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COVID-19 Government Support Measures

17.12.2020

The declared state of emergency on March, 13 in Bulgaria was suspended as of May 13, 2020, and was replaced by an “emergency epidemic situation”, which the Government is subsequently extending, and which currently is in force until January, 31 2021. During this situation, certain restrictions, as well as economic measures are in force.

Banking and Finance

  • Measures for overcoming the consequences of COVID-19 introduced by the Bulgarian Development Bank:
    The Council of Ministers adopted a decision for increasing the capital of the Bulgarian Development Bank with 700 million BGN. The said serves for the issuance of guarantees to commercial banks for lending funds to persons, affected by the pandemic. The provision of loans is based on portfolio guarantees from the Bulgarian Development Bank to commercial banks in order to provide liquidity for overcoming the negative economic consequences of the outbreak of COVID-19.The commercial banks thus provide low-interest loans to micro-, small, medium and large enterprises. The maximum loan amount for SME is up to 1 million BGN, whereas for large enterprises it is be 2 million BGN. This program is open to all sectors and applies to the entire territory of Bulgaria, whereas eligible are companies suffering from the negative economic effects of COVID-19.
    Individuals may apply for bank loans without interest for up to BGN 4,500.

  • Measures for overcoming the consequences of COVID-19 introduced by the Fund of Funds:
    Self-employed persons and small enterprises with very short or almost no business history (currently the requirement is for businesses to have up to three completed annual financial statements), including those created by vulnerable groups (people with disabilities; people up to 29 years; unemployed for more than six months) may apply for low-interest credits up to BGN 50 000.

    Start-up and fast-growing companies active in key areas such as innovation, digitalization, bio- and nanotechnology, mechatronics, robotics, clean and information technology, pharmacy, fin-tech, and others, may apply for financing in the form of share and quasi-share investments, provided by four existing venture capital funds.
    Municipalities, PPPs, and private enterprises, including those affected by the crisis, such as companies operating in the tourism and transport sectors, etc., could apply for financial support for projects related to urban development. The total budget of this measure amounts to BGN 418 million.
    Micro-, small and medium enterprises, exercising activity in the different sectors affected by the COVID-19 outbreak, may apply for low-interest credits. The measure includes providing working capital and investment loans, including restructuring in case of the difficult financial situation of enterprises due to the crisis.
  • State Aid Grants:
    Micro- and small enterprises - In addition, the State introduced financial aid for the micro and small enterprises, starting from BGN 3000 and up to BGN 10,000.
    The state provided grants from BGN 30 000 to BGN 150 000 to medium-sized enterprises, which meet certain criteria (among else, having losses due to the COVID-19 outbreak). The deadline for this program was August, 2020.
    Agriculture sector - Introduced by the State are different types of measures for farmers and animal breeders (temporary aid for the private storage of certain cheese types; de minimis for sale of cherries, harvest 2020; state aid for animal breeders; state aid for beekeepers; state aid for farmers, growing fruits and vegetables, vineyards and oil roses).
    Moreover, agricultural producers, affected by COVID-19, processing agricultural products listed in Annex I to the TFEU or cotton, with the exception of fishery products, may apply for state aid up to 50 000 BGN.
    Bus transport companies could receive state aid in the amount of up to 8% of their turnover for 2019, whereas the state aid could not be lower than 3 000 BGN and higher than 450 000 BGN. The total budget of this program is 30 million BGN.

Labour and Employment

  • Employers are entitled unilaterally to introduce work from home for their employees or to require the employees to use their paid annual leave. They may also introduce part-time working hours.

  • The Government through the “Unemployment Fund” pays 60% of the remuneration to the employees of some categories of employers. The deadline for applying for this measure was 30th September 2020. Pursuant to this scheme (the so-called “60/40 scheme”), an entitled employer may receive support from the State in the amount of 60 % of the gross remuneration of his employee(s) if as a result of the state of emergency the employer has terminated the operation of the entire undertaking, or parts thereof, or only with regard to certain workers and employees, or has introduced part-time work. In the latter case the support shall be proportional to the idle time, but for no more than four hours.

  • Employers from all economic sectors, with the exception of agriculture, are able to hire the unemployed under the program, which is financed by the Human Resources Development Operational Programme. The measure is primarily aimed at companies in the hotels and restaurants sector and the travel agency and operator activities, as well as other travel and reservation activities.

Tourism

  • The state introduced a new program for tourist operators, who may receive State aid in the amount of up to 10% of their turnover for 2019. The total budget of this program is 10 million BGN.

  • The Government is also subsidizing the tour operators of charter flights, providing EUR 35 for every seat on the flight, provided that the seat is occupied by a person visiting Bulgaria for the purposes of tourism.

  • Certain categories of persons, generally healthcare workers (doctors, nurses, etc.), are provided with lump-sum one-time payments for the use of tourist services.

Tax

  • In conjunction with Decision No 2020/491 of April 3, 2020, of the European Commission, the state is exempting from VAT medicinal products, medical devices and personal protective equipment, needed to combat the effects of the COVID-19 outbreak.

  • The VAT rate for services provided by restaurants, sports halls (fitness centers), tour operators, as well as for goods such as books, beer and wine, is reduced from 20 % to 9%.

Other

  • The State has obliged the big chain supermarkets to designate special places for goods produced by Bulgarian regional producers (registered farm producers, etc.).

  • Bulgaria has banned the export of goods, needed to combat the COVID-19 epidemic, such as medicinal products, personal protective equipment, etc.
    The Minister of Health may impose measures and bans, such as export bans, the closing of districts or city areas, etc.

  • Bulgaria has launched the COVID-19 informational portal, providing relevant information about the pandemic, including detailed information for all government support measures, which is updated regularly.