Support for sole entrepreneurs

24.06.2020

The municipalities will award grants to sole traders in order to stabilise operations due to the coronavirus epidemic. Financial support can be applied from the municipality that the company has registered as home municipality in the Finnish Business Information System.

The sole trader coronavirus grant seeks to place the operations of sole traders on a more financially sustainable footing during and after the pandemic. This constitutes operating aid to cover expenses arising from business operations proper. The aid is temporary and in effect solely to manage an acute liquidity crisis caused by the pandemic.

Who is the aid intended for?

The grant is intended for self-employed individuals who, irrespective of enterprise form and mode of financing:

  • carry on an economic operation alone as a business operator or self-employed person without engaging any paid employees, including freelancers.
  • are in business on a full-time basis, irrespective of the legal form of the operation and its mode of financing.

Businesses employing up to four people in addition to the self-employed person may seek grant funding (business development grant in disruptions of the market and production caused by the coronavirus epidemic) from a Centre for Economic Development, Transport and the Environment (ELY), and businesses employing five or more people may seek grant funding from Business Finland (business development funding in cases of disruption). For further details

A sole trader means a full-time self-employed person carrying on an economic operation alone in Finland, irrespective of the legal form of the operation and its mode of financing.

This means that the self-employment grant may be awarded to a private trader or business name, to limited and general partnerships, to limited liability companies or to co-operatives. The grant may also be awarded to self-employed individuals known as “light entrepreneurs”, who engage in business operations without establishing an enterprise. A sole trader is a self-employed person who engages in economic activity with no paid employees. A freelance operator may also receive a grant when serving as an independent self-employed person, under a business name (as a sole trader or business operator), in a partnership (general or limited), in a limited liability company, or in a co-operative.

The grant is intended for full-time self-employed individuals. A full-time self-employed individual must be entered in the YEL pension insurance register (the application must specify the YEL pension insurance number), or must be able to demonstrate annual business income or invoicing of not less than EUR 20,000. If the business began operating less than 6 months ago, then it must be shown that continuing the income stream already generated would have resulted in invoicing of EUR 20,000 over a period of 12 months.

The self-employment grant will be awarded to an individual self-employed person. If a sole trader works alone in several businesses, then the grant will be awarded to the business in which the self-employed person works primarily.

Conditions for awarding the grant

  • the financial situation and turnover of the sole trader have deteriorated since 16 March 2020 due to the coronavirus epidemic
  • the sole trader’s business operations are assessed as viable;

The significantly impaired financial situation and reduced turnover of a business due to the corona epidemic is a condition for awarding a self-employment grant. The detrimental impact of the epidemic on the financial situation of sole traders in Finland is estimated to have begun on 16 March 2020, when emergency conditions were recognised and the Emergency Powers Act (1552/2011) was brought into use.

This means that applicants must be able to show that the significant deterioration in business after 16 March 2020 was due to the coronavirus epidemic. The application form also asks applicants to certify that the financial situation has significantly deteriorated due to the coronavirus epidemic. The deterioration in financial situation and turnover of the sole trader’s business after 16 March 2020 must be verified by providing copies of business accounts or statements of account (expenses and sales revenue).

The financial situation will be understood to have deteriorated if the turnover of the business has fallen by more than 30 per cent after remaining at almost the same level over the preceding 12-month period. The average progress of turnover may be reviewed in the case of seasonal business operations.

  • Do not send your application too early, if you can not show that the financial situation has significantly impaired.

A further condition of awarding the grant is that the sole trader is assessed to have the conditions for viable business operations. Business operations will be considered viable when this is indicated on the basis of the financial statements or tax return for 2019. The application form asks applicants to certify that the business was viable before the coronavirus epidemic.

A sole trader with outstanding tax debt must have a payment plan approved by the Tax Administration or another approved plan,such as an enforcement plan, is required. Alternatively, the entrepreneur can provide proof of having filed an application for tax debt payment arrangement. Applicants are requested to append to the application their financial statements or tax return for 2019, or their latest financial statements or tax return.Some other reliable statement (a copy of the accounts and a statement of account) must be submitted for businesses that began operating after 31 December 2019. Applicants are also requested to append a certificate of tax debts to the application, and a tax debt payment plan approved by the Tax Administration if the business has an outstanding tax liability or another approved plan, such as an enforcement plan, is required. Alternatively, the entrepreneur can provide proof of having filed an application for tax debt payment arrangement. The assessment of operating viability may give consideration to the sole trader’s account of exceptional circumstances in 2019.

