Luxembourg: Additional State Aids for Businesses

To help businesses to face covid-19 crisis and its impact on the economy, parliament on Thursday passed laws allowing two new forms of state aid, including compensation for the increase of the minimum wage.

Two new business aid measures, already outlined earlier this month by minister for small and medium-sized enterprises Lex Delles (DP), were adopted by MPs in the chamber on Thursday. Thery are aimed at helping businesses overcome the economic repercussions of the health crisis.

In order to help cover part of the uncovered costs of businesses in the restaurant, tourism, event, culture and entertainment sector, new financial assistance will be allocated in the form of monthly capital grants.

This contribution is only being allocated to companies that were already active in 2019. A company launched in April 2020, for instance, will not be eligible. In addition, in order access the grants, businesses must have suffered an economic loss of at least 40% during the period from 1 November 2020 to 30 March 2021, compared to the same period in 2019-2020.

Authorities will also take into account the size of the business. Accordingly, the maximum monthly subsidy is €20,000 for micro-enterprises (below 10 employees), €100,000 for small businesses (10-50 employees) and €200,000 for medium-sized (50-250 employees) and large businesses (more than 250 employees).

The form to request these aids can be found online.

Compensating the increase in minimum social wage

The aid announced by prime minister Xavier Bettel (DP) to compensate for the increase in the minimum social wage (SSM), which will come into play as of 1 January 2021, was also adopted by MPs on Thursday. This is a €500 capital subsidy that can only be paid once to businesses in sectors hit the hardest by the covid-19 crisis.

The amount is calculated on the basis of the number of full-time employees hired before 31 December 2020.

Extension of the short-time working scheme

Finally, during a meeting of the economic and social committee on 17 December, it was decided that businesses forced to keep their doors closed in light of the current restrictions, may, in exceptional cases, benefit from an additional period to apply for short-time work for the month of January 2021.

To this end, the companies in question, who have not yet submitted a short-time working application for the month of January will be able to do so via until 30 December 2020 included.

This article was originally published in French on and translated and edited for Delano.