New set of measures to support business

Speaking at a meeting with the Government of the RF on April 15, the President of Russia offered a number of new measures to support business in conditions of the coronavirus epidemic.

The Government of the RF and the Central Bank of the RF are instructed to develop and implement of the following measures:

  • Companies trading with non-food items should be included in the list of the most affected sectors (more than 600 000 operating specialized retailing companies - according toGlobas System.
  • Small and medium-sized enterprises should be provided with a free assistance from the state for the payment of salaries in April-May in the amount of 12 100 rubles per employee. The condition for receiving of such support should be the retaining of at least 90% of the authorized staff size as of April 1.
  • The State development corporation VEB.RF should provide guarantees of at least 75% of the volume of loans for the payment of salaries.
  • Soft loans should be offered to systemically important enterprises for working capital financing. Loan rates should be subsidized by the state in the amount of the Central Bank's key rate. 50% of the loan should be secured by state guarantees of the Ministry of Finance of the RF.
  • The List of systemically important enterprises should be completed. The choice of companies for inclusion in the List should be based on intelligible, clear and objective criteria, as a result of which the List should include organizations that are extremely important for the national economy as a whole.
  • Aviation companies should be provided with support in the amount of more than 23 billion rubles (more than 1300 operating companies - according to Globas System.
  • Separate support measures should be developed for each of the basic main sectors of the economy. To ensure the sustainability and balance of regional budgets, it should be provided the allocation of 200 billion rubles.
Changes in legislation

Addressing to the citizens on April 8, 2020, the President of Russia proposed additional measures to support business.

        1. Extend the deferral of payment of insurance premiums to social funds for affected small and medium-sized business for 6 months.

        2. Allow to pay tax arrears monthly in equal installments for at least a year after the end of the deferment.

        3. To instruct the Government of the Russian Federation to prepare, within 5 days, a program of additional business support with the condition of providing priority assistance to companies that have retained the employment.

Earlier, as a part of measures to support the economy and business, the State Duma of the Russian Federation adopted the Federal Law of 03.04.2020 No. 106-FL “On Amending the Federal Law “On the Central Bank of the Russian Federation (Bank of Russia)”and certain legislative acts of the Russian Federation regarding the peculiarities of changing the terms of a loan agreement” or the so-called “Law on credit holidays".

According to the law, citizens and individual entrepreneurs, as well as small and medium-sized enterprises affected by the coronavirus pandemic, are entitled to credit holidays. The benefit will be valid for 6 months, provided that income is reduced by 30% compared with the average income for 2019. Applications for the benefit are to be applied until September 30. Borrowers are entitled to repay a loan ahead of schedule at any time during the grace period.

The following is not allowed during the grace period:

  • charging a penalty, fine or interest;
  • requests for advanced fulfillment of obligations;
  • foreclosure on collateral or mortgages, as well as claims against the guarantor.

Small and medium-sized enterprises of the sectors most affected by the epidemic, can lot upon credit holidays. The list of these industries is entrusted to be submitted to the Government of the Russian Federation.

In addition, the Government of the Russian Federation prepared the Decree No. 439 of April 03, 2020, concerning measures to support tenants and lessors.

This Decree establishes the conditions for obtaining a deferral of rent under real estate lease agreements. The parties are allowed to agree on holidays or reduction in rent, as well as on other changes to the agreements that do not worsen their situation in comparison with the conditions provided by this Decree.

This applies to real estate owned by state, municipal and private property, except for residential premises.

The effect of the Decree applies to legal entities and individual entrepreneurs whose contracts are valid in 2020 and were concluded before the introduction of the high-alert mode or state of emergency in the region, and if they are included in the List of sectors of the Russian economy that were most affected by the worsening situation as a result of the spread of COVID-19.

Installments are valid until 01.10.2020 starting from the date of the introduction of high-alert mode and state of emergency under the following conditions:

  • rent arrears must be paid noе earlier than January 1, 2021 and noе later than January 1, 2023 no more than once a month, in equal installments, the amount of which does not exceed a half of the monthly rent under the lease;
  • installment is provided for the duration of the high-alert mode or state of emergency in the territory of the subject in the amount of rent for the corresponding period in the amount of 50% of the rent for the corresponding period from the date of termination of the high-alert mode or state of emergency in the territory of the subject of the Russian Federation until October 1, 2020;
  • fines, interest for use of another's money or other measures of responsibility in connection with the tenant's failure to comply with the procedure and deadlines for paying the rent (including if such measures are provided for by the lease agreement) in connection with the delay;
  • no additional fee for granting deferral from the tenant.

The Decree contains a reference to the need for supporting measures provision to the lessors having granted a deferral. A list of these measures is likely to be further developed by the Government.