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COVID-19 pandemic: who and how to apply for financial support under the Corona Globalisation Mechanism?

27/07/2021
COVID-19 pandemic: who and how to apply for financial support under the Corona Globalisation Mechanism?

Many companies and associations have been and continue to be heavily affected by the COVID-19 pandemic. To provide financial support to Flemish companies and associations that suffered a heavy loss of turnover in 2020 due to the COVID-19 pandemic, the Flemish Government developed the Corona Globalisation Mechanism. This support measure aims to prevent the bankruptcy of intrinsically-viable companies and associations and can be applied for in addition to the ‘classic’ subsidies from the Flemish Government.

Are you eligible for this financial support?

To be eligible for financial support under the Corona Globalisation Mechanism, your company or association must:

  • be a company or an association with an economic activity (sole proprietorships are excluded)
  • have had a turnover of at least EUR 450,000 from 1 April 2019 to 31 December 2019
  • have had a turnover decrease of at least 60% from 1 April 2020 to 31 December 2020 compared to the same period in 2019
  • have incurred an accounting loss for the period from 1 April 2020 to 31 December 2020
  • have filed its annual accounts for the 2020 financial year with the National Bank of Belgium.

The following enterprises are not eligible for the Corona Globalisation Mechanism:

  • enterprises that made a profit during for the period from 1 April 2020 to 31 December 2020
  • enterprises that are in one of the following legal situations:
      • winding-up
      • cessation of business activities
      •  bankruptcy
      • liquidation
  • holding, management or patrimonial companies
  • enterprises whose manager is linked as a director or partner to another enterprise that has received financial support under the Corona Globalisation Mechanism and to which they provide business services
  • enterprises that on 30 September 2020 did not have an active business establishment in the Flemish Region as registered with the Crossroads Bank for Enterprises
  • enterprises that were already in financial difficulty on 31 December 2019
  • credit institutions and financial institutions that fall under the supervision of the National Bank of Belgium

How much financial support are you eligible for?

The calculation of the exact amount of the financial support under the Corona Globalisation Mechanism is a complex matter that relies on various factors. In principle, the subsidy will amount to 10% of an enterprise’s turnover (VAT excluded) from 1 April 2019 to 31 December 2019.

However, this financial support will be capped at 70% of the uncovered fixed costs for a medium-sized and large enterprise and at 90% of the uncovered fixed costs for a small enterprise. These uncovered fixed costs are the fixed costs incurred from 1 April 2020 to 31 December 2020 that are not covered by the profit contribution (i.e. revenue minus variable costs) during that same period and that are not covered by other sources, such as types of insurance or temporary support measures.

Furthermore, the amount of the subsidy will depend on the number of employees and the decrease in turnover. The maximum amount of subsidy can be determined in two ways:

  1. based on the minimum NSSO employment rate in the last 3 quarters of 2019, the minimum turnover in the last 3 quarters of 2019 and the decrease in turnover as shown in the table below:

tabel 1

  1. based on the expanded employment in the period from 1 April 2019 to 31 December 2019 and the decrease in turnover as shown in the table below:

tabel 2

This calculation method based on the expanded employment allows enterprises with no or only a limited number of permanent employees, that work with agency staff or job students, or make use of external service providers or freelancers, to also be eligible for this financial support, as these types of employment can be equated with permanent employees. Invoices from subcontractors or freelancers can count for up to a maximum of 5 full-time employees.

Moreover, the corona nuisance premium, the corona compensation premium, the corona support premium and the various Flemish Protection Mechanisms from 2020 will be deducted from financial support under the Corona Globalisation Mechanism.

Application deadline: 30 September 2021 

Applications for financial support under the Corona Globalisation Mechanism must be submitted by 30 September 2021 at the latest.

Application procedure

 The application for financial support under the Corona Globalisation Mechanism, including the required supporting documents, must be submitted to the Agency for Innovation and Enterprise (VLAIO) through a dedicated web application. VLAIO will examine the application, check its compliance with the conditions imposed by the regulations and decide whether to grant the subsidy.

Need more information or further assistance?

Please do not hesitate to contact us. Our team will be delighted to assist you in finding out if you are eligible for the financial support or in applying for such financial support.

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