The Covid-19 situation has had a material negative effect on a large number of Swedish businesses and it has also led to considerable fluctuations on the financial markets. We have gathered together a number of questions and answers which we frequently encounter in our practice to help companies navigate the situation.



What applies in relation to sick pay?

Ordinarily, the employer will step in and pay 80 % of the salary up until day 14 (sick pay), save for a statutory deduction equivalent to approx. one day’s pay. From day 15 onwards, compensation to the employee will be paid by the State.

In the present situation and to avoid employees with Covid-19 symptoms infecting others, the Swedish Government has decided that employees may receive compensation from the State for the statutory deduction, and that employers carrying the cost for sick pay during the period until day 14 will also receive State compensation (for the period 1 August until 31 December 2020 only to the extent that the employer’s costs relating to sick pay are higher than what could be considered as normal). Additionally, employees will only have to present a doctor’s certificate after 21 days (the normal period being 7 days).

What does the new scheme for state supported temporary short-term work involve?

The Government has imposed new legislation implying that if trade unions/employees and an employer are able to agree to reduce working hours by either 20, 40 or 60 %, then the employer may reduce the salary paid to employees by 4, 6 or 7.5 %, respectively, and be compensated by the State for a part of the salary. Compensation from the State is available in respect of a monthly salary which does not exceed SEK 44,000.

Support will be limited to a maximum period of nine months. The new legislation aims at capturing the situation where an employer suffers from temporary and serious financial difficulties which could not reasonably have been foreseen or avoided. The employer’s business must be viable from a long-term perspective in order for support to be available, and it falls upon the employer to show that it is likely that the preconditions for support are met. Companies that recently paid out dividend or are planning to pay-out dividend or similar payments may not be eligible for state support.

The new provisions entered into force on 7 April 2020 but apply retroactively from 16 March 2020. On 9 November 2020, the Government proposed that any state support for short-term work that has been granted under 2020 may be prolonged with up to seven months, or no longer than to 31 June 2021. In January, February and March 2021, the support rate will be 75 %, which is the same level as in 2020. During April, May and June 2021, the support rate will be 50 %. For December 2020, the support rate will be 75 %, in accordance with the current rules. In order to ensure that support is only granted to those employers who meet the applicable requirements, and thus, to prevent misuse of the system, the prolongation is combined with stricter handling of the application process.

The Government has previously imposed new legislation according to which employers could reduce employees’ working hours by 80 % and simultaneously reduce the employees’ salaries by 12 %. The amendments were applicable for three months as of 1 May 2020.

Employer’s contributions & tax

Is there any relief on employer’s social contributions?

New rules on temporary reduction of employer’s social security contributions, to the effect that only old-age pension contributions remain payable, have been adopted. After the reduction, the social security contributions payable amount to approx. 10 % instead of approx. 31 %. The reduction will be available for up to 30 employees and in relation to that part of the salary of the employee which does not exceed SEK 25,000. The rules apply to salaries paid during the period 1 March 2020 – 30 June 2020.

Similar relief for those who are self-employed have also been adopted.

On 21 September 2020 the Swedish Government has, as a part of the 2021 budget proposal, proposed a temporary reduction of employers’ social security contributions for persons between the age of 19 and 23. The proposal entails that only old-age pension contributions and 9/20 of other contributions will be paid on remuneration up to SEK 25,000 per calendar month. After the reduction, the social security contributions payable amount to approx. 20 %. The temporary reduction is proposed to enter into force on 1 April 2021 and remain in force until 31 March 2023.

Is other relief available?

The Swedish Parliament has also adopted a temporary change to the rules on accrual funds for the self-employed and individuals owning shares in Swedish partnerships (Sw. handelsbolag). The new rules mean that 100 % of the taxable profit for 2019 up to SEK 1 million may be allocated to an accrual fund and will be available for set-off against future losses. The rules apply to financial years ending in 2019.

As a part of the 2021 budget proposal, the Swedish Government has also proposed a temporary tax reduction for investments. In short, the proposal provides for a temporary tax reduction of 3.9 % of the purchase price for machinery and equipment acquired during the period 1 January 2021 until 31 December 2021. In order to obtain the tax reduction, the machinery and equipment must be possessed for a certain period of time. The proposal is expected to enter into force on 1 January 2022 and apply retroactively to the purchase of machinery and equipment for the calendar year 2021.

Can companies defer any taxes or employer’s social security contributions?

