Closure compensation

The closure compensation compensates for costs for companies whose premises have been closed or opening hours restricted on the basis of an act or official order related to the management of the pandemic. The closure compensation is intended for companies that meet the following conditions:

1. The company’s premises have been ordered to close, the opening hours of the premises have been restricted or public events organised by the company have had to be cancelled on the basis of an act or regulation related to the management of the pandemic.
2. The order was directed at the company between 21 December 2021 and 28 February 2022.
3. It was not possible to deviate from the order with a COVID certificate.

Closed companies may also apply for cost support, provided that the conditions for the support are met.

The closure compensation is intended for companies that were ordered to close:

1. Completely: The company’s premises were completely closed according to Section 58g of the Communicable Diseases Act. By regionally targeted decisions, the municipality or the Regional State Administrative Agency has ordered the closure of sports facilities and gyms, public saunas, spas and swimming pools, dance venues, choral singing and amateur theater spaces, amusement parks and theme parks, indoor playgrounds and venues, as well as public lounges in shopping centers.
2. In part: Restaurants and food and beverage serving facilities which, due to restrictions, have not been able to carry on their business. The closed part is considered to be the part of the day when the restaurant had to be kept completely closed to customers, e.g. dinner restaurants and nightclubs. If the company had takeaway sales after 6 p.m., sales in the closed business share are taken into account.
3. For organisers of public events: The closing order has resulted in the cancellation of the public event, or it has limited the number of audience to such a small size that it was not possible to organize the event.

If the company’s premises have been closed or their opening hours are restricted, the company may apply for closure compensation for the days covered by the order. Check the closing periods in accordance with official regulations.(linkki välilehdelle)

Closure compensation may be granted for cancelled events if the company is the main organiser of the event and it is a public event for at least 50 people. The company may receive compensation if the event is completely prohibited or restricted in a way that has made it impossible to arrange. Closure compensation cannot be granted for a postponed event.

In addition to companies, foundations and associations can apply for compensation if they have business activities. The legal form of the companies is not limited. However, the company must have a Business ID.

A company may be granted closure compensation if its premises have been ordered to close on the basis of an act or an official order related to the management of the pandemic between 21 December 2021 and 28 February 2022. Closure compensation may also be granted if the opening hours of the premises are significantly limited.

The share of the business subject to the closure order is determined on the basis of the data for November 2021.

A company may be granted closure compensation if its premises have been ordered to close on the basis of an act or an official order related to the management of the pandemic between 21 December 2021 and 28 February 2022. Closure compensation may also be granted if the opening hours of the premises are significantly limited.

The share of the business subject to the closure order is determined on the basis of the data for November 2021.

Closure compensation may be granted if the opening hours of the premises have been significantly restricted on the basis of an act or official order related to the management of the pandemic.

For example, restaurants that have not been able to carry on their business due to restrictions may apply for closure compensation. The closed part of the day is when the restaurant had to be kept completely closed to customers, e.g. in the case of dinner restaurants and nightclubs. If the company had takeaway sales after 6 p.m., sales in the closed business share are taken into account.

A company may receive closure compensation for a cancelled event if the event meets the following conditions:

1. The company is the main organiser of the event.
2. The event is an open public event, and not for example an in-house event.
3. The planned audience for the event is at least 50 people.
4. The planned date of the event was 21 December 2021–28 February 2022.
5. Public events are prohibited on the basis of an act or authority order related to the management of the pandemic, or the event has been restricted in a way that has made it impossible to organise.
6. It has not been possible to deviate from the order or restriction with a COVID certificate.
7. The event has not been moved to another time.
8. Events are also subject to closure compensation if they are part of the company’s basic business, such as cinema screenings and serial sporting events.

The closure compensation will reimburse the event’s main organiser for expenses related to the planning and organisation of the event incurred between 1 October 2021 and 28 February 2022.

The closure compensation cannot be granted if it would have been possible to deviate from the order or restriction with a COVID certificate.

The application round for closure compensation begins on 22 March 2022 at 9 am. The application round ends on 20 April 2022 at 4:15 pm.

You can apply for closure compensation with an electronic application. The application will be opened on State Treasury’s webpage on 22 March at 9 am.

You can apply for a closure compensation if:

• the company’s premises are completely or partially closed, or the organisation of a public event is prohibited on the basis of Section 58g of the Communicable Diseases Act
• the company has a Business ID

The form of company is not relevant.

Voluntary closure of business premises is not sufficient to receiving closure compensation. It is also conditional on the fact that it was not possible to deviate from the restriction by requiring customers to issue an EU digital coronavirus certificate (coronavirus passport) as referred to in Section 58i of the Communicable Diseases Act.

The maximum amount of closure compensation is EUR 2.3 million. If the support ceiling has been exceeded, no compensation may be granted.

