State aid in Belgium during coronavirus crisis

Introduction

Belgium has adopted various measures, both at federal and regional level, to provide financial flexibility to allow companies to overcome their temporary financial difficulties.  

EU State aid law context

National State aid schemes (programs) introduced by EU Member States and individual aid granted by national instances must comply with the applicable EU State aid law. Member States may notify new schemes or grant aid in individual cases. These may be based, for example, on the European Commission's Temporary Framework, on the provisions of the Treaty (Art. 107(2) b) TFEU) on aid to rectify damages caused by exceptional occurrences or on the guidelines on rescue and restructuring aid for companies in difficulty. Further details can be found in the EU chapter.

National Public Support

Federal government measures introducing a payment plan for different public debts (taxes, social security, VAT, etc.)

Who is eligible for the aid?

Undertakings and natural persons registered with the Crossroads Bank for Enterprises (“Banque Carrefour des entreprises”) regardless of their sector of activity that: 

  • are experiencing financial difficulties; and 
  • can demonstrate these result from the outbreak of the coronavirus.Indeed, those support measures may not be granted to companies which, independently of the coronavirus crisis, have structural payment problems.

What does the aid consist of?   

Public support consists of:

  • the establishment of a payment plan; 
  • an exemption from late payment interest; or 
  • a remission of fines for non-payment of public debts, such as social security contributions, VAT, professional withholding tax as well as personal income taxes and corporate taxes.

The Government has set up a guarantee scheme for companies and self-employed with a budget of 50 billion EUR to cover new credits for up to one year. This scheme has been adopted by a law of 27 March 2020 and a royal decree 1 Royal Decree of 14th April 2020, in Flemish and French : http://www.ejustice.just.fgov.be/mopdf/2020/04/15_2.pdf#Page3  of 14 April 2020 and applies to credits granted between 1 April 2020 and 30 September 2020.

To be eligible for this guarantee , the companies must prove that they were not in difficulty on 31 December 2019 and that they are viable (not in arrears as of 1 February 2020, or by less than 30 days as of 29 February 2020 and are not currently subject to a credit restructuring).

In order to ensure that the guarantee is only used when a sufficient amount of losses is reached, the maximum amount of the state guarantee is:

  • 0% for the first 3% of losses;
  • 50% for the next 2% of losses;
  • 80% for the remaining losses.   

The scheme provides that the premium charged by the lender to the borrower, will be equivalent to: 

  • 0.25% (for SMEs) and 
  • 0.5% (for large firms)    

Additionally, the scheme provides for a moratorium on interest payments and loan repayments for existing loans until the end of September 2020.

Where to apply for the aid?

Applications, valid for all measures, must be made via a form published on the website of the federal public finance service 2 In French : https://finances.belgium.be/fr/entreprises/mesures-de-soutien-dans-le-cadre-du-coronavirus-covid-19 In Flemish : https://financien.belgium.be/nl/ondernemingen/steunmaatregelen-betreffende-het-coronavirus-covid-19 , by e-mail or by post. There is a single point of contact for all measures: the Regional Collection Centre determined by the postal code of the address or head office.

Applications must be made before 30 June 2020.

The guarantee scheme applies to credits granted between 1 April 2020 and 30 September 2020.

Is a notification to the EU Commission necessary?    

No for the rescheduling of debts, interests and fines. These public supports are general measures that do not constitute a State aid and therefore must not be formally authorised by the EU Commission.

Yes regarding the guarantee scheme. The aid scheme has been notified and was approved on 11 April 2020 by the European Commission under the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak 3 Press release of the European Commission : https://ec.europa.eu/commission/presscorner/detail/fr/ip_20_648. .

Further remarks

None.


Regional measures

Measures of the Brussels Region for companies

Who is eligible for the aid?

Shops, stores and establishments that:

  • are closed due to state containment measures; and
  • have less than 50 full-time workers; and
  • are active in one of the sectors listed in the annex of the Order of the Government of the Brussels-Capital Region relating to aid for the compensation of undertakings af-fected by the emergency measures to limit the spread of the COVID-19, available on the website of the Brussels region.

What does the aid consist of?   

  • A single premium of EUR 4.000 or public guarantees on bank loans, for a total of 20 million EUR;
  • The suspension of the payment of the City Tax for the first semester of 2020;
  • The possibility to obtain a loan from finance&invest.brussels with subsidised interest rates for the Horeca sector 4 More information via https://www.flexmail.eu/f-d174fcc17cf57f24 ;
  • Increased assistance to companies in difficulty via hub.brussels.

The Brussels region has set up an aid scheme to support coronavirus related research and development projects, with a budget of  4 million EUR. The beneficiaries of the subsidies are undertakings from all sectors which have at least site in the Brussels Region and intend to carryout COVID-19 research and development projects.

The eligible projects must have started as of 1 February 2020, projects started before that date are eligible for the subsidy only if the aid is needed to accelerate their implementation, or to widen their scope. The maximum aid intensity is 80 % for industrial research and for experimental development.

This aid scheme can be granted until 31 December 2020 but applications must be submitted before 1 August 2020.

Where to apply for the aid?

The request for the premium must be made online by 18 May 2020, to “Bruxelles Economie et Emploi (BEE)”.

This request must be accompanied by two documents:

  • the last VAT declaration; and
  • a bank certificate relating to the company's account. This certificate must mention the name of the bank, the name of the company, its contact details and the account num-ber of the company.

The request for the guarantees on bank loans must be submitted via the Brussels Guarantee Fund 5 In French : http://www.fondsbruxelloisdegarantie.be/ In Flemish : http://www.fondsbruxelloisdegarantie.be/nl/ .

Is a notification to the EU Commission necessary?    

The legal basis for the measures of limited amount (premiums, suspension of tax, assistance, etc.) is unclear however they could be qualified as de minimis aid, and not subject to notification to the EU Commission.

The loans and guarantees will have to be notified on the basis of the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak if the undertakings concerned are in difficulty because of the crisis.

The grant scheme for coronavirus related research and development projects was approved by the European Commission on 27 April 2020 on the basis of the Temporary Framework 6 Press release of the European Commission : https://ec.europa.eu/commission/presscorner/detail/en/ip_20_735. .

Further remarks

None.


Measures of the Walloon Region for companies  

Who is eligible for the aid?

Companies active in the hotel/travel/tourism sectors, retail, bus sector etc. that have their head office or operating headquarters in Wallonia and that:

  • are impacted by decreased revenues due to the reduction in the financial share of the beneficiaries of their benefits;
  • have an employment workforce of less than 50 workers; and
  • have: either total annual turnover of no more than EUR 10 million; or total annual budget of no more than EUR 10 million;
  • have been active since before 12th March 2020;
  • have paid social security contributions in 2018.

Hospitals and retirement homes for specific public support.

SME and large companies will be eligible for public guarantees.

All the undertakings are eligible for the measure concerning the freezing of loans.

What does the aid consist of?    

A premium of EUR 5.000 per company, for a period of 3 months for those companies that have had to close because of the state measures against the COVID-19 and EUR 2.500 for those that have had to adapt their days of business without closing completely.

Public loans by SOGEPA up to EUR 200.000.

Public guarantees, with a budget of 530 million EUR, granted until the end of 2020 by :

  • Geligar (large companies) on existing investment loans as well as existing and new working capital loans;
  • SOWALFIN (SME) on existing investment loans as well as existing and new working capital loans;
  • SOGEPA on investment and revolving capital loans and confirmed credit lines financing the operation of beneficiaries that are in turnaround situations, to SMEs and large enterprises;
  • WALLONIE SANTE on investment and revolving capital loans and confirmed credit lines financing the operations of beneficiaries, to large enterprises or SME’s active in in the healthcare sectors.

