In accordance with Cabinet Order No. 119 of 24 March 2020, which amends Cabinet Order No. 103 On the Declaration of Emergency Situation of 12 March 2020, new restrictions take place:
- shopping centres shall be closed on weekends and holidays, except for food shops, pharmacies, opticians, pet food, hygiene and household stores, building and garden supply stores within the shopping centres;
- the provision of health services will be limited;
- companies shall primarily ensure the supply of food, medicinal products, and basic goods and their raw materials for the local market;
- medicinal product wholesalers are prohibited to export medicinal products to third countries and outside the EEA, if they are specified in the list published on the website of the State Agency of Medicines;
- the operations of fitness clubs and gyms are suspended
Remote participation in the General Meetings of Shareholders
Taking into account the prohibition on gathering in emergency situations, amendments to the Commercial Law have been adopted, which allow shareholders of limited liability companies (SIA) and stockholders of joint stock companies (AS) (hereinafter the Shareholder) to participate and vote in the meetings of the members remotely.
There are several options:
- Shareholder’s right to vote prior the General Meeting;
- Shareholder’s right to participate and vote in the General Meeting through electronic means;
- E-meetings or shareholders.
Read more in the material prepared by TGS Baltic.
Amendments to the Commercial law in Latvian available in here
Loans and guarantees
The State Development Finance Institution ALTUM provides two support instruments for entrepreneurs:
Working capital loan:
- liquidity support for entrepreneurs in the aided sectors affected by the Covid-19 crisis, with the aim to provide liquidity for the next 12 months;
- term 1-3 years;
- total loan up to EUR 1 million (and not exceeding 25% of turnover in 2019);
- the loan may be obtained if the entrepreneur had no tax debts, late payments as at 31 December 2019, and the loan will not be used to refinance other loans or to repay the principal amounts, payment of debts of affiliated undertakings, for repayment of debts accrued before March 2020 and for payment of dividends.
Regulations on working capital loans to entrepreneurs affected by the spread of Covid-19 in Latvian are available here
Grace period guarantee:
- for entrepreneurs, SMEs and large companies that have encountered objective difficulties in making loan payments to banks due to the spread of Covid-19;
- the amount of the financial service covered by the guarantee shall not exceed 25% of the total turnover in 2019, but the maximum amount of the guarantee shall not exceed EUR 5 million;
- term up to 6 years for financial leasing and investment loan financial services, term up to 3 years for working capital financial services;
- guarantee premium of 0.5% per year (for large companies 1.25% per year starting from the fourth year).
Regulations on guarantees to entrepreneurs affected by the spread of Covid-19 in Latvian here
Additional information on improving access to finance for businesses and individuals affected by Covid-19 in Latvian is available here
Sectors significantly affected by Covid-19
Aided sectors, affected by the Covid-19 crisis (list can be expanded):
- Aided sectors according to NACE codes are available here
Idle time benefits for employees
Employers whose main activity is in aided sectors, can apply for the idle time benefit by submitting an application to the SRS by April 25, 2020 (and thereafter by the 25th of each following month).
Regulations on the order and amount of the idle time benefit for an employee employed in the aided sector affected by the Covid-19 crisis in Latvian in here
In case of additional questions:
- Information for private sector employers in Latvian here
- Information for private sector employees in Latvian here
Provided that the delay has occurred as a result of COVID-19 taxpayers in the sectors affected by the crisis are entitled to apply for the extension of the tax payment term for all applicable taxes (incl. overdue tax payments).
- The taxpayer shall submit a motivated application through the EDS not later than within two months from the due payment term or from 22 March 2020.
- The SRS is entitled to reschedule or postpone the delayed tax payments on a case-by-case basis for a period of up to 3 years (from the day of submission of the application);
- The delayed tax payment, for which the extension of payment term is granted, is not subject to calculation of late interest;
- The tax payer shall not be included in the public data base of tax debtors. If the taxpayer does not make the payments within the rescheduled or postponed terms, the SRS will be entitled to cancel the granted extension term and in such case late interest will apply.
To find out more, please read our previous newsletter.