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Covid-19 support for small businesses and startups in Taiwan

by Christine Chen

In 2020 at the onset of the COVID-19 pandemic, Taiwan’s government introduced a Special Act (Special Act for Prevention, Relief, and Revitalization Measures for Severe Pneumonia with Novel Pathogens) to provide subsidies and grants to support impacted businesses in Taiwan. Since an increase in domestic infections in May 2021, and the moving to a Level 3 alert, meaning restaurants, entertainment venues and other businesses had to close, the government on 24 June introduced further support. The government adjusted the alert level down to Level 2 on 27 July.

This article summarizes the latest support available for small businesses and startups. Small businesses refer to companies with under 200 employees or paid in capital of NT$100 million (approx. US$3.6 million) or less.

Subsidies for small businesses

Generally, small businesses in Taiwan in some industries whose turnover has been negatively impacted by over 50% in either May, June, or July 2021, can apply for subsidies. The government will subsidize the business with NT$40,000 (approx. US$1,428) per employee as a one-off payment.

In addition, if subsidiaries in these industries are forced to close because of Covid restrictions and are unable to pay basic salary to their employees, they can apply for a closed-down subsidy. The government will subsidize businesses with NT$10,000 (approx. US$357) per employee. The government will also offer NT$30,000 (approx. US$1,071) in subsidies and NT$10,000 (approx. US$357) drawn from employment stability funds to each employee working at impacted businesses.

The Executive Yuan has requested that applications are examined leniently to protect as many affected businesses as possible. Businesses can only choose one of the options mentioned above to apply for the subsidies.

Bailout Loans

The government has prepared a total of NT$ 1.2 trillion (approx. US$ 42.8 billion) in bailout loans, of which NT$800 billion (approx. US$ 28 billion) is new funds introduced on 24 June. The loans are also designed for individual laborers, small businesses, referring to a company with under 200 employees, or small-scale profit seeking enterprises. The details are as follows.

For most enterprises impacted by the pandemic, the government will provide bailout loans with a maximum amount set at NT$150 million (approx. US$5.36 million) for turnover or capital expenditures. The government is also providing bailout loans covering operational costs (such as salary, rent, and so on) up to a maximum of NT$6 million (approx. US$214,290).

Loans for Startups provided by the NDC

The National Development Council (NDC) will provide loans to startups up to a maximum of NT$26 million (approx. US$928,570) per applicant.

Loans for Small Businesses provided by the Central Bank

The government will provide project financing for businesses applying for loans up to NT$16 million (approx. US$571,430) from Taiwan’s Central Bank.

For more information on the impact of Covid-19 on businesses in Taiwan, please contact Christine Chen at cchen@winklerpartners.com.

This update was written by Christine Chen and trainer lawyer Kai-yu Chang.

 

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