Business for everyone: how Moscow supports entrepreneurs
Every year Russian businessmen are becoming more active. They open hundreds of outlets, new cafes, restaurants, car repair workshops, veterinary clinics in Moscow.
Small and medium business is developing much better in the capital than in other regions. There are about 849 thousand small and medium-sized businesses in Moscow. This is about 13% of their total amount throughout the country.
Nowadays, 2.2 million Moscow residents are employed in small and medium-sized businesses. It constitutes about 30% of all working citizens. Over the past year, a record number of individual entrepreneurs (IE) was registered. As of July 1, there were more than 300 thousand IEs in the capital. Since 2010, this figure has increased by 71%.
Such growth was provided by the economy policy of the city. Entrepreneurs receive benefits and preferences, can count on financial assistance and study for free. The list of support measures is expanding all the time.
Choosing a suitable tax
Businessmen are able to choose the tax system to comply with. In Moscow, they can consider patent and simplified systems that allow entrepreneurs to save on the payment of other taxes.
The State Budgetary Institution "Moscow Small Business” have launched an online service that helps entrepreneurs to choose the tax system. It is enough to click "Choose the tax system” button and answer seven questions about your company. For example, how many employees you plan to hire, how much the average annual income is and if the main customers are individuals or legal entities. Based on this information, the service advices the optimal system, i.e. general, simplified, patent, or a single agricultural tax. In addition, the site contains the description of all systems.
Moscow Small Business portal advanced further in the development of online services, and launched the "Formation of a tax return on the simplified tax system” service. During a day, an online assistant prepares the necessary documents and sends them to entrepreneur's e-mail. In the future, the program will help to avoid mistakes when filling in the declaration.
The list of online services is constantly expanding. Now entrepreneurs can prepare documents for business registration, pick up premises, leave a guarantee application for a credit assistance fund, and use a business navigator without even leaving their home or office.
Leasing domestically-produced equipment: new subsidy
Moscow has increased the size of subsidies to industrial enterprises that acquire domestically-produced equipment. The share of reimbursable rental costs for leased Russian equipment increased from 25% to 35%. Moreover, the cost of paying interest on loan agreements for the purchase of equipment will be reimbursed in the amount of the key rate of the Central Bank of Russia, increased by 5%.
The list of equipment covered by the subsidy includes installations for local wastewater treatment plants and equipment for applying labels to finished products.
It is expected that such measures will encourage manufacturers to purchase domestically-produced equipment, allowing enterprises to comply with environmental safety requirements. It will also help to reduce the production of counterfeit industrial products.
Moscow entrepreneurs can count on financial assistance with participation in Russian and international congresses, exhibitions and fairs.
The maximum amount of the subsidy is 50% of the sum of expenses. However, the compensation cannot exceed 350 thousand rubles for events in Russia and 700 thousand rubles for overseas events. Businessmen can compensate the cost of registration, the rental of exhibition space, installation and stand equipment, including engineering services.
The Department of Science, Industrial Policy and Entrepreneurship determines the activities businessmen can receive compensation for. It posts information about them on its website.
In addition, there is a program for organizing collective stands at Russian and foreign exhibitions under "Made in Moscow” common brand. This allows businessmen to meet with buyers, investors and representatives of international companies, as well as to find new markets.
Easier to export: assistance in going global
Moscow ranks first among the Russian regions in terms of non-resource and non-energy exports of goods and services amounting to 25 billion US dollars. This is 18.7% of the national export for 2017.
However, it is often difficult for Moscow enterprises to export products due to the necessity of obtaining certificates, high costs for certification of goods, as well as transport logistics. Thus, new subsidies have been introduced in the capital to help exporting enterprises overcome these difficulties.
The amount of subsidies for certification and protection of intellectual property may not exceed 50% of the revenues from the sale of goods outside Russia. The transportation cost of each batch can be fully compensated, but the subsidy cannot exceed 20% of the batch value.
Moreover, the maximum amounts of subsidies for compensating costs were established. They are three million rubles for product certification, patenting and transportation, and 500 thousand rubles for management certification.
When selecting enterprises applying for subsidies, the government will take into account the average annual salary of employees, the ratio of tax deductions to the amount of the requested subsidy and the share of export earnings in the total revenue of the company.
Knowledge is power: free education
It is important for entrepreneurs to get not only financial support, but also informational one. Therefore, Moscow government has introduced a system of free training programs. Businessmen choose interesting and necessary areas on their own. For example, marketing, organization management, personal effectiveness, or new aspects in business legislation. You can learn the basics of doing your business on the intensive five-day "Startup MBM School” course. And those who have already decided to enter the foreign market can contact the Moscow School of Exporter. Its participants will know about customs operations, taxes, legislation and accounting in the field of foreign economy, tools for promoting products to world markets.
There are also free webinars on bidding and procurement procedures, seminars and trainings on marketing, sales, management and public procurement. "Hour of the Entrepreneur” program will educate you how to interact with supervisory authorities.
Free office: smart desks and capsules for recreation
A coworking network has been created for small companies and individual entrepreneurs. You can occupy up to three spaces free of charge there. The centers are equipped with everything you need: there are desks, chairs, internet and recreation zones.
One of the most modern coworkings is open in "Digital Business Space”. The office has a sound-absorbing booth for Internet calls and Skype meetings, smart tables with built-in Bluetooth speakers, USB ports, and wireless charging.
Modernization and re-equipment: industrial parks to assist entrepreneurs
There are 40 industrial complexes and 33 industrial parks in Moscow. Their residents develop and apply modern technologies in various fields, from the attempts to create the transport of the future to manufacturing footwear.
Entrepreneurs can get soft loans of up to 100 million rubles. They are offered by Moscow Fund for Industry and Entrepreneurship Support. Loan terms are up to five years at rates of 2% to 5% per annum.
City support measures for technical parks also include benefits for paying income tax, land tax and property tax, as well as reduction of land rent rates. As a result, the total tax burden on technical parks is lower compared to conventional enterprises, and the difference can reach 25%.
Moreover, a month ago a competition was launched in Moscow to subsidize technical parks. Subsidies will help to pay interest on loans for the creation, modernization, reconstruction, repair or technical re-equipment of enterprises. Technical parks with the largest territory, long period of work and with the greatest total amount of investments can become the winners of the competition. There are no restrictions on the number of subsidies. The amount of payment is determined on the basis of the key rate set by the Central Bank of the Russian Federation on the day of the decision to grant a subsidy. The only limit is that it cannot exceed 300 million rubles per year for one enterprise.
For several years now, Moscow has been subsidizing the expenses of industrial enterprises related to the payment of interest on loans, loans and parts of leasing payments for purchasing production equipment. Since 2012, 99 companies have won competitions and received 1.6 billion rubles from the city budget.
Please contact Russian Asian Business Union, if you are interested in doing business in Russia.
Information source: "Бизнес доступен каждому: столица расширяет меры поддержки предпринимателей”
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