In order to mitigate against temporary liquidity problems experienced by companies as a result of Covid-19, new temporary rules on payment deferral of certain taxes and employer’s social security contributions have been adopted by the Swedish Parliament. The new rules entered into force on 30 March 2020 and can be applied retroactively as from 1 January 2020.

The payment deferral includes payments of preliminary taxes on salary, employer’s social security contributions and VAT for a maximum of three months during January – September 2020. Additionally, payment of VAT which is accounted for on an annual basis from and including 27 December 2019 up to and including 17 January 2021 may also be deferred. The deferral may be granted for up to twelve months. Interest expense of currently 1.25 % (per 12-month period) and a deferral fee of 0.2 % per commenced calendar month is levied on the deferral amount up until the due month. However, no deferral fee is levied during the first six months of deferral. The interest expense and deferral fee are not tax deductible. Deferral of payment may be used by any company, provided that it does not have substantial tax debts or mismanage its financials.

The obligation to submit tax returns every month applies even if companies have been granted a deferral of payment.

The Government has proposed that payment deferrals of taxes may be prolonged with an additional year for anyone who has been granted such deferral in accordance with the new rules. Unless special circumstances provide otherwise, a prolongation may be granted upon application. Further, the Government has proposed that payment deferrals may be granted for accounting periods occurring during the period from October until December 2020. According to the proposal, payment deferrals may also be granted retroactively. The proposal will be sent on referral on 18 December 2020.

Business insurance

Will our business insurance cover loss or damage resulting from the Covid-19 situation?

Business insurance policies in the Swedish market are generally aimed at protecting against business disruption when such disruption is caused by damage to property. In other words, such policies do not typically cover the occurrence of an epidemic, but they may sometimes contain provisions regarding disruptions caused by barricades or similar obstructions put up by the police or by the emergency services. Some companies may also have taken out special insurance for disruptions caused by epidemics. These policies would generally cover disruptions caused by actions by authorities aimed at curtailing the spread of a contagious disease, although it will be important to review and understand the specific conditions under which cover is triggered.


Contractual obligations and force majeure

Will the Covid-19 situation constitute force majeure under our key agreements?

Many companies are now reviewing key agreements with a view to ascertaining whether the current situation amounts to force majeure. Epidemics such as Covid-19 may under certain circumstances be considered as a force majeure event. Under Swedish law, there may be additional grounds to invoke in the absence of a force majeure provision or when such a provision cannot be invoked.  An overall assessment needs to be made of the particular agreement considering all relevant circumstances. On you can read more about this in the article Possible contractual objections under Swedish law as a result of Covid-19


Customer relationships

What can we do if we expect that a customer will face liquidity problems?

Payment for deliveries to customers who may be expected to face liquidity problems should be secured – and if this is not possible, it is advisable to review whether the delivery can be stopped, or whether access to any goods delivered can be curtailed or the goods repossessed. Depending on the nature of the customer’s financial difficulties and the contents of the contract, it may be possible to require advance payment, or security in respect of further deliveries. If there is a bankruptcy risk, it will be important to factor in mandatory claw-back legislation into any such arrangement.


Supplier relationships

If there are indications that a supplier is facing financial difficulties, it will be important to secure necessary comfort, such as agreeing that payment will be made only on full delivery of the goods, and/or to look for alternative suppliers.



The importance of maintaining internal compliance procedures as well as identifying and mitigating new risks in disrupting times

A large number of companies and employees will almost certainly be severely impacted by the disruptions taking place as a result of the Covid-19 pandemic. The new challenges will impact companies’ compliance risks, which are likely to be different and, to a certain extent, increased. Employees who are under pressure, or scared of losing their jobs, may cut corners trying to hit performance targets. When an individual faces financial or other difficulties, the risk of misconduct (including, inter alia, the risk of fraud, embezzlement and bribery) may be increased. At the same time, social distancing and travel restrictions may make compliance with laws and rules harder to monitor.

As countries and economies reopen, there will most likely be increased pressure on companies and employees to jump-start business and the moving of goods and services. Such pressure may in turn create incentives to circumvent processes and procedures as temporary ‘emergency measures’ for the revitalisation of the business and economy. However, Covid-19 is highly unlikely to be accepted as justification for a company to violate anti-corruption or other laws, or for an employee to engage in misconduct. To best protect the company as well as its employees, an assessment should be made of what additional compliance risks that have arisen as a result of the pandemic. In addition, previously identified risks may need reevaluation and compliance measures in place prior to the outbreak of the pandemic may need to be updated to meet the new risk exposure. In order to ensure that employees and business partners are well prepared for the compliance related issues they might encounter during the course of business, it may be necessary to provide updated compliance training specifically adapted to the new or reevaluated risks.

