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EN-OPORA – Our International Business Cooperation Project

Sergey BORISOV

Deputy Chairman of the Government Commission for Development of Small and Medium Entrepreneurship, OPORA RUSSIA President, Sberbank of Russia Vice President

Experience of USRF in Support of the Innovative Projects on Economy, Entrepreneurship and Education in Russia

Dr. Mark G. POMAR, President of the US Russia Foundation for Economic Advancement and the Rule of Law (USRF)

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OPORA RUSSIA's activity

OPORA RUSSIA Activity Presentation & Information about small and medium entrepreneurship in Russia

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Medium and Small Business in Russia

According to data of the Federal State Statistics Service (Rosstat) and the Federal Tax Service (FTS Russia) obtained as of July 1, 2010 in the Russian Federation 5.650.313 subjects of small business function. They include:

1.374.661 micro enterprises in Russia (according to Part 1, Article 4, Federal Law No.209-FZ from July 24, 2007 “About Development of Medium and Small Entrepreneurship”, the statistical investigation of the related organizations is carried out once per a year) – the number of the employees is up to 15 persons, the annual turnover is up to 60 million rubles;
219.607 companies of small business in Russia – the number of the employees is 16 to 100 persons, the annual turnover is up to 400 million rubles;
18.260 middle companies in Russia – the number of the employees if 101 to 250 persons, the annual turnover is up to 1.000 million rubles;
4.037.785 sole entrepreneurs in Russia.

Small business in Russia

The number of the small enterprises in Russia (excluding the micro enterprises) was reduced by 3.6% and amounted to 219.607 units against the first six months of 2009 (227.706).

Beginning from July 1, 2009 to July 1, 2010 a certain reduction in the whole number of the small companies was observed featuring the majority of the branches including the retail and wholesale trading (–6.6%), building (– 4.8%), agriculture (–4.5%), and manufacture (– 3.3%). Actually the number of the small companies in Russia engaged in the real estate, renting and servicing activities was not changed (– 0.5%). The positive dynamics was observed in such areas as restaurant and hotel business (+ 5.5%), public health and social services (+ 2%) in Russia.

Measures and Tends of Progress

The key factor has been achieved in recent years of development of the business in Russia, notably recognition of small business significance to find the solutions for structural diversification and economic development of Russia on the innovations’ basis. Currently we keep on working actively to develop the favorable conditions for the entrepreneurship incentives as the grounds of the investment climate in Russia.

Assistance in progress of medium and small business in Russia is recognized officially as one of the key priorities of social and economical policy of the state. This guideline is set at the level of the Russian leaders to implement the reforms. Special attention is paid to support of small business in Russia engaged in the high-end sectors. The matter also involves elimination of the obstacles preventing from efficient implementation of the intellectual activity results, financing of the events covering incentives of the Russia small business innovative activity in the regions, establishment of the innovative center Skolkovo, etc.

For the first time the state support of medium and small entrepreneurship in Russia assumed a scheduled and systemized character covering not only the general solutions but also the separate branch sectors.

The Government Commission for Development of Medium and small Business of Russia headed by Igor Shuvalov the First Vice-Premier is responsible for supervision of the government work related to development of medium and small business in Russia.

By now the process building up the background legislative base for medium and small entrepreneurship development has been completed.

One of the key events related to progress of business in Russia is implementation of the Regulatory Control Assessment of the legal acts and their drafts (RCA). At present RCA is used to assess the federal legislative base. And the Russian government plans to use this system to assess the acts with a view to the potential administrative barriers preventing from conducting small business in Russia both at the state and regional levels.

In 2009-2010 in Russia we observe increase in the tools and volumes used to support the subjects of medium and small entrepreneurship under the Governmental Financial Program for SME Assistance (since 2005 financial support has been increased by 16 times and it was equal to 24 milliard RUR in 2010).

In 2010 OJSC SME Bank (former Russian Bank of Development) kept on implementation of the improved program for financial support (crediting) of medium and small business in Russia, which had been launched in June 2009.

Assistance in jobs’ maintenance together with self-employment of the unemployed citizens suggested by the Russia Ministry for Economic Development (financing of the regional budgets to implement the corresponding projects) was intensified due to the various grants assigned by the Ministry for Public Health and Development of Russia.

Under the work covering maintenance of the demands for the products suggested by the medium and small companies the existing legislation related to participation of the SMEs in the purchases for the state and municipal needs was amended.

In 2009 and 2010 the priority areas covering implementation of the state policy for progress of medium and small entrepreneurship in the Russian Federation included also detection and complex reduction in the administrative barrier, improvement of the taxation system, extension of the property support, involvement of small business into the state (municipal) order system, improvement of businessmen informing level covering the support tools (formation of a uniform information system related to SME progress), etc.

The short-term and long-term key vectors of the state policy for development of medium and small business in Russia are below:

improvement of the legislative base considering the law enforcement practice, which was developed to amend the Federal Law from July 24, 2007 “About Development of Medium and Small Entrepreneurship in the Russian Federation”;
maintenance of the works covering public supervision of the state measures implemented in the regions, which are related to development of medium and small business in Russia;
extension of the support areas and of the programs and projects for SME development and implementation of the SME progress policy elements in the strategy for development of cluster, migration policy, etc;
provision with the public discussions (monitoring) of the established institutions and tools set for SME support as well as the new legislative incentives at every stage of their development (implementation);
high-level coordination of the business and authority efforts including the ministries for development and implementation of the urgent measures to support small business in Russia including the innovations, etc.