Czech Republic: Business closure compensation

The Czech government has issued numerous crisis regulations that aim to limit the effects and spread of COVID-19 such as closing retail stores, declaring quarantines, etc.). Due to the crisis orders, many self-employed individuals and companies are suffering huge economic losses. However, Czech legislation provides for a conditional mechanism by which any company or individual might be entitled to compensation from the state.

Please see the basic information on this compensation below.

Who can claim the compensation and starting when?

• Any individual or legal entity that has suffered a loss and fulfils the conditions below.
• The earliest date for which compensation for losses can be claimed is 12 March 2020 at 2:00 p.m. CET.

The conditions that must be met cumulatively by anyone who applies for the compensation:

• Crisis orders have been issued by the state authority – fulfilled.
• Your business has suffered a loss – to be calculated and specified in cooperation with Noerr.
• The loss is directly caused by the state-issued crisis orders – to be proved before the state authority in cooperation with Noerr.

Until when can I apply for the compensation?

• Until six months after the day you became aware of the loss. In most cases, the period in which application can be made for the compensation would start on the date of state-issued crisis orders and encompass the following days during which your business, store and/or other offices were closed.

What should I do now in order to apply for compensation?

• Collect all documentation, especially contracts, order confirmations and booking confirmations, that might be useful in order to prove the amount of loss and its direct connection to the crisis orders.
• In the meantime, take any possible measures to mitigate your loss (e.g. postpone orders that may be postponed, cancel bookings that may be cancelled); otherwise, it would be considered malpractice and compensation may not be awarded in such case.
• Contact your key person at Noerr to begin preparing the compensation application to be submitted to the state authority.