EC approves Latvia's aid program for exporting companies

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The European Commission has approved a Latvian aid program with a budget of around €51 million to support exporting companies in the COVID-19 crisis, the EC informed the media in a statement on August 3.

The program was approved under the temporary framework for State aid measures. This public support, which will be granted in the form of direct grants, will cover up to 25% of the compulsory social security contributions paid by beneficiaries.

The program will be open to export-oriented companies in all sectors, but there are some exceptions, such as companies operating in the following areas: primary agricultural production, processing and marketing of agricultural products, the fishing and aquaculture industry, as well as the financial sector.

The program is expected to benefit around 350 companies.

The Commission concluded that this measure was necessary, appropriate and proportionate in order to avoid a serious disturbance in the economy of a Member State. On this basis, the Commission approved this measure under EU State aid rules.

In mid-July, the government allocated €51 million for support to exporting companies.

Exporting companies would be able to apply for aid:

  • if their exports of goods and services amounted to at least EUR 1 million in 2019;
  • if their revenues from the COVID-19 economic crisis have decreased by 20% during the period April to June 2020, compared to the month concerned in 2019;
  • if in 2019, the average monthly gross salary paid to employees for which the mandatory national social security contributions have been paid shall are not less than EUR 800;
  • if on the date of submission they do not have a tax debt administered by the State Revenue Service, which in total exceeds EUR 1000, except for tax payments which have been granted an extension of the term of payment or a different agreement has been entered.

The aid - one-off grant to compensate for the payment of wages - will be received by the economic operator at 25% of the mandatory national social security contributions paid in 2019, but not more than EUR 800 000. The amount of aid will be received by the performer of economic activity in one payment.

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