Switzerland: Additional “hardship compensation” for companies (COVID-19)

Switzerland: “Hardship compensation” for companies

The Swiss government on 13 January 2021 imposed stricter measures to curb the spread of the coronavirus (COVID-19) virus, and at the same time, increased its “hardship compensation” fund for the hardest hit sectors of the economy.


The funds will be provided jointly by the Swiss Federation and the cantons. 

The Swiss Federal Council relaxed the conditions that a company must meet in order to receive hardship aid.

  • Businesses that have been officially closed for at least 40 calendar days since 1 November 2020 are now considered “hardship cases” without evidence of a revenue decline.
  • The upper limits for non-refundable contributions will be increased to 20% of revenue or CHF 750,000 per legal entity.
  • Compensation for any decrease in revenue that occurred in 2021 can now also be claimed. To determine the extent of the decline in revenue, the revenue of the last 12 months may be used instead of the 2020 annual revenues. However, the non-refundable contributions may not exceed 20% of the average revenues of 2018 and 2019.
  • For all companies receiving financial support, a ban on paying dividends will be shortened from five years to three years or until the funds have been repaid.

In addition to these contributions, loans and guarantees with a maximum duration of 10 years may be granted and can amount to a maximum of 25% of average annual revenues generated in 2018 and 2019, but may not exceed the amount of CHF 10 million per legal entity.

This regulatory amendment allows cases of hardship to be supported broadly. More than half of the cantons are already starting to accept applications for hardship benefits during January and all cantons are expected to pay out support by February 2021.

To be eligible for financial support, the following requirements must be met—the company had to be incorporated before 1 March 2020, had minimum revenue of CHF 50,000, its salary expenses were primarily within Switzerland, and it is able to show documentation and evidence (such as annual financial statements and monthly financial reporting).

Furthermore, the decrease in revenue during the last 12 months needs to be at least 40% or the government-ordered shutdown needs to be at least 40 calendars days since 1 November 2020.

Read a January 2021 report prepared by the KPMG member firm in Switzerland

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