The most recent measures related to the COVID-19 pandemic in the Slovak Republic – rent subsidy scheme and new financial aid framework for ensuring liquidity

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Over the last few days another significant batch of measures were adopted to mitigate the negative consequences of the COVID-19 situation, including the long awaited scheme for addressing issues related to leases of non-residential premises. In our alert we provide a brief summary of the basic parameters of the rent subsidy scheme as well as the newly adopted framework for the provision of financial aid to small, mid-sized and large businesses to secure liquidity for their operations.

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1.    Subsidy to Help Lessees

On Tuesday, (9 June 2020), the Parliament adopted an amendment to Act No. 71/2013 Coll. on the Provision of Subsidies within the Powers of the Ministry of Economy of the Slovak Republic, as amended (the "Amendment") implementing the state subsidy scheme for lessees and sub-lessees whose operations have been restricted or significantly limited for a certain period of time as a result of a decision of a Public Authority or as a result of restrictions related to the number of persons allowed to enter (sub)leased premises adopted in connection with the COVID-19 disease pandemic (the "Period of Limited Use"). At the moment, the Amendment is awaiting signing by the President of the Slovak Republic and its subsequent publication in the Collection of Laws. The Ministry of Economy intends to grant subsidies to lessees in relation to the implementation of this measure amounting to EUR 200 million.

Pursuant to the Amendment, it will be possible to apply for state aid in the form of a rent subsidy. The subsidy will be granted for the payment of rent for non-residential premises that serve for the sale and provision of services to end users, including the relevant services premises (e.g., parking space) and storage premises, as well as for the payment of rent for a market place. The subsidy may be drawn with respect to lease relationships as well as sublease relationships, however, only provided that the rent is paid in money pursuant to the relevant lease or sub-lease agreement.

Subsidy Amount

The amount of the subsidy corresponds to the amount of the rent discount for the Period of Limited Use provided by the lessor to the lessee under the agreement between the lessee and the lessor. However, the subsidy may not be more than 50% of the agreed rent. Furthermore, the subsidy does not cover fees for services related to the use of the premises (for instance, for the payment of common operating costs, utility costs) or the payment of turnover rent. If the lessor is an administrator of state owned assets (e.g. the Slovak Land Fund), the rent shall be automatically discounted by 50%.

In cases when under the lease agreement the rent cannot be distinguished from other agreed payments related to the lease, the sum corresponding to 5% of the total rent shall be deducted from the rent for the purpose of the determination of the amount of the subsidy (this amount will thus represent the sum of other payments related to the lease). The value added tax that can be deducted shall not be deemed an eligible expense with regard to those lessees that are registered for VAT. 

If the lessor and the lessee do not agree on the provision of a rent discount or if they agree on a discount of less than 50% of the rent (and do not agree on different maturity of rent), the lessee shall be entitled to pay the rent balance for the Period of Limited Use in 48 equal monthly instalments pursuant to the Amendment. 

Example: if the lessor provides the lessee with a discount of 40%, the rent subsidy granted by the state shall equal to 40% of the relevant rent. The lessee shall be entitled to pay the remaining 20% of the rent (not covered by the subsidy) to the lessor in instalments during the period of 48 months. 

The Amendment also allows lessees that have already paid the rent or a part thereof for the Period of the Limited Use to pay the rent for the period corresponding to the Period of Limited Use in 48 equal monthly instalments. Pursuant to the Amendment, the individual instalments shall be due and payable on the 15th day of the month provided that the first instalment is due and payable on the 15th day of the first month following the month in which the state of extraordinary situation ceased to exist. 

While the lessee pays the instalments according to the above, the lessor is not entitled to unilaterally increase the rent; this does not apply to situations in which the lessor and the lessee agreed on the lessor's unilateral right to increase the rent prior to 1 February 2020. Furthermore, for the purposes of the above rent subsidies, changes to the lease agreement (e.g. rent increase effective after 12 March 2020) should not be taken into account.

Requirements for Granting a Rent Subsidy 

For the purpose of the assessment of rent subsidy applications, the fulfilment of the following requirements shall be deemed automatically fulfilled (i) the lessee has settled financial relations with the state budget; (ii) the lessee is not subject to the existing enforcement of a decision; (iii) the lessee has not breached the ban on illegal employment for the last three years; and (iv) the lessee has no arrears with regard to insurance payments or other receivables towards the Social Insurance Agency and the Health Insurance Companies. 