The maximum amount of the qualifying loans may not exceed : 

  • double the annual wage bill of the beneficiary for 2019 or for the last year available (for undertakings created on or after 1 January 2019, the maximum loan must not exceed the estimated annual wage bill for the first two years); or
  • 25% of the beneficiary’s total turnover in 2019; or
  • The amount of the loan may be increased to cover the liquidity needs from the moment of granting for the coming 18 months for SMEs and for the coming 12 months for large enterprises.

These guarantees may not exceed six years and are limited to a maximum coverage of 90% of the remaining outstanding underlying loan amount and to a maximum of 7,5 million EUR for SME’s and 10 million EUR for large enterprises.. 

The GELIGAR guarantee can be cumulated with the State guarantee mentioned above.

The Walloon Region has set up an aid scheme to support coronavirus related research and development projects, with a budget of 25 million EUR. The aid scheme may be granted until 31 December 2020 and is accessible to undertakings active in the Walloon Region from all sectors which are able to lead COVID-19 research and development projects and which were not in difficulty on 31 December 2019.

The eligible projects must have started as of 1 February 2020, projects started before that date are eligible for the subsidy only if the aid is necessary to accelerate or widen the scope of the project. 
The public support will be granted for industrial research and experimental development projects and will take the form of direct grants and repayable advances. The maximum cover will be of 80 % for SME’s and 60% for large undertakings. For experimental development projects, the aid will be granted solely in the form of direct grants if the project does not exceed 2 million EUR.

Where to apply for the aid?

The Walloon platform for submitting a request for the premium have been put online by the SPW Economy.  

Is a notification to the EU Commission necessary?    

The legal basis for the measures of limited amount (premiums, loans, etc.) is unclear however they could be qualified as de minimis aid, and not subject to notification to the EU Commission.

The guarantee schemes was approved by the European Commission on 30 April 2020 on the basis of the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak 7 Press release of the European Commission : https://ec.europa.eu/commission/presscorner/detail/en/ip_20_792. .

The aid scheme for coronavirus related research and development projects was approved by the European Commission on 12 May 2020 on the basis of the Temporary Framework. 

Further remarks

None.


Measures of the Flemish Region for companies  

Who is eligible for the aid?

Entrepreneurs and self-employed persons that have a physical location in Flanders and that are obliged to close their business because of the corona measures, restaurants and chip shops that have switched to take out services.
Undertakings in need of a bridging loan as a result of the corona crisis that cannot conclude a financing agreement due to insufficient guarantees.

What does the aid consist of?    

A premium of EUR 4.000 and if the obligatory closure of the business continues after 5th April 2020, a fee of EUR 160 per day. Restaurants and chip shops that switched to take out services can receive the premium of EUR 4.000 and a daily fee of EUR 160 after 4th April 2020.

These undertakings may ask for a guarantee up to 75% of their credit commitments, up to a maximum amount of  EUR 1.5 million. This arrangement also applies to certain leasing contracts. The crisis guarantee can be used for a maximum of 12 months.

The Flemish region has set up a subordinated loan scheme, with a budget of 250 million EUR, to support start-ups, scale-ups and small/medium-sized enterprises. The scheme applies to enterprises active in the Flemish region and which have financing needs due to the coronavirus outbreak. 

The loans will be provided until the end of December 2020, with a maximum duration of 3 years and cannot exceed an amount of 800.000 EUR.

Where to apply for the aid?

The request can be made online on the website of the Flemish region until 19 May 2020.

Is a notification to the EU Commission necessary?    

The legal basis for the measures of limited amount (premiums, loans, etc.) is unclear however they could be qualified as de minimis aid, and not subject to notification to the EU Commission.

The guarantees will have to be notified on the basis of the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak 8 Press release of the European Commission : https://ec.europa.eu/commission/presscorner/detail/en/ip_20_636. if the undertakings concerned are in difficulty because of the crisis.

The subordinated loan scheme was approved by the European Commission on 5 May 2020  on the basis of the Temporary Framework9.

Further remarks

None.

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Annabelle Lepièce
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