In addition, companies should remind its employees and business representatives that, regardless of the challenging times, compliance measures may not be circumvented. A clear tone from the top will exemplify integrity and compliant behavior and resonate throughout the organisation. Employees and business partners should be encouraged to ask questions when faced with challenging decisions or uncertainty pertaining to compliance and a reporting mechanism through which employees and business partners can anonymously report alleged misconduct is recommended.

Maintaining internal compliance procedures, as well as identifying and mitigating new risks, even in times of major disruption, is crucial. The liability of a company involved in criminal misconduct may include large fines, forfeiture of profits, debarment from public procurement and significant negative publicity. The criminal liability for individuals, such as employees, members of management and board members, may include fines or imprisonment. Covid-19 has changed many things, but one thing it has not changed is the responsibility for compliant business activities.   

Real estate

Can payment of rent on commercial premises be reduced or avoided?

Both landlords and tenants are looking at the potential impact of the Covid-19 situation on their commercial lease agreements. There may be discussions as to whether the tenant’s obligation to pay rent may be affected by reference to the situation falling within any force majeureclause contained in the agreement, whether it may be mitigated by reference to the principles in Section 36 of the Swedish Contracts Act or whether it might be reduced by reference to provisions in the Swedish Land Code or general principles of contract law. If tried by courts, the answer is likely to vary depending on a number of circumstances, in particular the actual contents of the contract and the existence and contents of Government or local authority restrictions affecting the use of the premises.

For sectors especially affected by the Covid-19 outbreak, e.g. hotels and restaurants, the Swedish Government has previously adopted a regulation of state aid to landlords agreeing to a temporary discount for fixed rental costs in vulner-able sector (17 April 2020). In short, the regulation implies that the state carries 50 % of the costs for a discounted rent, but at most up to 25 per cent of the original fixed rent. Thereby, a discounted rent is subsidisedfor the landlord. The landlord was eligible for the compensation for a discounted rent during the period from 1 April until 30 June 2020, provided that a specific agreement regarding the discount had been concluded prior to 30 June 2020. Applications for compensation could be made with selected County Administrative Boards from 1 July 2020 until 31 August 2020.


Which covenants in our financing arrangements should be closely monitored?

Companies with financing arrangements should closely monitor their compliance with certain financing terms. For instance, financial covenants are typically measured on quarterly or semi-annual test dates based on certain financial ratios. A breach of financial covenants may be identified before, on, or after the relevant test date. Financial covenants can either be maintenance covenants (i.e. applying at all times) or incurrence covenants (applying only upon the occurrence of a specific event, e.g. raising of additional financing). The latter are unusual in Swedish credit agreements but more common in bond terms.

What can be done if a financial covenant breach is expected?

Possible pro forma adjustments (which can be both negative and positive for the ability to meet the financial covenants) in relation to synergies, acquisitions, disposals etc. should be considered if a breach is expected. Costs etc. incurred as a result of or to address Covid-19 effects could be deemed extraordinary items which can be added back to EBITDA. It is important to be mindful that definitions can include caps and other restrictions in relation to extraordinary items.

Some financing arrangements include so-called equity cure provisions, i.e. a pre-agreed manner for remedy of financial covenant breaches within a certain period of time after they occur. These typically require additional equity or subordinated financing.

Which other financing provisions should we monitor?

Material adverse change (“MAC”) clauses are common in financing agreements and generally aim to target the occurrence of an event or events which is/are likely to affect the ability to make payments when due or otherwise significantly deteriorate the financial condition of the borrower. Historically, MAC clauses have seldom been used to terminate loans, but the effects of Covid-19 could potentially change this practice.

Financing arrangements often include termination events in relation to (i) insolvency and insolvency proceedings, which could apply not only to the borrower but also to other group companies and (ii) cessation of business, meaning that if the borrower or a group company ceases to conduct business, this could constitute an event of default. This may be especially relevant for companies in certain business areas more affected by Covid-19, such as the travel or hospitality industry.

Cross default or cross acceleration clauses are common in financing agreements. In short, a cross default clause means that, if there is an event of default in another financing arrangement, this triggers a termination right also under the relevant agreement. A cross acceleration clause would require that the relevant other creditor has accelerated the other financing arrangement.

Are there situations when a lender may not be required to meet its obligation to provide finance?

Financing arrangements often contain clauses in relation to force majeure and market disruption which may need to be considered, as these could affect the obligations of the lenders to provide the required services under the financing agreement.