The fulfilment of the following requirements shall be proven by the lessee in the form of an affidavit: (i) at the moment of the submission of the application, the lessee is not under bankruptcy or restructuring proceedings and a petition for the initiation of bankruptcy proceedings for the lack of property has not been denied; (ii) no valid, effective and final ban to receive a subsidy in relation to the lessee exists; and (iii) no valid, effective and final ban to receive aid and assistance provided from European Union funds exists in relation to the lessee. Furthermore, if the amount of the rent subsidy is more than EUR 100,000, the lessee is obliged to identify its ultimate beneficial owner in the application. 

If it is demonstrated in the future that the above-mentioned representations of the lessee and/or the information regarding the ultimate beneficial owner was untrue, the lessee will be obliged to return the rent subsidy. 

Submission of a Subsidy Application 

Pursuant to the subsidy scheme, the lessor (regardless of whether it is an entrepreneur or not) shall apply for the loan on behalf of the lessee and on its own account. In this manner, the subsidy shall be paid in favour of the lessee, however, directly to the lessor's account designated by it in the subsidy application. This is to prevent the lessee from using the aid for purposes other than the payment of the rent. 

The application form published by the Ministry of Economy at its website shall be submitted electronically. The duly submitted application signed by the lessor and the lessee with their electronic signatures (comprising amount of the rent discount) replaces the agreement of both parties on the amount of the rent discount. As a result, the lessee and the lessor are not obliged to enter into a stand-alone agreement on the amount of the rent discount.

If the above-mentioned requirements are fulfilled, the Ministry of Economy will remit the rent subsidy to the lessor based on the notification of the application approval delivered to the lessee and the lessor in an electronic form. 

The above subsidy scheme is awaiting approval by the European Commission. In this regard, the Ministry of Economy confirmed that the notification process of the additional scheme before the European Commission is ongoing.


2.    New financial aid to ensure liquidity 

Following the recent amendment to Act No. 67/2020 on Certain Emergency Measures in the Fiscal Area in relation to the Spread of the Dangerous Contagious Human Disease COVID-19, the draft agreements with the preliminary conditions for granting new financial aid to small and mid-sized enterprises (the "SMEs") and according to the Amendment, also large enterprises, were recently published.

Financial aid should be granted through a new financial instrument consisting of (i) guarantees (in the form of guarantor declarations pursuant to Section 303 et seq. of the Commercial Code) issued in favor of Slovak commercial banks for the purpose of the provision of bridge loans; and (ii) the waiver of guarantee fees. The purpose of this financial aid is to help enterprises to cope with the limited access to liquidity capital for reasons beyond their control as a result of the crisis.

The providers of the guarantees shall be funds managed by Slovak Investment Holding, a.s. ("SIH") within the "SIH Anti-Corona Guarantee 2" scheme and the Export-Import bank of the Slovak Republic ("Eximbanka") within the "Anti-Corona Guarantee" scheme. The guarantees and loans should be provided until 31 December 2020 and the loan agreements will be limited to not more than 6 years. The waiver of the guarantee fee shall be subject to the fulfilment of the requirements regarding the preservation of average employment and the absence of insurance arrears (see table below), and will be applied at the level of SIH or Eximbanka. 

Upon the completion of the review procedure regarding draft agreements by banks, the call for expressions of interest of the banks to participate in the scheme will be published. It is expected that the call for expressions of interest in participating in the "SIH Anti-Corona Guarantee 2" scheme and the Anti-Corona Guarantee" scheme will be published on 15 June 2020 and 22 June 2020, respectively.

The state aid scheme prepared pursuant to the Temporary Framework for State Aid Measures to Support Economy in the Current Situation Caused by the COVID-19 Disease which covers financial aid in question is also awaiting the approval by the European Commission.

Comparison of conditions of new guarantee schemes


SIH Anti-Corona Guarantee 2

Anti-Corona Guarantee

Eligible beneficiary

Enterprises established and conducting economic activities in the SR including SMEs and large enterprises registered in the Register of Public Sector Partners (the "RPSP") if the RPSP Act applies to them.

Enterprises established and conducting economic activities in the SR including SMEs (save for microenterprises1) and large enterprises registered in the RPSP if the RPSP Act applies to them.

