LEGAL IMPACTS OF CORONAVIRUS ON COMPANIES

On 13^th March 2020, the World Health Organization (WHO) declared Covid-19 as a pandemic. The declaration of the World Health Organization is followed by European and North American states’ declaration of the state of emergency. In this article, we will be examining the potential legal impacts of Coronavirus on companies.

Even if the mortality rate of the virus isn’t as bad as other virus-like SARS, its ability to spread quickly made the virus a global issue that is going to have consequences on economies.

Firstly, we’ve seen that the price of brand petrol has sharply decreased by around USD 20. Such a decline is expected to have an influence overgrowth of economies that are dependent on the extraction of natural resources. Whereas, It seems like an opportunity for countries that are dependent outside for energy since it will have a positive effect on current account balances. Thus a decline in inflation by 0,5-1,01% is expected.

Country-specific, China is experiencing a slowdown in its industry which contributes 32% to its GDP. Also, retail sales are negatively affected by the nationwide state of emergency since It cuts down the demand.

Tourism (which contribution to GDP by 2%) is also under the influence of the virus because flights to mainland China are cancelled from the majority of the world. Thus the Chinese GDP growth rate in the first quarter of 2020 is expected to become 3%.

On the other hand, Italy suffers the most from the virus since the country has the highest number of infected people in the European continent.  The region of Lombardy faces the most infected people in Italy and the region contributes roughly 22% of the country’s GDP. Considering Italy’s GDP growth rate was only 0,2% in the past year, economists expect Italy to have a negative growth rate for 2020.

A recently completed research on companies shows that at least 51% of attendants have no plans or protocols for a potential outbreak of the virus. According to the research, 27,2% of the companies from worldwide have zero preparations or whatsoever for the state of emergency and, only  24% of the attendants are under the development of making an emergency plan. The results show us that 92% of the companies would prefer their employees to work from their homes in case of a total shutdown of their offices.

Procedures of options such as:

1. Bankruptcy,
2. Expropriation,
3. Deferred Debt and
4. Tax Credit Deferral varies from country to country

The potential impact of coronavirus via state of emergencies on the contracts will be another crucial issue for business. Contracts must be checked carefully according to chosen law and parties before making any decision such as termination, defer obligations, etc.

Countries issue economic support packages for companies to avoid bankruptcies in these extraordinary situations. Our team follows all government decrees to support our clients. Please do not hesitate to contact us.

1. Hungary Government Decrees on Coronavirus
2. Poland Government Decrees on Coronavirus
3. Turkey Government Decrees on Coronavirus
4. Germany Government Decrees on Coronavirus
5. Serbia Government Decrees on Coronavirus
6. Kuwait Government Decrees on Coronavirus
7. USA Government Decrees on Coronavirus (State by State)
8. Estonia Government Decrees on Coronavirus
9. Czech Republic Government Decrees on Coronavirus

In these extraordinary days, we provide legal services for any negative issues your company may encounter due to the coronavirus. As an innovative international law firm and thanks to our online meeting tools, Gurcan Partners continues to provide legal services by implementing the rule of preserving the distance among individuals that recommend by healthcare experts from all over the world, because we care for your health.

We can schedule your online meeting for 10 different countries with experienced and expert attorneys in their field. In these online meetings, the companies will be informed in terms of local law and procedures, the client’s needs will be clearly identified, and consultancy will be provided on legal and tax issues within the framework of country regulations.

Legal Impacts of Coronavirus on Companies 

Feride Zülal San LLBs
Serhat İlhanlı LLBs

All rights reserved. All rights of the Legal Impacts of Coronavirus on Companies article belong to Gurcan Partners International Law Firm. The author has no responsibility for the information in this article. This article is prepared just to inform.

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As Gurcan Partners International Law Firm, we provide services with our office in five EU and five non-EU countries. Please find our articles below.

• Company Taxation in Hungary I ” KATA ” Start-up Friendly Taxation
• Taxation in Hungary I Taxes – Social Security
• Company Registration in Hungary I Step by Step
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• Buying Property in Hungary
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• Real Estate Investment in Hungary
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