Background information

Following a surge in COVID-19 infections, the Latvian Government declared a 3-month long state of emergency on 9 October 2021, starting from 11 October 2021. Later, on 21 October, the Government introduced a four-week period of even more strict restrictions to significantly slow down the spread of COVID-19. To help entrepreneurs overcome this phase of the crisis, the government introduced several support measures.

The grant for working capital flow is based on the previously developed support measure Grant for working capital flow .

On 7 December 2021, the government amended regulation No. 676 “On support to companies affected by the COVID-19 crisis to ensure the flow of working capital”. The amendments were agreed with the European Commission and entered into force on 17 December 2021.

On 6 January 2022 the state of emergency was extended until 28 February 2022.

Content of measure

To help overcome the third wave of COVID-19, the grant to compensate is available for companies affected by restrictions on economic activity set in the country for October, November, December 2021 and January 2022, that resulted in a decline in turnover:

• at least 20% of the average turnover in July, August and September 2021;
• or by at least 30% compared to the turnover in the corresponding month of 2019 (the turnover in 2021 has to exceed 10% of the turnover in the corresponding calendar month of 2019 for at least 3 months).

New companies registered after 1 January 2021 can apply for support if the criterion of a 20% drop in turnover is met, compared to the average turnover in July, August and September 2021.

Only entrepreneurs who carry out economic activities in the sectors specified in the regulations may apply for support for December 2021 and January 2022. The list includes bars, cultural activities, artists' activities, artistic and literary creation and interpretation activities, gambling and betting, and amusement and recreation activities.

The amount of the grant is 30% of the total amount of the gross salary paid by the company (including the employer's mandatory state social insurance contributions) calculated in July, August and September 2021. The maximum support available per company is €250,000 per month. The maximum amount of support available to a group of related companies is €2.3 million.

When applying for support for a wage subsidy and a grant, the wage subsidy support is paid as a priority.

Use of measure

Not available.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Sector specific set of companies	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	Consulted	Consulted
Form	Any other form of consultation, institutionalised (as stable working groups or committees) or informal	Any other form of consultation, institutionalised (as stable working groups or committees) or informal

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

• Unknown
• Main level of involvement: Unknown

Involvement

Peak level social partners’ organisations are normally informed of Government decisions. Regarding COVID-19 measures, social partners participate in working groups and depending on their capacities are involved in consultations and negotiations.

Views and reactions

No specific views to report.

Sectors and occupations

This case is not occupation-specific.

Sources

• 08 October 2021: From 11 October, an emergency situation is declared in Latvia for three months (www.mk.gov.lv)
• 21 October 2021: During four-weeks period, Latvia will put in the maximum efforts to control the Covid-19 pandemic (www.mk.gov.lv)
• 17 December 2021: Regulations Nr. 676 On support to companies affected by the COVID-19 crisis to ensure the flow of working capital (17 December 2021) (likumi.lv)
• 10 January 2022: State Revenue service website (accessed on 10 January 2022) (www.vid.gov.lv)