Non-eligible beneficiaries

Enterprises conducting business in the agriculture, primary production, forest management, fishing or aquaculture sector.


The following enterprises (most important categories): 

  • enterprises which were established and started conducting business activities after 12 March 2020;
  • enterprises which as at 31 December 2019 were undertakings in "crisis";
  • enterprises which are subjects of or which meet the requirements of collective bankruptcy proceedings;
  • enterprises in relation to which a valid, effective and final decision was adopted imposing a sanction for the breach of a legal regulation prohibiting the illegal employment of third-country nationals;
  • enterprises which are subject to an outstanding recovery order following a previous Commission decision declaring an aid illegal and incompatible with the internal market;
  • enterprises falling within the highest credit risk category pursuant to the internal credit rating system of the financial institution (or Eximbanka).

Eligible costs

Investment and/or operating costs (including tax, customs and levy liabilities); an enterprise is also entitled to finance outstanding operating costs (however not investment costs) which arose prior to the submission of an application for a loan if such costs were fully or partially due from 12 March 2020.

Period for the provision of loans

As of the effectiveness of the loan agreement until 31 December 2020.

Maturity of loans

At least 2 years, however not more than 6 years, including any deferrals or amendments.

Amount of the loan

The maximum loan amount is (i) EUR 2 million, or (ii) twice the company's annual labour expenses for 2019, or (iii) 25% of the company's total turnover in 2019, whichever is lowest.

From EUR 2 million to EUR 20 million.

Maximum interest rate

Up to 3.9% p.a. for microenterprises.

Up to 1.9% p.a. for all enterprises (save for microenterprises with regard to SIH Anti-Corona Guarantee 2).

Amount of the guarantee

90% of the principal of the loan.

80% of the principal of the loan.

Obligation of instalment deferral

Compulsory deferral of principal and interest instalments to 12 months from the loan drawing.

Maximum security of loans

(i) For microenterprises with regard to a loan of up to EUR 500,000, a personal guarantee or security usual for operating loans is required; or

(i) With regard to loans of up to EUR 5 million, a pledge over receivables and stock as well as the assets that are the subject of the renewal investment is required if the loan is provided for such purpose, 

(ii) For all enterprises (save for microenterprises in the meaning of point (i)) with regard to a loan of up to EUR 2 million, a security usual for operating loans and pari passu declaration is required.

(ii) With regard to loans of more than EUR 5 million: a security at least to the extent as referred to in paragraph (i) above, but in general, it should be higher than a security with regard to loans of up to EUR 5 million.


Provision of the loan, increase and early repayment without fees and other charges in compliance with the loan and collection policy of the financial institution.

Waiver of the fee for the guarantee

Conditions: if the enterprise (i) preserves the same average employment for 12 months from the drawing of the loan as the average number of employees for the 12 preceding months from the drawing of the loan; and (ii) after 12 months of the drawing of the loan, the enterprise has no overdue liabilities related to social security, pension savings and public health insurance.

Fee for the guarantee (if it is not waived)

SMEs (including microenterprises) (i) 25 basis points for the first year (the "BP"); where 1 BP equals 0.01% p.a., (ii) 50 BP for the 2nd and 3rd years; (iii) 100 BP for the 4th to 6th years.

Large enterprises (i) 50 BP for the 1st year; (ii) 100 BP for the 2nd and 3rd years; (iii) 200 BP for the 4th to 6th years.


In addition to the aforementioned measure, SMEs may apply for multiple state aid schemes that have been adopted to facilitate the financing of SMEs via credits of EXIMBANKA SR, the Slovak Guarantee and Development Bank and commercial banks with guarantees provided via Slovak Investment Holding (see also our Client Alert available here).

We will continue to monitor the situation and the additional measures and the forms thereof that are under discussion. Should you have any questions in relation to the above, please do not hesitate to contact us.


Click here to download 'The most recent measures related to the COVID-19 pandemic in the Slovak Republic – rent subsidy scheme and new financial aid framework for ensuring liquidity' PDF in Slovak.


1 A microenterprise is defined as an enterprise which employs fewer than 10 persons and whose annual turnover and/or annual balance sheet total does not exceed EUR 2 million.


Dávid Stanek (Associate, Bratislava, White & Case) co-authored this publication.

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