020 (Tozo 1-scheme) but the Dutch government has implemented a further extension of the Tozo-compensation scheme for a period of 4 months from 1 June up to 30 September 2020 (Tozo 2-scheme). On 28 August 2020 the Dutch government announced a further extension of the Tozo financial support measure applying from 1 October 2020 until 1 April 2021 (Tozo 3-scheme). Under the Tozo 3-scheme amended conditions apply. Subsequently, a further amended scheme will apply from 1 April 2021 up to 1 June 2021 (Tozo 4-scheme).
• The applicant must live and reside in the Netherlands legitimately;
• The applicant must be an established self-employed professional, aged between 18 and retirement age;
• The applicant must meet the legal requirements for being a business owner and be registered in the Dutch Commercial Register (Handelsregister); 
• The business or profession must be practiced in the Netherlands;
• The business must have been started before 1 January 2020 and a minimum of 1.225 hours per year are worked on the account of that business of professional activity.
• In applications under the Tozo scheme for loan for business capital the applicant must declare that no bankruptcy (faillissement) or suspension of payments (surseance van betaling) has been requested, granted or declared for either the applicant, his enterprise or one of the partners with whom the applicant collaborates;
• Applications under the Tozo-2 and Tozo-3 schemes for income support are also  based on the applicant’s partner income test;
• the Tozo 4-scheme will introduce a test on the available financial resources; and
• As from 1 January 2021, under the Tozo 3-scheme, entrepreneur will be supported in finding new ways to structure their future. This support will be offered through coaching, advice and/or retraining or reorientation.

• For the Compensation for fixed costs (TVL, Tegemoetkoming vaste lasten MKB)  and the compensation for entrepreneurs in affected sectors scheme COVID-19 (TOGS, Tegemoetkoming Ondernemers Getroffen Sectoren):

Under the initial measure, the Dutch government has awarded businesses in the sectors affected by the COVID-19 crisis a set compensation of €4,000. 

The main prerequisites to apply for this benefit were:

• The applying company is not a public company;
• The applying company has a physical establishment in the Netherlands and this physical location is registered with the Dutch Chamber of Commerce (KvK);
• The applying company has at least 1 branch that is not the home address of the owner(s) or that is physically separated from the applicant’s home and that has a separated entry. Hospitality establishments with SBI codes 56.10.1, 56.10.2 and 56.30  and mobile establishments are exempt from this rule;
• The applying company expects a turnover loss of at least €4,000 in the period 16 March through 15 June 2020;
• The applying company expects fixed costs of at least €4,000 in the period 16 March through 15 June 2020, even taking into consideration other government support measures; 
• The applying company has not filed for bankruptcy of suspension of payment with the court; and
• The applying company has not received more than EUR 200.000 government support during the current and previous 2 fiscal years (de-minimis decree).

The first TVL financial support measure, in the line of the TOGS-scheme, was applicable from 1 June 2020 until 1 October 2020 and replaced the TOGS-scheme:

• Entrepreneurs experiencing more than 30% loss of revenue due to the Covid-19 crisis, could benefit from this measure for a maximum amount of EUR 50.000 free of taxes and over 4 months; and
• The main activity or an ancillary activity of the applying company must have been registered under one of the required SBI-codes prior to 15 March 2020.

The second TVL-scheme applies from 1 October 2020 until 1 July 2021:

• In order to qualify for this financial measure, the fixed costs of the applying company must exceed EUR 3.000 and the main activity or an ancillary activity of the applying company must have been registered under one of the required SBI-codes prior to 15 March 2020; 
• However, because of the further restrictive measures implemented in Q4 2020, on 27 October 2020 the Dutch government has decided to enable all entrepreneurs, independently of the economic sectors, to benefit under the TVL-scheme. Thus, in Q4 2020 the SBI-code test does not apply;
• The revenue loss is calculated by comparing the revenue in the subsidy period with the revenue over the same months in the previous year. This allows to take into account seasonal fluctuations in the type of business and to relate to the actual loss of revenues; and
• Under the TVL-scheme, entrepreneurs may receive a compensation equal to 50% of the percentage of fixed costs in their business branch multiplied by the revenue loss.

• For the Corona Bridging Loan (KKC, Klein Krediet Corona):

This financial support measure benefits small enterprises. The Dutch government guarantees 95% of bridging loans for a maximum amount of EUR 750 million. This scheme is available to small entrepreneurs with relatively limited financing needs (EUR 10.000 to 50.000). 

Micro-, small and medium size enterprises are eligible for this financial support provided that they have a revenue higher than EUR 50.000 and were financially healthy prior to the Covid-19 crisis. 

Application for the KCC-scheme may be made until 1 July 2021.

• For the Postponement of phasing-out of the Growth Facility Scheme (GF, Groeifaciliteit):

This measure applies to the eligible entrepreneurs under the present Growth Facility Scheme and will mainly facilitate entrepreneurs in need of venture capital.

The intended phasing-out of the Growth Facility Scheme is extended by one year, until 1 July 2021.

• For the Bridge Funding for startups and scale-ups (COL-faciliteit, Corona-Overbruggingslening):

This measure facilitated starting enterprises being startups and/or scale ups and may also apply to other innovative entrepreneurs. The COL-scheme was also available to small- and medium sized companies whose growth has mainly been financed by internal own capital.

Although the COL-scheme was meant to end on 1 October 2020, in view of the prolonged economic circumstances due the COVID-19 crisis, on 27 October 2020 the Dutch government has extended this measure until 1 July 2021.

