COVID-19 Economic Response for Businesses in Spain

As Spain moves to a ‘new normal’, it’s safe to say the country experienced its toughest challenge after recording more than 37,000 deaths to the coronavirus pandemic. A complete lockdown lasting more than two months left several businesses in distress and many without jobs. In times of crises, solidarity and unity are crucial. The Spanish Government, while keeping its citizens safe, initiated an economic response plan for businesses affected by the COVID-19 pandemic.

Available Funds and Grants for Businesses

  1. Measures to boost companies’ liquidity 

These measures are set in place to assist companies with compromised income due to lockdown and the coronavirus pandemic. Spain’s Foreign Trade Institute plans to refund unrecoverable company expenses incurred in 2020 as a result of the ongoing COVID-19 pandemic. 

2. COVID-19 Research Fund

Funds amounting up to EUR 24 million will be made available for companies involved in the global research program for COVID-19. This includes both the technical and health research of the virus. 

3. Deferral of loan repayments

Companies and self-employed persons who have seen a loss in income or decline in revenue, qualify for loan repayment or interest repayment for the duration on 2020

4. A moratorium on mortgage payments

This measure aims to assist both individuals and the self-employed.

5. Measures to help other sectors

Aid amounting to EUR 15 million has been approved to assist digital service providers and national broadcasters in ensuring coverage for a period of six months.

Specific Aid for the Tourism Sector

Tourism in Spain plays a significant role in the country’s GDP. In 2019, the industry contributed more than €180 billion in revenue and was the second most visited country in the world. The coronavirus pandemic is devastating global tourism as countries initiate travel bans and warnings. To assist in in the liquidity of the sector, the Spanish Government made special aid provisions for the tourism sector.

  1. Liquidity for tourism

A loan facility amounting up to EUR 200 million is made available to businesses currently operating in the industry. This is to help retain staff and assist with other financial obligations. 

2. Reduce social security contribution

Provision is made for hotels, restaurants, amusement parks, etc. to apply a discount of 50% employer’s Social Security contributions for the period from 1 January 2020 to 31 December 2020. Also, suspending interest and principal payments for a period of one year, for loans granted by Secretariat of State for Tourism. Provision is made for harbour dues and transitional measures relating to national ports. These measures include reductions of fees for the use of public land for private purpose—furthermore, an exemption of vessel fees for vessels anchored in port waters. 

In addition to the measures mentioned above, the Government has initiated tax relief efforts to assist businesses with an annual turnover of less than six million euro loans (capped at 30,000 euros) and other financial schemes for companies and employers who lost an income as a result of the COVID-19 pandemic. For more information on the application and requirement for the relief, visit COVID-19 Tax Relief Measures in Spain.

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