COVID-19
The governmental response

Last updated: May 14 2020

What form of direct liquidity support has government made available?

The government has implemented the following measures:

• EUR 12 billion of new financing (loans, guarantees) for SMEs through Finnvera plc (a specialised financing company owned by the State of Finland). Finnvera plc shall act as guarantor for the loans provided by the local banks;
• EUR 150 million of new financing through Business Finland’s financing services to travel and tourism sectors, creative sectors and for financing of subcontractor chains;
• state support to businesses will be increased and the government will provide EUR 1 billion in direct subsidies to businesses;
• additional financing for the Finnish Industry Investment’s investee companies;
• EUR 50 million of new financing through the Finnish Centres for Economic Development, Transport and the Environment by increasing the authorisations to provide grants for business development projects;
• the second supplementary budget proposal for 2020, which was presented to the Finnish Parliament by the Finnish Government on 9 April, 2020, includes an increase of EUR 450 million in grant-based business financing which is aimed at ensuring that sufficient resources are allocated for both COVID-19-related financing already in use by Business Finland and the Centres for Economic Development, Transport and the Environment;
• the second supplementary budget proposal also includes an additional capital input of EUR 150 million to Finnish Industry Investment Ltd (Tesi), for launching a funding programme to ensure that medium-sized enterprises that have run into temporary difficulties due to COVID-19 will be able to stay in business; 
• the third supplementary budget proposal for 2020, which was presented to the Finnish Parliament by the government on 8 May 2020, includes an additional EUR 700 million for share acquisitions in state ownership steering. The appropriation may also be used for arrangements to increase the capital of state majority-owned companies and state associated companies. The proposed increase is in connection with the financing of share subscriptions, where the state will subscribe shares in a share issue arranged by Finnair Plc;
• the third supplementary budget proposal also includes an appropriation of EUR 123 million for supporting food and beverage service businesses, to be used for compensating these businesses for the restrictions imposed on their activities, and to support the re-employment of their staff; and
• funding aimed at supporting sole entrepreneurs, which shall be temporarily entitled to labour market support to deal with the sudden and unforeseen decline in demand due to COVID-19 as well as a lump-sum payment of EUR 2,000 from municipalities by application, which is intended to cover costs arising from the entrepreneur's business activities (for example the costs of premises and equipment purchased for business purposes, as well as accounting and office expenses). In addition, business owners receiving start-up grants are entitled to the payment even for days when they are not able to work in their business due to COVID-19 and the maximum duration of start-up grant period is extended from 12 to 18 months.
• In addition, the government is preparing proposals regarding the following measures:
  • returning paid value added taxes to corporations. In practice this would be regarded as a loan to the government which shall be paid back to the government in two years; and
  • granting support for business costs regardless of industry. The support is intended for corporations whose turnover has fallen significantly as a result of COVID-19 and who have costs that are difficult to adjust.

What form of additional financial support for employment is there?

Employers are liable to pay pension insurance contributions. However, part of these contributions are transferred to reserves from which employers may borrow from the pension insurers. This re-lending is facilitated by Finnvera plc who will provide companies with the collateral (a guarantee covering 80% of the financing) required for such relending.

The amount of pension insurance contributions regarding earnings-related pension insurance payable by private sector employers is decreased by 2.6% for the period from 1 June 2020 until year-end 2020. This results in an aggregate relief of approximately EUR 910 million of the referred pension insurance contributions for private sector employers.

Extensions from pension insurance companies may be applied for with respect to the payment of pension insurance contributions.

What national and local tax reliefs / payment holidays have been introduced?

Due to COVID-19 the Finnish Tax Administration may agree on changes to the payment schedules for taxes. Further, for payment arrangements starting from 25 March 2020, the following reliefs for taxpayer companies may be agreed:

• Taxes that are included in a payment arrangement request will not be recovered by enforcement authorities and a company’s tax debt will not be published in the tax debt register or the protest list.
• The first instalment of the payment arrangement will fall due three months after the arrangement has become active, as opposed to one month.
• The Tax Administration will automatically include in the arrangement any new tax debts that form after the payment arrangement has been taken into use until 31 May 2020.

According to the legislative amendment (currently pending), the rate of late-payment interest on taxes included in a payment arrangement will be lowered from 7% to 4%. The lowered interest rate would only apply to taxes that are included in a payment arrangement and that fall due after 1 March 2020.

Last updated: May 14 2020

What changes to the rights of utility companies and property owners have been introduced?

None.

Has the government given guidance or introduced laws to treat COVID-19 as a force majeure event?

No.

Last updated: May 14 2020

What changes to employment law have been introduced (including social security entitlements and health and safety requirements)?

All proposed changes to employment law and social security are noted below. Please note that some of the proposed amendments (Points 6-12) entered into force on 1 April 2020 and will be valid until 30 June 2020. Furthermore, employers would still have to comply with collective agreements between national employer and employee associations.

