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Finland

Paul Hastings in collaboration withRoschier
Liquidity Measures
Relief

Liquidity Measures

The Finnish Government has unveiled an €15b financial aid package

Government Measure

In order to support the economy of Finland, the Finnish Government has unveiled financial measures the overall scale of which will amount to €15b. The financial aid package includes, among other things (some of which have not yet been implemented):

  • the supplementary increase of the Government's budget including;
    • allocating €700m to Business Finland for additional business support measures (please see further information regarding these measures below);
    • increasing centers for economic development, transport and the environment's (ELY-keskukset) granting mandate for business development projects by €300m;
    • strengthening business advisory services by €500k to the Talousapu financial assistance service;
    • supporting Finnair with an €600m state aid guarantee.
  • the State Pension Fund buying bonds of Finnish enterprises in the amount of up to €1b;
 
Eligibility

As the financial aid package is very extensive, the different measures included in the package are available for different types of companies. For some of the measures, Finnish based SMEs are eligible and for other measures public sector employers are eligible. Hence, we are not able to provide a general answer to this question.

 
Supervising Authority

The Finnish Government.

 
Availability

No set time period other than during 2020.

Grants from municipalities

Government Measure

Sole entrepreneurs will be able to apply for funding of €2k from municipalities to cover business expenses.

 The funding can be applied for by a full-time entrepreneur conducting an economic activity alone, regardless of the company form and the way in which the business is financed.

 
Eligibility

The criteria for the funding are a substantially weakened financial situation and decline in turnover due to the COVID-19 pandemic after year-end 2019. Companies with financial difficulties already before the COVID-19 pandemic and companies with tax debts are ineligible for funding.

 
Supervising Authority

Finnish municipalities.

 
Availability

Not yet in force.

Proposal to increase Finnvera Oyj's capacity to guarantee loans

Government Measure

In order to alleviate the cash crisis of SMEs, particularly micro enterprises, and to prevent bankruptcies, the Finnish Government has prepared a proposal to extend the powers of the Export Credit Agency Finnvera from the current maximum of €4.2b to €12b with the primary operations model being a state guarantee on loans granted by the banks.

 
Eligibility

The applicant company must have a minimum Rating Alfa classification of A (Suomen Asiakastieto Rating Alfa classification).

 
Supervising Authority

The Finnish Government

 
Availability

No set time period other than during 2020.

Companies must first contact their own bank, which can then grant the financing guaranteed by Finnvera.

FIN-FSA Board lowers credit institutions’ capital requirements

Government Measure

The Board of the Financial Supervisory Authority (“FIN-FSA”) has decided to lower Finnish credit institutions’ capital requirements. The decision will increase the lending capacity of the Finnish banks by around €52b.

 
Eligibility

Credit institutions

 
Supervising Authority

The Financial Supervisory Authority.

 
Availability

No set time period other than during 2020.

Business Finland allocates €700m for additional business support measures

Government Measure

Business Finland has launched two new financial services (the minimis funding) aimed at mitigating the economic impact of the COVID-19 pandemic.

The financing services are intended to cover nearly all industries with operations that currently are suffering due to market and production chain disruptions caused by the COVID-19 pandemic. The financing is intended for companies to explore and tap into new business opportunities in emergency conditions.

It is also possible for the companies to apply for changes (including in project times, implementation, and project plan contents) in relation to the already ongoing projects to which Business Finland has provided funding.

 
Eligibility

The financial services are aimed at SMEs that employ 6–250 people and for midcaps that may employ more than 250 people but have an annual turnover of less than €300m.

A company may receive the funding only once, with the exception of special cases.

Funding is aimed at companies that had prerequisites for profitable business operations before the COVID-19 crisis.

Companies may submit their application here.

 
Supervising Authority

Business Finland.

 
Availability

Available from 26 March 2020.

Measures taken by the Bank of Finland

Government Measure

The Bank of Finland has taken decisions on measures aimed at alleviating payment difficulties and liquidity shortages caused by the COVID-19 pandemic and ensuring access to funding for households and businesses, particularly SMEs. 

The Bank of Finland has decided to restart its activities in the domestic commercial paper markets. The size of the programme was initially €500m but was increased to €1b on 20 March 2020.

In this way, the supply of funding to Finnish businesses increase. Even though commercial paper is used for funding purposes mainly by larger companies, the purchases will also indirectly ease the funding conditions for smaller companies. This is because they will free up banks’ credit lines for smaller businesses.

On 1 April 2020 the Bank of Finland lowered the applied minimum size threshold on credit claims for domestic usage to €25k.

 
Supervising Authority

The Bank of Finland.

 
Availability

No set time period other than during 2020.

The lower minimum size threshold on credit claims will take effect immediately.

Reliefs

Reliefs in corporate tax payment arrangements

Government Measure

The Finnish Tax Administration eases the terms of payment arrangements and the Ministry of Finance prepares a lower interest rate on overdue payments on taxes included in a payment arrangement.

The interest rate on overdue payments on taxes included in a payment arrangement is proposed to be reduced from seven percent to four percent. The reduced interest rate on overdue payments is to be applied retroactively to taxes that are due for payment after the beginning of March.

The payment arrangement gives companies more time to pay their taxes. In the new proposal, taxes included in a company's payment arrangement are due in three months, whereas normally the first payment is due one month after entering a payment arrangement. In addition, the Tax Administration automatically adds new tax liabilities arising after a payment arrangement to the payment arrangement until the end of May. 

 
Eligibility

All companies affected by the COVID-19 pandemic.

 
Supervising Authority

The Finnish Tax Administration and the Ministry of Finance

 
Availability

Requests for new payment arrangements may be submitted here from 25 March 2020.

 

Relief in relation to certain administrative measures and tax payments

Government Measure

A company may request more time for filing a tax return for a justified reason (such as illness).

A company may request the Tax Authority to waive the late-filing penalty in connection with filing tax returns for a justified reason (such as illness).

If the reporting of paid wages to the Incomes Register is delayed due to falling ill, the Incomes Register's late-filing penalty will not be imposed in 2020.

As from 25 March 2020, a company may request an extension for payment of the car tax and excise duties.

A company may request changes to its tax prepayments, if the company's taxable profit is predicted to be influenced by the COVID-19 outbreak.

A company may request that its payment relating to certain upcoming tax is re-allocated to another type of tax or refunded if the company does not have any taxes, which have fallen due.

 
Eligibility

All companies affected by the COVID-19.

 
Supervising Authority

The Tax Authority.

 
Availability

From 25 March 2020.

Reduced rental payments for companies with difficulties

Government Measure

Several landlords have decided to waive or reduce rental payments for companies with significant difficulties during the course of the COVID-19 pandemic.

 
Eligibility

All companies with significant difficulties during the course of the COVID-19 pandemic.

 
Supervising Authority

Several landlords including Senate Properties, the City of Helsinki, Ilmarinen, and Varma.

 
Availability

No set time period other than during 2020.