Custom-made industry research, company ratings, competitor analysis
According to the Federal Tax Service (hereinafter “FTS”) on July 1, 2019, there are 3,9 million active companies in Russia.
Summary analysis helped to create a portrait of the Russian companies and obtain an overall picture of the structure and dynamics of the economy, functioning of business environment, identify disadvantages and benefits of the current level of business community.
Details
Table 1. Portrait of operating companies in numbers, 2019
№ | Indicator | Value | Share | |
I | Legal form | Profit-making companies, including: | 3 243 thousand | 84% |
Limited liability companies (LLC) | 3 143 thousand | 97% | ||
Joint-stock companies (JSC) | 67 thousand | 2% | ||
Other profit-making companies | 33 thousand | 1% | ||
Non-profit organizations: | 622 thousand | 16% | ||
Institutions | 219 thousand | 35% | ||
Partnerships | 106 thousand | 17% | ||
Other non-profit organizations | 297 thousand | 48% | ||
II | Status | Active | 3 576 thousand | 92% |
In process of reorganization | 10 thousand | <1% | ||
In process of reorganization with subsequent liquidation | 13 thousand | <1% | ||
In process of being wound up | 294 thousand | 8% | ||
III | Region of registration | Moscow | 726 thousand | 19% |
Saint Petersburg | 298 thousand | 8% | ||
Moscow region | 201 thousand | 5% | ||
Other subjects | 2 640 thousand | 68% | ||
IV | Age | Up to 1 year | 313 thousand | 8% |
From 1 to 3 years | 664 thousand | 17% | ||
Up to 5 years | 566 thousand | 15% | ||
Over 5 years | 2 352 thousand | 60% | ||
V | Country of a shareholder-legal entity with a share exceeding 50% | Russia | 151 thousand | 85% |
Cyprus | 8 thousand | 4% | ||
Seychelles | 2 thousand | 1% | ||
Other countries | 17 thousand | 10% | ||
VI | Country of a shareholder-natural person with a share exceeding 50% | Russia | 2 414 thousand | 97% |
Other countries | 86 thousand | 3% | ||
VII | Category of operating companies, on July 2019 | Medium-sized enterprises | 18 thousand | 1% |
Small enterprises | 217 thousand | 6% | ||
Micro-enterprises | 2 529 thousand | 65% | ||
Others | 1 101 thousand | 28% | ||
VIII | Turnover by category of companies, 2018 | Major taxpayers | 127 trillion RUB | 68% |
Medium-sized enterprises | 7 trillion RUB | 4% | ||
Small enterprises | 29 trillion RUB | 15% | ||
Micro-enterprises | 24 trillion RUB | 13% | ||
IX | Increase (decrease) in turnover in 2018 compared to 2017 | Major taxpayers | +27% | - |
Medium-sized enterprises | +6% | - | ||
Small enterprises | +7% | - | ||
Micro-enterprises | +14% | - | ||
X | Financial result for 2018 | Share of profitable companies | 73% | - |
Share of loss-making companies | 27% | - | ||
XI | Receipt of taxes to the consolidated budget of Russia, 2018 | Mining | 7,8 trillion RUB | 37% |
Manufacturing | 3,5 trillion RUB | 16% | ||
Wholesale and retail trade | 2,1 trillion RUB | 10% | ||
Other activities | 7,7 trillion RUB | 37% | ||
XII | Solvency index Globas of active companies | Superior/High | 56 thousand | 2% |
Strong/Medium | 830 thousand | 24% | ||
Adequate/Weak | 1 174 thousand | 34% | ||
Unsatisfactory/Poor | 1 074 thousand | 31% | ||
Insufficient | 333 thousand | 9% |
Summary
One of the main risks of business in Russia is the forced exit to the shadow economy. High taxes and low profit margins force companies to artificially lower financial figures, use gray schemes, and attract shell companies.
Russian business, especially new established companies, suffer from a shortage of capital. Almost all profits go into turnover, which makes it impossible to expand. Loans are the only solution in this case, but interest rates for business are high, and loans are not available for start-ups.
An acute shortage of financing causes business instability. Lack of funds, competition, external negative factors can lead to losses and, ultimately, to the company's withdrawal from the market.
The undoubted advantage of Russian companies is their flexibility and adaptability. Domestic entrepreneurs quickly adapt to the external environment, which is obviously a positive effect from political and economic instability.
Light colors to the portrait are added by the idea of national projects that can stimulate economic growth and improve financial performance. The ambitious budget of national projects for 2019-2024 at total value of 25,7 trillion RUB will lead to a direct effect in the form of annual increase in GDP growth by 0,2% and up to 0,1% indirectly. At the same time, 60% of the expenditures are planned for updating the infrastructure.
In addition, there is hope for improvement in the investment climate due to the reduced threat of new sanctions, as well as strengthening of the ruble.
In our publication as of 27.05.2019 «Capital amnesty has been extended» it was informed that the third stage of «capital amnesty» was carried out.
Started from June 1, 2019 and until February 29, 2020 the citizens of Russia can declare foreign assets and accounts, get tax exemption on personal income and that one gained from controlled foreign companies, under the condition of legalization as tax residents of Russia. Relief from criminal liability is guaranteed by the amendments to the article 761 of the Criminal Code of the RF.
Addition to the note to the article 14.1 of the Administrative Offences Code of the RF (AOC) was made by the Federal Law as of July 18, 2019 №178-FL. According to the Law, persons that are applicants or those the information about can be found in special declarations filed on the third stage of «capital amnesty» are discharged from administrative liability.
It concerns declaration of actions or inactions related to:
During first and second phases of «capital amnesty» almost 19 thousand declarations were filed.