‘COVID – Rent’ – A programme to support entrepreneurs whose ability to pay rent was restricted due to the government’s emergency measures

23. 06. 2020

Authors: Lukáš Syrový, Štěpán Štarha, Veronika Ždánská

On 19 June 2020, the Czech Ministry of Industry and Trade (MIT) published an invitation to apply for the ‘COVID – Rent’ Programme. The objective of the programme is to provide support in the form of the payment of part of the rent to those entrepreneurs who have been restricted in their activity by the emergency measures imposed by the government and have used their business premises under lease, sublease or usufructuary lease agreements. Applications for the support may be filed electronically via the MIT’s information system starting from 9:00 am on Friday 26 June 2020.

The objective of the programme is to distribute transparently and efficiently to entrepreneurs support worth CZK 5 billion that will be increased as necessary to cover applications filed by all entitled applicants.

The support is provided as a subsidy on rent relating to the applicant’s establishment for the period from 1 April 2020 to 30 June 2020 and amounts to 50% of the rent but no more than CZK 10 million per recipient (i.e. cumulatively for all establishments of one applicant). The subsidy is not granted on utility charges or VAT on rent.

Requirements for applicants

An applicant entitled to receive the support is a legal entity or an individual that cumulatively fulfils all of the requirements listed below:

the applicant is an entrepreneur and carries out a business activity (note: the mere lease of an establishment is not considered an activity);
the applicant uses the establishment under a lease agreement entered into and effective before 13 March 2020;
the applicant’s activity constituting the retail sale of goods or the provision of services was prohibited due to the government’s emergency measures at least part of the period from 13 March 2020 to 30 June 2020;
the applicant is not a party related to the landlord of the establishment;
the applicant is not in default on the payment of its liabilities to selected state institutions (such as the tax authority, the Czech Social Security Administration, and state funds);
the applicant has not drawn the maximum amount of the support as determined by the European Commission’s Temporary Framework per applicant (EUR 800,000).

Conditions of the support

The following conditions must be fulfilled before the application for support is filed:

the landlord has granted a discount of at least 30% for the period from 1 April 2020 to 30 June 2020;
the applicant has paid at least 50% of the rent for the same period.

If the establishment is located in a state facility, the applicant is subject to the requirement that at least 80% of the rent was paid for the period from 1 April 2020 to 30 June 2020, providing that the support is provided in the same amount.

The support will be provided from the announcement of the invitation until 31 December 2020.

Application for the support

The application must comply with all formal elements, i.e. contain the applicant’s identification, a description of the purpose of the subsidy, the required amount of the subsidy and other information that will be entered by the applicant directly in the system in the online application.

The application must then be accompanied by the following mandatory enclosures:

an affidavit of the recipient – a template affidavit will be part of the system application;
an affidavit of the landlord with a legalised signature (legalisation by a notary is also permitted) or an electronic signature – a template affidavit will be generated automatically from the system based on the data entered in the application, then the tenant must obtain the landlord’s signature in the required form;
a document substantiating the payment of rent at 100% for January and February and at least at 50% for April, May and June.

An important part of the tenant’s affidavit is a waiver of any other compensation from the state in connection with rent for the March to June 2020 period. The support may not be applied for without the waiver.

Only one application for support may be filed with the MIT in respect of one establishment. The only exception is a situation where the same establishment is used by several tenants.

The applications may be filed electronically by means of the MIT’s information system from 26 June 2020 to 30 September 2020. Login is only possible using eidentita.cz. The application system will enable representation by an agent.

A successful applicant – the recipient of the support – is required to keep the documentation relating to the support received for a minimum period of 10 years and to enable supervisory authorities to carry out an audit of the documentation for this period. In addition, competent public administration bodies may also undertake audits to review the financial management of the subsidy.

The MIT’s invitation contains more details about the programme. The information presented above summaries the most important parameters of the programme.

We are ready to assist you in filing the application. If interested, please do not hesitate to contact us. We will send you documents regarding further steps immediately.

Of course, we process the applications in all of our five offices throughout the Czech Republic. If you have any specific questions, you can contact the following key contact persons: