Under the global grant instrument Business Start-up Subsidies, compensation of labour costs is available to the borrowers of the financial instrument Entrepreneurship Promotion Fund 2014–2020 financed by the European Social Fund (EPF2). This instrument is aimed at helping the borrowers to consolidate their market position, especially during the start-up phase.

The EPF2 borrowers will be eligible for compensation of labour costs of employees hired under an employment contract. The instrument Business Start-up Subsidies will be available to micro or small companies and natural persons operating as sole proprietors or under a business certificate which meet the status of a SMB under the SMB Law and are EPF2 borrowers.

The monthly fixed rate of partial compensation of labour costs of the project promoter’s employee(s) is set at EUR 498.48. The amount of the fixed rate will not be changed during the course of projects. The maximum available amount of eligible costs of the project will be up to 50% of the actual granted and used amount of the loan.

A group of persons encountering labour market or business organisation difficulties, i.e. unemployed persons registered with the territorial labour exchange for at least 6 months, disabled persons, persons under 29 years of age, persons above 54 years of age, women and those who create and/or will create “green” jobs will be eligible for compensation of 75% of the fixed rate for the wages of the employee(s) of the applicant working under an employment contract. Whether the applicant belongs to the priority group will be determined at the time of submission of the loan application to the credit union.

If the applicant does not belong to the priority group, it will be eligible for compensation of 50% of the fixed rate for the wages of the employee(s) of the applicant working under an employment contract.

The amount of wages before taxes (gross) paid to the employee will have to be at least the minimum monthly wage. The maximum compensation availability period will be 12 months from the start of the availability period.

Two calls are scheduled to be published until 2020: EUR 8 million will be available for the first call and the second call is set to be published in the 2nd quarter of 2019. EUR 8 million will also be available for this call. The deadline for applications (under the second call) is 30 September 2020, the deadline for signing the grant agreements is 31 December 2020 and compensation will be available for wages calculated up to 30 September 2023. The partial compensation of labour costs will be made available to the project promoter in the form of de minimis aid.

The total amount earmarked for this instrument under the European Social FUnd is EUR 16 million.

The Government of Lithuania adopted a decision on minimum wages modifying the conditions under which from 1 January 2018, the minimum wage rises to EUR 400.

Instrument implementation period The deadline for applications is 30 September 2020, the deadline for signing the grant agreements is 31 December 2020 and compensation will be available for wages calculated up to 30 September 2023.
Maximum availability period 12 months from the start of the availability period.
Maximum compensation amount Up to 50% of actually granted and used amount of EPF2 loan.
Monthly fixed rate EUR 498.48
Fixed rate compensation intensity –          75% for the priority group

–          50% for others

The amount of wages before taxes (gross) paid to the employee must be at least the minimum monthly wage.

For instance, if a company had 5 employees between July and September 2017 whose gross wages were EUR 400.00 but one employee was on an unpaid leave in September and his/her calculated wage was EUR 360.00, the amount of the employee wages eligible for compensation is calculated as follows: 498.48 x (4*3+1*2) = 6,978.72*0.5 (or *0.75 if the applicant belongs to the priority group).

Eligible applicants Eligible applicants must meet all of the following requirements, i.e. must be:

(1) micro or small companies, natural persons operating as sole proprietors or under a business certificate which meet the status of a SMB under the SMB Law;

(2) borrowers of the Entrepreneurship Promotion Fund 2014–2020 financed by the European Social Fund (EPF2).

Ineligible applicants Non EPF2 borrowers
State aid De minimis aid under Regulation No 1407/2013.
Groups of persons encountering labour market or business organisation difficulties for which additional incentives will be created

 

(a borrower is bracketed within the priority group if the owner of the legal entity (micro or small company) or majority shareholder (majority shareholders in aggregate) belonging to the priority group hold 51% or more of the company’s shares or control rights)

 

–           unemployed persons (persons defined in the Employment Support Law of the Republic of Lithuania registered with the territorial labour exchange for at least 6 months in the last 12 months before the submission of an application to the credit union);

–           disabled persons (subject to submission of a disability certificate issued by the Disability and Working Capacity Assessment Office under the Ministry of Social Security and Labour to the credit union);

–           persons under 29 years of age (the age at the time of submission of a loan application to the credit union);

–           persons above 54 years of age (the age at the time of submission of a loan application to the instrument manager);

–           women (the gender criterion is assessed at the time of submission of a loan application to the credit union);

–           those who create and/or will create “green” jobs (i.e. the loan will be used for investment into the equipment, production processes and/or safe and organic products which have a direct impact on energy saving, use of renewable energy sources, protection of resources and ecosystem, pollution and waste avoidance, etc.) (the attribution to this target group is made at the time of submission of a business plan prepared for the loan to the credit union)

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