• For the Suspension of repayment under the Proof-of-concept Funding Scheme (Vroege Fase Financiering, VFF) and the Innovation Credit Scheme (Innovatiekrediet, IK):

This measure applied to eligible entrepreneurs under the VFF or IK schemes to which funding under one of these schemes has been granted.

The suspension of repayments granted under this scheme applied for a period of 6 months, from 1 April to 1 October 2020.

The Proof-of-concept Funding Scheme and the Innovation Credit Scheme ended on 1 October 2020. However, the Dutch government is now, in co-operation with Invest-NL, working on a new scale-up facility in order to enable the growth of scale-ups in the Netherlands.

• For the extra financial support for the cultural sector:

This measure applies to the cultural organisations that are crucial to the cultural sector as a whole. This financial support of EUR 300 million is offered through five different measures.

On 28 August 2020, the Dutch government announced that a further amount of EUR 482 million was made available for the financial support of the cultural sector.

Besides this support of the cultural sector, the Dutch government is presently working on the (extension of) financial support of other sectors also. This includes crucial economic sectors like the medical support sector and the economic sectors that have been additionally affected by the new or prolonged restrictive measures. These latter economic sectors include hotels, restaurants and cafes and the sports and events sectors.

Please see above. Each stabilization measure indicates the terms and conditions under which application can be submitted, whereby the generally applicable principle is that only companies, branches and/or entities incorporated under Dutch law and registered with the Dutch trade register (Handelsregister) qualify for successful application for a stabilization measure.

Please see above. Each stabilization measure indicates the terms and conditions under which application can be submitted, whereby the generally applicable principle is that only companies, branches and/or entities incorporated under Dutch law and registered with the Dutch trade register (Handelsregister) qualify for successful application for a stabilization measure.

Not at this stage. However, restrictions on use of cash / other restrictions (on-shore investments only, group implications, dividends etc.) may not be excluded with certainty for the (foreseeable) future. 

At this date, Dutch insolvency law general rules (including deadlines question) has not been amended yet. However, on 26 March 2020 the Dutch courts have implemented a temporary regulation for Insolvency cases due to the exceptional circumstances under the Corona-crisis (Tijdelijk afwijkende regeling Insolventiezaken rechtbanken vanwege de bijzondere omstandigheden door de Corona-crisis (toepassing uitzonderingsbepaling artikel 4.3 Landelijk procesreglement verzoekschriftprocedures insolventiezaken rechtbanken). This temporary regulation has been further amended on 29 April 2020 and on 26 June 2020. Under these new temporary court rules, applications for bankruptcy and suspension of payment will be handled by a determined priority order, mostly in writing and, where necessary, via (video) calls.  

Companies that, eventually despite application of one or more of the support measures as indicated above,  are temporarily unable to pay their debts, can ask the court to grant deferral (suspension) of payment (surseance van betaling). Suspension of payment enables to avoid bankruptcy. However, it could be that debt restructuring is more appropriate to the relevant situation. 
Also, the Act on the confirmation of private plans (Wet homologatie onderhands akkoord or WHOA) was submitted to the Dutch parliament last year, was adopted on 6 October 2020 and will enter into force on 1 January 2021. On 24 November 2020 the Dutch courts have already published the first version of the WHOA proceedings regulation (Landelijk procesreglement WHOA zaken rechtbanken).

As from 1 January 2021, this Act will introduce a framework under which tailor-made (financial) restructuring plans can be implemented outside formal insolvency proceedings. The WHOA provides for a fast and efficient restructuring procedure outside of formal insolvency, which in principle can be completed within a matter of months. The restructuring plan may bind (a selection of) secured, unsecured and preferential creditors as well as shareholders, while at the same time adequately protecting the interests of any dissenting party.

The WHOA enables both the debtor and other important stakeholders the opportunity to – at an early stage and outside the public domain – avoid an uncontrolled insolven-cy and preserve the debtor’s value. In addition, the WHOA provides for a high level of deal certainty as a result of, amongst others, the various supportive measures. It also offers flexibility on the contents of the restructuring plan and has the option to be (au-tomatically) recognized throughout the EU.

On 27 October 2020, the Dutch Government has indicated that financial restructuring plans outside formal insolvency proceedings as envisaged by the WHOA may already be prepared prior to 1 January 2021, the date of entry into force of this new legislation. The restructuring plan may then be submitted for confirmation by the court immediately after 1 January 2021.

Please see above. At this date, Dutch insolvency law general rules (including deadlines question) has not been amended yet.

However, the Act on the confirmation of private plans (Wet homologatie onderhands akkoord or WHOA) will offer a world-class platform for international debt restructurings with the Dutch courts assuming jurisdiction in a wide variety of cases.

Please see above. At this date, Dutch insolvency law general rules (including deadlines question) have not been amended yet. Thus, no particular Corona-related rules on cross-border insolvencies and restructurings are, so far, in place in the Netherlands. However, the Act on the confirmation of private plans (Wet homologatie onderhands akkoord or WHOA) will offer a world-class platform for international debt restructurings with the Dutch courts assuming jurisdiction in a wide variety of cases.

Please see above. At this date, Dutch insolvency law general rules have not been amended yet. However, companies may apply for the Corona-related measures as indicated above. The Act on the confirmation of private plans (Wet homologatie onderhands akkoord or WHOA) will offer companies alternative measures to prevent a wind down.