Corporate law and capital markets

Can we hold our AGM and which measures must companies take to prevent the spread of infection

The outbreak of Covid-19 has raised questions about the possibility of physical attendance at upcoming AGMs. On 20 November 2020, the Government decided to tighten the ban on public gatherings from a maximum of 50 persons to eight persons. The ban  will initially apply for four weeks, from and including 24 November 2020, and will be continuously evaluated in close collaboration with the Public Health Agency of Sweden. Even though an AGM is not formally covered by the Government's ban, the ban should, as far as possible, continue to be complied with. The ban must be seen in light of its overall purpose to prevent the spread of infection and should be regarded as indicative of what is appropriate. According to the general advices published by the Swedish Public Health Authority, measures must be taken to prevent the spread of infection and therefore meetings should, if possible, be postponed if the meeting requires participants to meet physically or, as another alternative, be carried out digitally. This also applies to companies and associations that organise general meetings. Other measures to prevent the spread of infection may be to mark distances on the floor where queues are formed and to offer the possibility of hand washing with soap and water.

It is worth noting that companies are required under the Swedish Companies Act to hold their AGM for approval of the annual accounts for 2019 by 30 June 2020 at the latest. Postponing the AGM until late June may be an option to consider for some companies.

New regulation to reduce the number of physical participants at the AGMs

The Swedish Parliament has on 3 April 2020 decided to adopt a temporary law amendment to reduce the number of physical participants at general meetings. The law amendment allows the Board of Directors, without prescription in the articles of association, to carry out advance voting (so‑called postal voting where votes are submitted in advance to the company through mail/e‑mail) and proxy collection (where the company prefills who will act as proxy). The regulation came into force on 15 April 2020 and applies to general meetings that take place after the entry into force, regardless of the date of notice. The Swedish government has proposed that the regulation remains in force under 2021.

On 18 May 2020, another temporary law amendment entered into force, which allows for general meetings to be conducted entirely without physical attendance by allowing the Board of Directors to decide that advance voting is compulsory. The regulation applies to general meetings that take place after the entry into force, regardless of the date of notice. The regulation will expire on 31 December 2020.

You can read more about this in the article Update regarding the implications of Covid-19 for upcoming AGMs on

Special applications to be applied under the Swedish Corporate Governance Code due to Covid-19

The Swedish Corporate Governance Code (the "Code") contains requirements regarding advance notice of the date of the AGM (paragraph 1.1), the attendance of members of the Board of Directors at the AGM and other general meetings (paragraph 1.2) and the preparation of a proposal for chairman at the AGM (paragraph 1.3). Due to the measures taken to limit the ongoing spread of infection, the Swedish Corporate Governance Board (the "Board") has decided that the three provisions in the Code stated above do not need to be complied with in the prevailing circumstances, which means that it does not constitute any deviation from the Code to not comply with the abovementioned three rules. These special applications apply throughout the full year of 2020.

It is worth noting that the Board's special applications do not affect the duty of the Board of Directors and the CEO to be prepared and able to provide information to the shareholders and make necessary decisions at the AGM.

Which other measures should be taken ahead of AGMs?

In addition to the above, listed companies should continue, as far as possible, to take appropriate measures to prevent the spread of infection by limiting the number of physical participants at the AGM. Proposed measures include announcing that neither food nor refreshments will be served at the AGM and that the CEO's speech be cancelled or greatly reduced. Companies can also choose to broadcast the AGM via video link or to make the CEO speech available to shareholders on their website.

When does Covid-19-related information need to be disclosed?

Listed companies have a continuous duty immediately to disclose inside information, i.e. information of a precise nature which, if made public, would be likely to have a significant effect on the company’s share price. The effects of Covid-19 on operations and profitability can potentially be considered inside information. This may be relevant, for example, if parts of the company's operations must be discontinued or a substantial contract is terminated. If the company's result is more generally adversely affected by Covid-19, it must also be considered whether it is necessary to issue a profit warning. In this regard it is important to consider whether the results will deviate significantly from what the company has announced previously.



How has Covid-19 affected, and is likely to affect, M&A processes?

M&A processes have been affected to a large extent due to Covid-19. Above all, valuations of businesses have become more difficult, resulting in pending deal discussions slowing down or transactions being postponed or aborted. There has also been a difficulty in securing debt financing of the purchase price which has dampened activity. The M&A activity is not expected to come to a complete standstill, instead businesses in certain industries will presumably benefit from the crisis. For well capitalised buyers reduced stock prices could also create new M&A opportunities.