According to the law, closure compensation is also not granted in the following situations:

• • The company is a theater, orchestra or national art institution that is covered by central government transfers or state subsidies.
  • The company operates in the arts sector and receives grants from the Arts Promotion Centre Finland.
  • The company is a credit or financial institution, or its main activity is primary production, fisheries or aquaculture.
  • The company is not registered in the Prepayment register.
  • The company has neglected to fulfill the reporting obligation concerning taxation.
  • The company has tax debt information in the Tax debt register.
  • The company has been declared bankrupt, or it has a case concerning a declaration of bankruptcy pending in a court of law.
  • A small or micro-sized company was in difficulty before the coronavirus pandemic (31 December 2019) and is undergoing company reorganization or has been granted rescue or restructuring aid.
  • A medium-sized or large company was in difficulty before the coronavirus pandemic (31 December 2019).

The company was in difficulty before the coronavirus pandemic (31 December 2019). Exception: However, this does not apply to small and micro-enterprises that have been in difficulty before 1 January 2020. They may also be granted aid if, at the time the aid was granted, the company is not in bankruptcy or reorganisation proceedings and has not received rescue aid or restructuring aid.

Definition of a company in difficulty in the EU Regulation:

A company in difficulty refers to a company in accordance with Article 2(18) of the General Block Exemption Regulation of the EU. According to the definition, a company is in difficulty,

a. if more than half of its share capital has disappeared as a result of accumulated losses (limited liability companies),
b. more than half of its capital as shown in the company accounts has disappeared as a result of accumulated losses (companies where at least some members have unlimited liability for the debt of the company),
c. the company is subject to collective insolvency proceedings,
d. the company has received rescue aid and has not yet reimbursed the loan or terminated the guarantee, or has received restructuring aid and is still subject to a restructuring plan,
e. the company is not an SME, and for the past two years, its book debt to equity ratio has been greater than 7.5 and its EBITDA interest coverage ratio has been below 1.0.

Only section c applies to SMEs that were under 3 years of age on 31 December 2019.

The amount of the closure compensation is based on how much the company’s expenses have been in January-February 2022 and how much of the business has been closed.

The company’s wage expenses are taken into account, multiplied by the share of the closed business. Other expenses are taken into account multiplied by the share of the closed business and multiplied by figure 0.7.

The total amount of payroll and other expenses is divided by the number of calendar days in the comparison period (59) and multiplied by the number of calendar days of the closing period.

Any aid granted by the Ministry of Education and Culture (OKM)  and insurance compensation for the same costs are deducted from the compensation.

If the amount of compensation after deductions is less than €2,000, no compensation will be paid.

The closure compensation does not compensate for business losses.

Example 1

The company has one business site that has been completely closed by decision of the Regional State Administrative Agency (based on Section 58g of the Communicable Diseases Act) between 15 January and 15 February 2022, so that the company has no business at all during the closure. As the business has been closed in its entirety on the basis of the closure order, the company will be compensated for the amount of fixed costs for January-February 2022 by 70 %, and the amount corresponding to the wages for January-February by 100 %, adjusted to the length of the closure. In January-February 2022, the company had fixed costs of EUR 2,500 and wage costs of EUR 5,000. Of these, EUR 2,500*0.7+5000=6750€ are taken into account. This amount is divided by the number of days in January-February, 59, in order to obtain the daily amount according to the January-February data. This is multiplied by the number of days of the closing period (15.1.-15.2.2022), 32 days: 6750/59*32=3661.01 €. The compensation amount is EUR 3,661.01.

The closure compensation can be applied for even if the company has already received other direct supports to mitigate the consequences of the coronavirus pandemic. However, the maximum compensation per company provided by the EU, EUR 2.3 million, must not be exceeded. The maximum amount of support is calculated considering all support granted under the EU framework support programme, and received by an individual company or corporate group.

The following supports are part of the EU Framework Support Programme of EUR 2.3 million:

• Business cost support (State Treasury)
• Closure compensation (not closure compensation for medium-sized or large companies) (State Treasury)
• Event guarantee (State Treasury)
• Support for cultural events cancelled or organised smaller due to the coronavirus pandemic, as well as support for interrupted competition series at the top division level of sport and sports federations organizing series (Ministry of Education and Culture OKM).
• Coronavirus support for cultural heritage communities, coronavirus support for cultural communities and coronavirus grant for arts and culture festivals (Ministry of Education and Culture OKM)
• Support for re-employment in the restaurant sector (KEHA Centre)
• Government grant for promoting journalistic content (Traficom)
• Temporary RDI loan during a business disruption, if the loan has been granted in accordance with the framework support programme and not in accordance with the Block Exemption Regulation (Business Finland)
• Temporary extended ELA by the Åland Provincial Government (tillfälligt utökat likviditetsstöd)
• Development grant granted by the ELY Centres where, exceptionally, the aid has been granted under the framework support programme and not as de minimis aid.