Among others, the following measures have been proposed by the government:

1. Employers are obligated to notify the Employment and Economic Development Office (“TE Office”) of dismissals of ten or more employees on financial or production-related grounds. This obligation shall remain in force until further notice.
2. Temporary changes regarding driving times and resting periods of bus drivers and cargo transporters in road traffic. The daily resting time is reduced to nine hours and the weekly resting time is reduced to 24 hours. Also, the minimum break period of 45 minutes may be divided to periods of 15 and 30 minutes within the 4.5 hours. Normally, the maximum daily driving time is between nine and ten hours with a minimum break of 45 minutes every 4.5 hours, and the maximum weekly driving time is 56 hours.
3. By virtue of the Emergency Powers Act, the government gave a temporary work order to health care workers. People working in both public and private healthcare who have received training in the field and who have reached the age of 18 but not 68 may be required to work. The TE Office is responsible for the enforcement of the obligation to work, and the work order is issued based on individual assessment of the employee in question.
4. The employer’s pension payments shall be reduced for a temporary period by 2.6 percentage points concerning salaries paid during 1 May and 31 December 2020. The decrease will result in increases in pension payments during years 2021-2025.
5. Regarding entrepreneur’s employment pension insurance (YEL) and earnings-related pension insurance (TYEL) payments, it is possible to agree with the pension insurance company that the due dates of pension payments for salaries paid between February and May 2020 are postponed by three months.
6. Reducing the layoff notice period from 14 days to five days in the private sector.
7. Reducing the minimum negotiation times in a co-operation procedure in connection with layoffs from the current 14 days and six weeks to five days (in the private sector). The consultation periods in connection with terminations will not be changed.
8. Extending the right to layoff to fixed-term employment contracts.
9. Allowing the cancellation of an employment contract during a trial period for financial and production-related reasons.
10. Extending the obligation to re-employ to nine months if the employer has dismissed the employee during the fixed-term changes of labour law. Currently the obligation is four months or six months in employment relationships over 12 years long.
11. Cancelling the unemployment security deductible period (currently it is five days). Layoff periods are not included when counting the maximum period of the unemployment allowance.
12. Entitling employees to a daily unemployment allowance even in the case of mutually agreed layoff. Those laid off temporarily would be entitled to an unemployment benefit even if they are engaged in business activities or studies during the layoff period.
13. Shortening the employment condition (which needs to be fulfilled in order for entitlement to the unemployment allowance) from 26 weeks to 13 weeks for an employee that commenced employment on 1 January 2020 or after.
14. Offering a new benefit for persons arriving in Finland from abroad who have been placed in quarantine-like conditions and are therefore absent from work without pay. The benefit is paid for a maximum of 14 days and it is available as long as the government restrictions are in effect and until 31 August 2020. Applications for the temporary benefit can be made retroactively for three calendar months and the assistance can be paid starting from 16 March 2020.

Last updated: May 14 2020

When do businesses have to close their properties?

Restaurants, cafés, pubs and bars have been ordered to be closed for customers until 31 May 2020. Only sale of takeaway food or drinks is allowed. Pubs and bars are allowed to sell mild (< 5.5%) alcoholic beverages for customers to consume at home, provided that the seller has a retail license for alcohol. The government is planning to allow opening of restaurants gradually from 1 June 2020 onwards.

All public gatherings and events are limited to no more than ten persons until  30 May 2020. From 1 June 2020 onwards public gatherings and events are limited to no more than 50 persons. A public event is defined as amusements, contests, performances and other comparable events that are open to the public. The restriction is targeted at individuals, and does not apply to stores, shopping malls, and other similar places, unless public events are organised in them. Most of the state and municipal museums, theatres, cultural venues, libraries, mobile libraries, hobby and leisure centres, swimming pools and other sports facilities, youth centres, clubs, organisations’ meeting rooms, daytime activities for the elderly, rehabilitative work facilities and workshops, that were ordered to remain closed at least until 13 May  2020, are allowed to open and resume operations gradually and in a controlled manner from 14 May 2020 onwards. The government has encouraged private and third sector entities to act similarly.

Last updated: May 14 2020

Have there been any changes to financial market regulations (e.g. in relation to short selling)?

No.

What additional requirements have been placed on financial institutions?

The capital requirements of Finnish credit institutions are lowered. The reduction is implemented by removing the systemic risk buffer and by adjusting credit institution-specific requirements so that the structural buffer requirements of all credit institutions will fall overall by 1%. Please find more information on the decisions made by FIN-FSA at https://www.finanssivalvonta.fi/en/publications-and-press-releases/supervision-releases/2020/decision-of-the-board-of-the-financial-supervisory-authority-on-lowering-the-additional-capital-requirements-for-credit-institutions/.

What mortgage and consumer credit changes and protections have been introduced?

Please see our answer under Financial Support above.

Further, all local banks have generally indicated their willingness to agree on instalment-free periods for loans to SMEs.

On 3 April 2020, the Ministry of Justice reported that a Government Proposal to Parliament regarding the regulation of consumer credits is in preparation. This proposal will apply to all consumer credits regulated in accordance with Chapter 7 of the Consumer Protection Act (38/1978). As for now, the following measures are proposed:

• The maximum interest rate of consumer credits regulated by Chapter 7 of the Consumer Protection Act will be decreased from 20% to 10%.
• Intrusive and aggressive forms of consumer credit marketing will be prohibited – this will apply at least to direct marketing, such as SMS and email marketing.