For example, the market for W&I insurances has been affected. Insurers are though still willing to underwrite policies but in some cases with exclusions for Covid-19 and its effects. Certain financing-out conditions and considerations paid in the form of earn-outs are to be expected. Additional parts of the M&A-process like due diligence, regulatory matters and conditions precedent are also affected by the outbreak of Covid-19 which you can read more about on in the article M&A in Sweden and the impact of Covid-19.

Merger control

How does Covid-19 impact the merger control review procedure?

The outbreak of Covid-19 and the governmental measures adopted to curb the spread are also impacting competition authorities around the world. While most competition authorities are still carrying out merger control investigations and accepting notifications, they are adjusting their modus operandi. Many authorities have their staff working remotely and in-person meetings are no longer being organised. Traditional physical submissions are being replaced by new electronic filing systems. In some jurisdictions, review periods have also been suspended.

The timeline for the submission and review can be expected to be longer than usual. Notably, difficulties in obtaining feedback from third parties (i.e. competitors and customers) in connection with market investigations may cause delays in the review process. As a result, competition authorities may increasingly use the full review period or extend the review process to the extent possible by, e.g. declaring notifications incomplete or sending information requests which may stop the clock.

The European Commission (the “Commission”) has announced that it is encouraging merging parties to delay notifications to the extent possible. Contributing factors to this approach are the difficulties the Commission may face in collecting information from third parties and limitations in terms of access to information and databases for Commission staff, all of whom are working from home. Nevertheless, the Commission currently accepts and reviews non-complex notifications and has resumed its review of complex cases. The Commission may nevertheless be less willing to allow formal filings in cases requiring more complex probes or detailed feedback from the market.

The approach of national competition authorities in the EU varies across jurisdictions. As mentioned above, all periods and timelines for merger reviews are currently suspended in a few jurisdictions, e.g. Denmark, France and Spain. In Sweden, the Competition authority has not announced any adjustments to its operations.

In the United States, the Federal Trade Commission has declared that early termination of the Hart-Scott-Rodino Act waiting period will be provided on a more limited basis and later in the process than has historically been the case. The U.S. authorities have also indicated that they expect to revise existing timing agreements for complex transactions.

What should companies be mindful of when contemplating merger control filings during this uncertain period?

The competition authorities are facing unprecedented challenges due to the Covid-19 outbreak. The situation and governmental measures in place may change quickly in each jurisdiction. Against this background, it is important to closely monitor developments in the jurisdictions where merger control filings are contemplated; significant delays are possible. It is important to ensure that these potential issues are taken into account in transaction documents, e.g. regarding deadlines for the filing of merger notifications or potential longstop provisions.


Public procurement

For any urgent needs that have emerged due the Covid-19 situation, government authorities, regions, municipalities and other entities that are subject to the rules on public procurement, may enter into agreements with suppliers directly, without conducting a formal tender procedure. This is due to an exemption in the public procurement legislation which may be invoked if the purchase is absolutely necessary due to extreme urgency brought about unforeseeable events, and there is no time for conducting a formal tender procedure.


Company reorganisation

Would we be better off entering into company reorganisation?

For companies facing problems with liquidity due to the current situation, a company reorganisation may be an option. The purpose of the company reorganisation is to give an illiquid company some relief in order to deal with its financial situation. In this way, the company may avoid having to resort to liquidation or bankruptcy. To initiate a company reorganisation, the company needs to submit an application to the court, specifying inter alia the reasons for its financial difficulties and its proposed measures to turn the situation around. By means of the court’s decision to initiate company reorganisation, payment of all unsecured debts that arose before the decision is suspended. The creditors of the company are prevented from initiating any enforcement measure against the company, including filing for bankruptcy with regard to such debts. Furthermore, parties contracting with the company cannot terminate their agreements due to actual or anticipated payment difficulties. The salaries of the company’s employees will be covered by the national wage guarantee, although that is limited to a certain period and a maximum amount. As regards tax that has mainly been incurred before the date of the application to initiate reorganisation, such tax is part of the unsecured debt and will therefore also be part of a future proceeding concerning composition. During the reorganisation, the company also has the opportunity to negotiate a composition with its creditors. A composition means that the unsecured debt of the company that existed at the time of the court’s decision can be reduced to a level which the company can manage to pay. A composition agreement is enforced by a court order and is binding upon all the affected creditors. A company reorganisation can be terminated by the court, either if the purpose of the reorganisation has been achieved or if it is deemed that the reorganisation cannot be successful.


Government support initiatives

What support initiatives has the government adopted?