Applicants are also asked to confirm their intention to continue their business operations after the coronavirus epidemic ends. Applicants are also requested to describe how they intend to use any grant awarded in order to stabilise their operations.

The self-employment grant is de minimis funding that may not exceed the de minimis cumulation allowance for the business. The maximum de minimis funding is EUR 200,000 (not more than EUR 100,000 for a road haulage business) over the current and two preceding tax years. The beneficiary is responsible for ensuring that the total de minimis aid granted by various parties (e.g. ministries and their subordinate agencies, Business Finland, Finnvera plc, municipalities and regional councils) does not exceed this amount. Not all public aid allocated to businesses is de minimis aid. De minimis aid will be recognised in the aid decision, which will specify the de minimis aid included in the decision with a reference to the European Union Regulation on de minimis aid.

A grant may be awarded in any part of Finland

Purpose for which a grant may be requested

The self-employment grant is non-recurrent compensation of EUR 2,000 for the estimated business costs of a sole trader, such as the cost of premises and equipment acquired for business operations, and for accounting and other office expenses. The wage drawn by the self-employed person is not regarded as a business cost when granting this non-recurrent compensation.

The compensation is partly intended to enable the sole trader to manage the challenging economic circumstances caused by the coronavirus epidemic. The non-recurrent compensation may be granted for costs incurred between 16 March and 31 August 2020 and the deadline for submitting grant applications is 30 September 2020. The sum in question will be an estimate, and the beneficiary will not be required to submit supporting documentation of costs when applying for the grant or thereafter.

Other points to note

According to section 4 of the Act on the Taxation of Business Profits and Income from Professional Activity, taxable business income is monetary income or benefits of monetary value received as income from business activity. As the grants/aids in question have not separately been decreed duty-free, they are taxable income for the business. The income in question is income from business activity, which has to be recorded as income in the accounts.

Municipalities will notify the Tax Administration of grants that they have paid to sole traders.

Grant applicants should note that an agreement arises between the applicant and the municipality under section 7(3) of the Act on Discretionary Government Transfers when a municipality approves an application.This agreement requires a beneficiary to immediately repay any grant that has been received incorrectly, in  excess, or in a way that is manifestly without foundation. The municipality may demand repayment of any grant paid in cases of abuse. The beneficiary agrees to furnish the awarding authority with the information that is necessary for ensuring that aid has not been requested in breach of the terms and conditions for granting aid.

A municipality that awarded a grant and the Ministry of Employment and the Economy are entitled to check the purpose for which the grant has been used retrospectively.

Questions? You will probaly find an answer to your question here

Prepare yourself to apply for the support, but do not submit your application yet!

  • Grant applications may be submitted to the municipality where the business is domiciled. The application form for the financial support for sole entrepreneurs in Vaasa, Korsholm, Vörå, Malax, Korsnäs, Laihia or Isokyrö
  • Please note: The application system is closed July 16th 2020 due to maintenance break

Application form

NB!

  • The application form cannot be saved. Please gather all material you need for filling out the application in advance. You need bank identifiers or mobile certificate for filling out the application. Image of the application form contents
  • The service requires identification with a private person’s mobile certificate or online bank identifiers – not a company’s. Please also note that the Internet Explorer web browser is not supported for data security reasons. We recommend to use for example Google Chrome.
  • You will receive a confirmation email when the handling of your application commences, within 1–2 working days from sending the application.

Information needed:

  • Business ID
  • Form of company
  • YEL insurance number
  • Commencement date of business operations
  • Bank account (IBAN)
  • Information on potential de minimis aids that have been granted within the two previous fiscal years.

Attachments needed for the application:

  • Financial statement 2019/most recent financial statement or tax return 2019/most recent tax return
  • Copies of the bookkeeping and/or bank statements to prove how sales and expenses have developed in 2020
  • Tax debt certificate or tax debt payment plan approved by the Tax Administration

 



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