Support for the Micro-, Small And Medium-Sized Enterprises, Affected by the Provisional Anti-Epidemic Measures in Bulgaria

On 18 December 2020, the Ministry of Economics and the National Revenue Agency announced the new scheme “Support through working capital for SMEs affected by the provisional anti‑epidemic measures”. The scheme aims to provide working capital to entities whose activity has been affected by the orders of the Minister of Healthcare by means of which restrictive anti-epidemic measures were introduces on the territory of the Republic of Bulgaria. Application under the measure is open from 21 December 2020 until 20 January 2021. The main parameters of the procedure are explained below.

I. Eligible Applicants

The eligible candidates are sole traders and legal entities, registered under the Commerce Act, the Cooperatives act or the Non-Profit Legal Entities Act, meeting the following criteria:

• To be micro-, small or medium-sized enterprises within the meaning of the Small and Medium-sized Enterprises Act (SMEA)¹;
• To be registered no later than 1 October 2020;
• To have suspended or limited their activity in the commercial sites for which the support is requested as a result to Orders with No.No. RD-01-626/ 27.10.2020, RD-01-655/ 13.11.2020, RD-01-677/ 25.11.2020 and RD-01-718/ 18.12.2020 by the Minister of Healthcare (hereinafter referred to as the Orders by the Minister of Healthcare);
• The main or additional economic activity² according to the Classification of Economic Activities (CEA-2008) of the applicant must be among those listed in the application conditions. These activities include, but are not limited to, retail (excluding car and motorcycle trade, other goods - mainly foodstuffs, medicines, pharmaceuticals, etc.), passenger land transport, restaurant business, film screening, purchase, sale, lease and operation of own real estate, management of real estate, travel agency and operator activity, sports activities, etc.
• The applicants who are micro- or small enterprises should not have been subject to collective insolvency proceedings under national law as of 31 December 2019 and should not have received rescue or restructuring aid or at the time the aid was granted they shall no longer be subject to collective insolvency proceedings under national law and have not received rescue or restructuring aid;
• The applicants who are medium-sized enterprises should not have been in difficulty as of 31 December 2019.

II. Amount of the Financing and Eligible Costs

The amount of the grant depends on the economic activity carried out by the applicant but cannot exceed BGN 150,000.

Depending on the code of the main or additional economic activity of the applicant as per CEA‑2008, the grant will be at the amount of 10% or 20% of the turnover, VAT excluded, from the commercial sites affected by the Orders by the Minister of Healthcare for the same period of the previous year. In case that the commercial sites were not operating in the stated period for the previous year, the turnover for October 2020 (the latter is applicable towards commercial sites opened after 1 January 2020) shall be taken into account.

The financing is aiming to support the current needs of the applicants and the implementation of working capital expenditures.

The conditions for application also provide for a number of ineligible costs, such as costs for activities that were started and physically completed or fully implemented before 13 March 2020, costs for acquisition of tangible and intangible fixed assets, costs for goods for sale, costs for recoverable VAT, costs for taxes and fees, costs for repayment of loans, interest on loans, bank fees, costs for leasing instalments. Personnel costs will also be ineligible if during the period of performance of the project (from 01.02.2020 to the final date of project performance) funds have been received under the 60/40 measure (Decree No. 55/ 30.03.2020 or Decree No. 151 / 03.07.2020), as well as under other public funding programs³.

III. Application Procedure and Necessary Documentation

The applicants under the procedure will be required to submit entirely online, through the portal for Electronic Services of the NRA the following documentation:

• Application form, filled in as per template;
• Declaration that the applicant is familiarized with the Conditions for application and the Conditions for performance;
• Declaration for the circumstances under Art. 3 and Art. 4 of the SMEA;
• Certificate for previous convictions of all persons who are authorized to represent the applicant (regardless of the manner of representation – jointly and separately), who are foreign citizens and have been convicted or are born abroad (issued no later than 6 months prior to the date of submission of the application).

At any time, the NRA may carry out official checks on the accuracy of the data, including through inquiries to the National Statistical Institute and other institutions and agencies, as well as to conduct documentary checks of the declared data and request additional information or clarifications from applicants.

The applicants shall be electronically informed for the decision regarding their applications for the grant. The grant shall be paid via bank transfer within seven working days as of the decision for approval of the applicant.

The NRA may perform subsequent control on the implementation.

¹ The concepts of “small” and “medium-sized” enterprise within the meaning of SMEA do not have identical meanings with the definitions of these concepts in the Accountancy Act (AA). It is possible for a medium-sized (respectively, a small enterprise) enterprise within the meaning of AA to not be such within the meaning of SMEA.

² As per data for 2019.

³ Such as the employment scheme under Art. 51, Para. 1 of the Employment Promotion Act, the operations of Human Resources Development Operational Program for payment of compensations for maintaining employment, as well as for supporting the employment of unemployed and inactive persons, etc.

This material is not exhaustive, is only of general nature and does not represent a specific advice or consultation. Should any additional questions arise, please do not hesitate to contact us at tel.: 02/943 37 00, fax: 02/943 37 07, е-mail: office@afa.bg or at: 38, Oborishte Str., Sofia 1504.