A number of initiatives have been presented by the Swedish Government, The Swedish Financial Supervisiory Authority (the “SFSA”) and the Swedish Central Bank (“Riksbanken”) to avoid credit supply problems and support business. These, inter alia, include:

  • Riksbanken’s making available up to SEK 500 billion in loans to the Swedish banks, to be used for on-lending to Swedish non-financial companies.
  • Riksbanken’s purchase of up to SEK 500 billion of securities up to 30 June 2021. The purchases will, if necessary, include government and municipal bonds, covered bonds and securities issued by non-financial companies. The extended government bond purchases were initiated on 18 March and purchases of covered bonds on 25 March. From 2 April, purchases of commercial paper issued in Swedish kronor by Swedish non-financial corporations was commenced by Riksbanken. From 27 April 2020, Riksbanken will purchase bonds issued by municipalities, regions and Kommun-invest i Sverige AB. During the week that begins with 14 September 2020 Riksbanken will start to purchase corporate bonds.
  • A SEK 3 billion contribution to the state-owned Almi Företagspartner, to be used for loans to SMEs.
  • The Government has on 23 April 2020 decided to adjust the requirements for Almi Invest to facilitate investments in new and existing innovative companies. The requirement for private co-financing will be decreased to 30 % as of 1 May 2020, which allows for Almi Invest to take a larger share of the investments.
  • The extension of the Svensk Exportkredit (the Swedish Export Credit Corporation, known as SEK) loan framework, from SEK 125 billion to SEK 200 billion, to be used for loans to Swedish export companies.
  • The extension of the Exportkreditnämnden (the Swedish Export Credit Agency, known as EKN) limit for guarantees, from SEK 450 billion to SEK 500 billion. As was the case during the 2008 financial crisis, EKN predicts an increase in demand for export credit guarantees as a result of the Covid-19 crisis. Furthermore, EKN has improved access to working capital credits for smaller companies, introduced a new guarantee for working capital financing for large companies and a new guarantee for sub-suppliers.
  • State guarantees for 70 % of new bank financing of up to SEK 75 million in each case to SMEs which are facing financial difficul-ties as a result of the Covid-19 situation but are otherwise viable.
  • On 16 March 2020, the SFSA resolved on a reduction in the countercyclical capital buffer rate (Sw. kontracykliska kapitalbufferten). The measure is being taken pre-emptively to avoid a credit crunch due to recent developments surrounding Covid-19 and its impact on the economy. Thus, the buffer rate is lowered by 2.5 percentage points and set at 0 %. The SFSA expects to retain the new buffer rate for at least twelve months, which means that any subsequent increases will not be expected to go into effect earlier than March 2022.
  • It was announced in a press release on the 16 March 2020 that the SFSA temporarily allow banks to fall below the liquidity coverage ratio (LCR) for individual currencies and total currencies. The objective of this measure is to ensure that limitations in the liquidity requirement’s design do not make it difficult for banks to maintain sound financing operations given the current conditions.
  • As from 14 April 2020, Banks will have the possibility of offering all new and existing mortgagors a time-limited exemption from the requirement on amortisation. The exemption applies to amortisation payments until 31 August 2021. For new mortgagors, the bank must ensure in its credit assessment during the lending process that there he is capacity to make amortisation payments even if an exemption is granted.
  • On 26 March 2020 Riksbanken decided to grant credit institutions, which are under the supervision of the SFSA, the possibility to temporarily become monetary policy counterparties to Riksbanken under certain conditions. These institutions will be able to participate in the programme for lending to non-financial companies.
  • On 19 March 2020 the Swedish Parliament decided on state credit guarantees of SEK 5 billion to airlines, which hold a Swedish commercial aviation license as of 1 January 2020. Out of which SEK 1.5 billion will go directly to Scandinavian Airlines (SAS).
  • Riksbanken offers, on a weekly basis, banks to borrow money with no upper limit against collateral with a maturity of three or six months at an interest rate equivalent to the repo rate.
  • To enhance the supply of liquidity in US dollars, Riksbanken will offer USD 60 billion to monetary policy counterparties against collateral. This is applicable from 19 March 2020 to 18 September 2020.
  • Riksbanken has adopted measures to ease the collateral requirements when borrowing from Riksbanken, such as in relation to the possibility to use covered bonds, as announced in a press release 19 March 2020.
  • Riksbanken has decided to, as of 18 March 2020, decrease the interest rate on the lending facility from 0.75 percentage points above the repo rate to 0.2 percentage points above the repo rate. Riksbanken has, as of 2 July 2020, decided to further decrease the interest rate to 0.1 percentage points above the repo rent.
