State to help cover rents of companies hit by coronavirus crisis

The Czech government has this week approved a new scheme under which the state will help companies struggling due to the coronavirus crisis to pay their rent. The programme will cover up to half of rental costs and will draw on CZK 5 billion from the state coffers.

Illustrative photo: K2 Space, Foter.com, CC BY 1.0 DEED

Under the COVID Rent scheme, the state will contribute 50 percent of rents on commercial properties – if the landlord reduces rents by 30 percent and the tenant covers one-fifth.

Support of up to CZK 10 million will be available to individual companies for the April–June period.

Tenants whose premises are owned by a public agency will receive direct support of 80 percent under the programme.

The minister of industry and trade, Karel Havlíček, said up to CZK 5 billion from the state coffers would be available for this purpose. His department has assigned 100 staff to the scheme.

COVID Rent is intended to help entrepreneurs forced to shut down their operations due to government measures intended to combat the spread of coronavirus. The scheme only applies to lease agreements concluded before March 12, when a state of emergency was declared.

However, firms need not have halted operations completely to avail of it. Those who continued working by, for instance, selling take-away food or providing other products by delivery or online can also avail of it.

Karel Havlíček, photo: archive of Czech Government

Minister Havlíček has stated that up to 200,000 enterprises may make use of the scheme.

It does not apply to retailers selling foodstuffs, pharmacies, toiletries stores or petrol stations. The operators of hotels and guesthouses may take part, though those offering Airbnb type services may not.

Renters need to pay themselves in advance and then seek the state contribution retrospectively. If they are related in some way to the landlord, they are ruled out of the scheme.

The Association of Shopping Centres has welcomed the programme. It had itself proposed a system under which its members and the state would jointly help retailers.

A representative of the national association said its long-term mission was to support enterprise and that it would continue to do so.

The European Commission must be notified of any public support for private entities among EU member states and it is now expected to make a ruling on the scheme, which looks likely to get underway in the latter half of next month.