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Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for measure LU-2020-14/1941 Updated – measures in Luxembourg

Aid to compensate for temporary financial difficulties

Aides remboursables destinées à remédier aux difficultés financières temporaires liées au COVID-19

Country Luxembourg , applies nationwide
Time period Temporary, 03 April 2020 – 01 November 2021
Context COVID-19
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Access to finance
Author Patrick Thill (LISER) and Eurofound
Measure added 09 July 2021 (updated 01 June 2022)

Background information

Subject to certain conditions, the Luxembourg State grants aid in the form of repayable advances to support businesses, including natural persons carrying out their activities as their main activity and in self-employment, experiencing temporary financial difficulties as a result of the COVID-19 crisis.

They are based on the amended law of 3 April 2020 on an aid scheme for businesses in temporary difficulty and amending the amended law of 19 December 2014 on 1) social measures for the benefit of independent professional artists and intermittent workers in the entertainment industry, and 2) the promotion of artistic creation.

Content of measure

This reimbursable financing can be used by:

  1. commercial, craft or industrial enterprises that hold a business license and are not active in an excluded sector (for example, fishery, agriculture). The employer must not have been convicted at least twice for illegal employment or employment of third-country nationals in an irregular situation (exclusion for three years from the date of the judgment) and
  2. by natural or legal persons established in Luxembourg and carrying out one of the following activities on a principal and independent basis. The aid will be granted if the business is active in an eligible sector, has temporary difficulties (for example, having a negative cumulative amount exciding the subscribed share capital or has been subjected to collective insolvency proceedings or has received rescue aid and has not reimbursed the loan). Eligible costs are staff costs or, if the business is independent, 2.5 times the social minimum wage and rental costs (€10,000 per month). The application must be submitted before 1 November 2021.


The following updates to this measure have been made after it came into effect.

04 January 2022

The period of validity of certain aid measures for companies experiencing temporary financial difficulties has been extended. This extension applies to:

  1. Investment aid to stimulate business investment in the area of COVID-19.
  2. Reimbursable aid to remedy temporary financial difficulties linked to COVID-19.

Use of measure

Until 20 May 2021, 2,117 applications were eligible and processed with an total amount of €162,189,501.

Until 22 September 2021, 2,217 applications were eligible and processed with an total amount of €171,040,056.

Target groups

Workers Businesses Citizens
Does not apply to workers Sector specific set of companies
One person or microenterprises
Does not apply to citizens

Actors and funding

Actors Funding
National government
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role No involvement No involvement
Form Not applicable Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

  • No involvement
  • Main level of involvement: N/A


Social partners where not involved.

Views and reactions

Not available.



Eurofound (2021), Aid to compensate for temporary financial difficulties, measure LU-2020-14/1941 (measures in Luxembourg), EU PolicyWatch, Dublin,


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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.