  • On 22 June 2020, the Act on State Aid and the Regulation on State Aid entered into force. The said act and regulation contain provisions regarding financial support to companies having net sales which have decreased to a greater extent due to the spread of Covid-19. Briefly, this means that companies having net sales which have decreased by more than 30 % in March and April 2020 compared to March and April 2019 and the decrease of net sales almost exclusively is caused by the effects of the spread of Covid-19, under certain circumstances may receive support corresponding to a proportion of the company’s fixed costs for March and April 2020. Fixed costs include e.g. costs for rent, leasing, licensing fees and interest. Natural and legal persons with business activities in Sweden, and which are registered for F tax (corporation tax), may be eligible for this support. The requirement regarding F tax does not apply to private housing companies, foundations, non-profit organisationsor registered religious communities which are not liable to pay tax. The last date to submit an application was 1 September 2020.
  • However, due to the pandemic’s continued damaging effects on companies, the Swedish government has extended the financial support so that it includes May, June and July 2020. In order to receive financial support for May 2020, the company’s net sales must have decreased by more than 40 % compared to May 2019. In order to receive financial support for June and July 2020, the company’s net sales must have decreased by more than 50 % compared to June and July 2019. The extension, which has been authorised by the European Commission, comes into force on 19 October 2020. An application for financial support for May, June and July 2020 may be submitted between 19 October and 30 November 2020 and is made via the Swedish Tax Agency (Sw. Skatteverket). Currently, the Swedish government is working on an application to the European Commission in order to increase the maximum amount for June and July 2020 for the largest companies.
  • The Swedish government has proposed prolongation of the financial support so that it remains in force until the end of 2020. For the months of August to December, the government has specified that the support will be divided into two periods. For the period from August until October, companies that have had a loss of revenue of at least 40 % will be eligible for financial support. For support for the period from November until December, the loss of revenue must have been at least 30 percent. Fixed costs will be reimbursed with 70 % of the loss of revenue. For the period from August until December, the total support amount will be SEK 30 million per company. During November and December, the support will be as generous as the EU’s temporary state aid regulations allow, so that more companies are able to cope with the pandemic.
  • Further, the Swedish government has decided to grant financial support to self-employed individuals (Sw. egenföretagare), whose net sales have decreased as a result of the spread of Covid-19. The financial support will be calculated as a share of the turnover loss under the period March to July 2020, compared with the corresponding period in 2019. For March and April 2020, total net sales must have decreased by more than 30 %, for May 2020, the net sales must have decreased by more than 40 %, and for June and July 2020, the total net sales must have decreased by more than 50 %.
  • The Government has announced a prolongation of the financial support to self-employed individuals for the period from August until December 2020. For the period from August until October, companies that have had a loss of net revenue of at least 40 % will be eligible for support. For the period from November until December, the loss of net revenue must have been at least 30 %. The Government has also announced that the revenue limit for financial support will be reduced from SEK 200,000 to SEK 180,000 for the period from November until December. Consequently, more self-employed individuals who have been affected by the pandemic and the new restrictions will be able to benefit from the financial support.
  • Further, the Government has proposed financial support for partnerships (Sw. handelsbolag) with at least one physical partner. The support for partnerships will be based on the rules for financial support for self-employed individuals.
  • Riksbanken has decided to cut the interest supplement that applies if the requirement for onward lending to Swedish companies is not met, from 0.20 percentage points to 0.10 percentage points.
  • Riksbanken has decided to hold the repo rate unchanged at 0 per cent.
  • On 24 September 2020, the Swedish Government decided to extend the public credit guarantee (Sw. “det statliga kreditgarantiprogrammet”) for the rest of the year. The purpose of the public credit guarantee is to support small and medium-sized companies which have suffered financial difficulties as a result of Covid-19, but which are otherwise deemed as viable. Under the public credit guarantee, the Government may issue guarantees of a total of SEK 100 billion to credit institutes in Sweden for loans to such companies. In December 2020, the Swedish Government has proposed that the public credit guarantee shall be extended during 2021 so that loans issued after 31 December 2021 can be covered by the guarantee.
  • The Government is currently working on a proposal for a publicly funded loan to organisers of package travel, with the purpose of enabling such organisers to repay remaining debts to travellers. The aim is that the loans shall be paid out in the spring of 2021. The Legal, Financial and Administrative Services Agency (Sw. Kammar-kollegiet), which is currently responsible for the travel guarantee system for package travel, will be proposed as the competent authority.

