New measures of government support for small businesses

The amendments to the Law on development of small and medium-sized enterprises were introduced in accordance with the Federal Law №245-FL of 26 July 2019. The changes approved the concept of social enterprise and social entrepreneurship. Such enterprises should focus their activities on useful public purposes and assist in the settlement of social problems.

The legislative amendments provide the possibility of government support for such enterprises. To get the support, the enterprises must meet a number of conditions below:

• to ensure the employment of those who are in need of social security, including:
  - disabled people;
  - single parents and parents with many minor children, including disabled children; ;
  - holders of pension and citizens at the pre-retirement age;
  - children's home graduates under the age of 23;
  - persons released from places of deprivation of liberty and persons with valid criminal record;
  - refugees and internal refugees;
  - low-income citizens;
  - persons with no fixed abode and occupation;
• to ensure the sale of products, works and services, produced by persons above; ;
• to produce the goods, works and services, intended for persons above. For example, in the fields of consumer services, medicine and psychology, education and pedagogy;
• to carry out activities in the social sphere, including:
  - family strengthening services;
  - the services of children recreation organization;
  - pre-school, general and supplementary education services for children;
  - services of private cultural and educational institutions, such as: museums, theatres, libraries, archives, studio schools, creative workshops;
  - services for the development of interaction between the peoples of Russia and the preservation of cultural heritage;
  - publication of educational, scientific and cultural literature.

In addition, to get the status of social enterprise, the company should meet the mandatory requirements for:

• the number of employees from the above categories;
• the share of expenses on labour remuneration;
• the share of income from the above activities;
• the share of net profit from the activity for the previous calendar year.

For example, the government support for social enterprises can be provided in the form of: subsidies or state and municipal property granted on special terms; assistance in searching for business partners; vocational training of employees.

The status of social enterprise will be reflected in the Register of small and medium-sized enterprises on the base of corresponding list annually transferred to the authorized bodies by the regional authorities.

The status of social enterprise can be obtained by legal entities as well as by individual entrepreneurs.