It is expected that these changes will enter into force during May or the beginning of June and will be in force until the end of this year. More information will be available when the Ministry of Justice publishes the proposal in its entirety.

Last updated: May 14 2020

Have changes been made to annual reports filling formats and deadlines and AGMs for companies generally?

Limited liability companies whose financial years have ended prior to 25 March 2020 have been granted two months extra time to prepare their financial statements. No separate application is required in respect of this. This exception is available for all companies provided that the registration of the financial statements is possible in accordance with the time limits arising out of the law, the company makes a decision on postponing and that it is noted in the financial statements. Financial statements are still required to be adopted in an AGM within six months of the end of the financial year. Thus, the new permission technically grants companies two extra months to prepare their financial statements.

With regard to AGMs, the current guidance is that no public events with more than ten physical participants should be organised. This guidance also applies to AGMs of companies. Therefore, the AGMs should be primarily cancelled or postponed. If this is not a viable option, physical participation to the meeting should be limited by providing the shareholders an opportunity to vote by proxy or attend the meeting through remote access.

A new act came into force on 1 May 2020 that temporarily amends some provisions of, among others, the Companies Act (624/2006, as amended) in order to reduce the spread of COVID-19 epidemic (290/2020). According to the temporary act, general meetings and other similar meetings may be postponed until the end of September 2020, even if laws or articles of association of a respective company would require the meeting to be held already earlier. That possibility covers such companies which financial year has ended between 30 September 2019 and 31 March 2020. Furthermore, general meeting of a listed company or a company which shares are traded on the multilateral trading facility may be held solely as a remote meeting, in which all shareholders participate by prior vote or otherwise remotely in person or by proxy, if the company's Board of Directors resolves to convene such remote general meeting. The new act shall remain in force until the end of September 2020. The new act does not affect a company’s obligation to prepare its financial statements within six months after the end of its financial period.

Have there been changes to laws and regulations about holding board meetings?

No.

Have there been any changes to foreign investments laws?

No.

Before the COVD-19 pandemic, the Ministry of Economic Affairs and Employment in Finland published a draft government proposal for amendment of the Finnish Act on the Screening of Foreign Corporate Acquisitions. The Act will be amended to meet the requirements of the EU Regulation, and the amendments do not derive from the outbreak of COVID-19. Please find more information on the proposed amendments to the Finnish Act here: https://finland.dlapiper.com/en/news/finnish-act-screening-foreign-corporate-acquisitions-be-updated.

Are there any new requirements on annual and interim financial reporting obligations for listed companies?

No.

Are there any new requirements on the holding of shareholder meetings for listed companies?

No, although the Advisory Board of Finnish Listed Companies has given a recommendation pursuant to which listed companies are to take certain measures concerning shareholders’ meetings in order to prevent the further spread of COVID-19. These measures include but are not limited to:

• providing an opportunity to vote by a proxy or in advance;
• providing a possibility to follow the shareholders meeting through a webcast (without being officially present at the shareholders’ meeting); and
• dividing the physical participants of the shareholders meeting to separate conference rooms, as the MoJ has limited the number of persons in a room to ten persons.

Many listed companies have cancelled or postponed their shareholders meetings in light of the circumstances. 

A new act came into force on 1 May 2020 that temporarily amends some provisions of, among others, the Companies Act (624/2006, as amended) in order to reduce the spread of COVID-19 epidemic (290/2020). According to the temporary act, general meetings and other similar meetings may be postponed until the end of September 2020, even if laws or articles of association of a respective company would require the meeting to be held already earlier. That possibility covers such companies which financial year has ended between 30 September 2019 and 31 March 2020. Furthermore, general meeting of a listed company or a company which shares are traded on the multilateral trading facility may be held solely as a remote meeting, in which all shareholders participate by prior vote or otherwise remotely in person or by proxy, if the company's board of directors resolves to convene such remote general meeting. The new act shall remain in force until the end of September 2020.

Last updated: May 14 2020

What changes to law have been introduced to protect against claims by creditors?

The government announced on 28 March 2020 that it is drafting a proposal in order to make one temporary amendment to the Bankruptcy Act as follows:

• The prerequisite for bankruptcy is insolvency. In the Finnish Bankruptcy Act, the debtor company is presumed to be insolvent if it has not paid its debt within one week of receiving the request for payment. With the amendment to the law, this presumption will be temporarily removed. Insolvency must be long-term insolvency in order to file for bankruptcy by creditor’s petition.

This amendment entered into force on 1 May 2020 and will remain in force until 31 October 2020.

Last updated: May 14 2020

Have litigation procedures been adjourned / postponed nationwide?

No. Some courts have postponed hearings in less urgent matters (civil disputes). Some hearings have been conducted via teleconference.

What exceptions to postponement exist?

Urgent criminal matters such as applications for detention are to be conducted normally.

Have procedural time limits been suspended or extended?

Yes. Those procedural time limits that are set by the courts can and have been extended. However, there are certain time limits set in substantive legislation, which cannot be extended.