Some other measures have also been taken, including, but not limited to, the following:

  • Municipalities and regions will be compensated for extraordinary costs regarding healthcare as a result of the outbreak of Covid-19. Furthermore, certain affected authorities, i.e. Folkhälsomyndigheten (the Public Health Agency of Sweden), Socialstyrelsen (the Swedish National Board of Health and Welfare) and Läkemedelsverket (the Swedish Medical Products Agency) will receive additional funds.
  • The cultural sector and the sports industry will receive support corresponding to SEK 1 billion to be provided to businesses which suffer from economic losses due to the outbreak of Covid-19. SEK 500 million will be allocated to businesses within the culture sector that lose revenue as a result of the restriction of public events. Certain regional support measures in relation to culture have also been taken. SEK 500 million will be allocated to businesses within the sports industry which organise sport events.
  • In October 2020, the Government decided to grant an additional crisis support to the cultural sector, amounting to SEK 1,5 billion. Most of the crisis support will be distributed by the Swedish Arts Council (Sw. Kulturrådet), the Swedish Film Institute (Sw. Filminstitutet), the Swedish Arts Grants Committee (Sw. Konstnärsnämnden) and the Swedish Authors’ Fund (Sw. Författarfonden). In November 2020, the Swedish Film Institute distributed SEK 60 million in crisis support to cinema owners and film distributors for the period from 1 June until 20 September 2020, with a maximum of SEK 20 million per company. A second round of crisis support for cinema owners and film distributors for the period from October until December 2020 is planned to be announced in January 2021. In December 2020, the Swedish Arts Council distributed this autumn’s crisis support of SEK 370 million. About half of the granted support will go to the music industry, and about a quarter of the support will go to the performing arts. The rest of the support will go to applicants within the fields of arts and craft, museums, exhibitions, literature and reading as well as other artistic businesses. The festival Sweden Rock and Astrid Lindgren's world will receive the highest crisis support, amounting to SEK ten million each. Further, the Swedish cultural institute San Michele on Capri in Italy will receive a grant of SEK 2 million.
  • The Swedish Civil Contingencies Agency (Sw. Myndigheten för samhällsskydd och beredskap) may allocate an additional SEK 3 million to voluntary organizations for measures that strengthen the Swedish society's preparedness and ability to handle different needs that have arisen as a result of the Covid-19 pandemic. This means that voluntary organizations may receive a total of SEK 13 million in compensation for such measures.
  • The Swedish Government has proposed an amendment to the Act on National Pension Funds (Sw. lagen om allmänna pensionsfonder (AP-fonder)). According to the proposal, the First – Fourth National Pension Funds may, under certain conditions, exceed the current limit on voting shares for holdings in Swedish public limited companies.
  • The Swedish Government has proposed increased funding for Vinnova, Rise and Business Sweden for initiatives that contribute to “restarting Sweden”. This is considered crucial for Sweden’s competitiveness and restart of the economy after the pandemic.
  • In December 2020, the Swedish Government has proposed a temporary act for the Covid-19 pandemic. The purpose is to give the government and other authorities better opportunities to take measures to slow the spread of infection, without imposing restrictions on activities that can be carried out free of risk of such spread. This may, for example, be a matter of limiting the number of visitors, opening hours or, as a last resort, closing down certain activities. The temporary law shall apply in addition to the Communicable Diseases Act (Sw. smittskyddslagen) and the Public Order Act (Sw. ordningslagen). The act is proposed to enter into force on 15 March 2021 and expire at the end of March 2022.
  • In December 2020, the Swedish Government instructed the Swedish Work Environment Authority (Sw. Arbetsmiljöverket) to, in consultation with the Swedish Public Health Agency, promptly issue guidelines to the Swedish Work Environment Authority's regulations and how they relate to the Swedish Public Health Agency's regulations and general advice for the prevention of the spread of Covid-19. The guidelines shall support employers in the systematic work with improving work environment and reducing the spread of Covid-19 in workplaces. A written report, describing the measures the authority has taken in connection with the assignment, shall be submitted no later than 26 February 2021.
  • In December 2020, the Swedish Government has proposed that parties to collective bargaining agreements may negotiate to aside the deduction from sick pay (Sw. karensavdraget), if there are special reasons for doing so. The purpose is to facilitate the possibility for employees to stay at home if they experience any symptoms, and thereby reduce the spread of infection. The Government's proposal is currently on referral.




Maria-Pia Hope, CEO Vinge, Managing Partner Stockholm

Anna Palmérus, Managing Partner Gothenburg

Rikard Azelius, Managing Partner Malmö