COVID-19: measures and support for blockchain and crypto startups from the Swiss federal government and the cantons
The effects of the coronavirus continues to have drastic consequences for blockchain and crypto startups, many of which continue to build their respective projects that have yet to generate revenue. Additional further reduction in activity in the wider economy directly challenges the survival of the entire sector and each startup. Despite the creation of bridge loans available to SMEs during this critical time, startups unfortunately will not be eligible to apply for this source of financing. This scenario creates the need for help specific to startups in Switzerland.
It is of fundamental importance for the CVA that all members and broader players in the Crypto Valley ecosystem are aware of the supporting measures decided and implemented at both the Swiss federal and cantonal levels. This post has been done with content shared by the Office of Economic Promotion of Canton Zug.
The Federal Council has approved a comprehensive package of measures amounting to 32 billion Swiss Francs to cushion and reduce the economic consequences of the spread of COVID-19 on March 20 2020. (German, French and Italian).
Three new measures are especially noteworthy:
- Reduced labor: The claim for reduced labour is extended to fixed-term contracts, temporary work, apprenticeships and for owners employed by their corporation (AG or GmbH). Please find the application on the website of the unemployment insurance fund ALK.
- Self-employed (including freelance artists) with loss of business and parents who have to interrupt their employment due to childcare or quarantine ordered by a doctor can apply for compensation. The application and processing are carried out in the compensation office AHV/IV/EO.
- SME in Switzerland can apply at their bank for bridge loans. Companies can get loans up to CHF 20 million guarantee by the Swiss Confederation: https://covid19.easygov.swiss
Canton of Zug measures:
To mitigate the severe restrictions, the Cantonal Government of Zug has determined a number of locally effective measures, supplementing federal measures and based on emergency law. This includes the implementation of a helpline for Zug companies. These measures aim to ease the burden on Zug's businesses as quickly, easily and in the best way possible. The most important information can be find below (the whole Canton Zug communication can be found here in English).
Helpline for Zug-based companies
The Coronavirus Helpline is available for Zug's businesses. Questions from companies about the current situation can be asked by phone on +41 41 767 01 20 and by e-mail adressing firstname.lastname@example.org. All relevant information can be found on the Website of the Department of Economic Affairs.
Liquidity supply and support funds
Canton Zug is providing an à fonds perdu contribution of CHF 20 million as a safety net for individual companies, self-employed persons and small businesses with a maximum of 20 employees who are likely to fall through the net of existing measures. This is intended to prevent or alleviate branch closures, bankruptcies, redundancies and other drastic negative consequences. In addition, the canton of Zug intends to provide a credit default guarantee of CHF 100 million in favour of the commercial banks in the canton. This measure is a subsidiary and follow-up measure to the federal measure. The coordination of the process will be assigned to the Finance Directorate and the Zuger Kantonalbank.
Reduction of the cantonal tax rate
At its meeting this morning, the Cantonal Government also discussed a tax rate reduction. It instructed the Finance Directorate to apply within a shortened procedure to the Cantonal Council for a three-year reduction of the cantonal tax base from 82 per cent to 78 per cent (2021-2023). With this measure, the Cantonal Government is convinced that it will make an important contribution to relieving the burden on taxpayers (both individuals and companies) by introducing a meaningful economic stimulus measure.