The Federal Law №313-FZ of 03.08.2018 introduces amendments to the Federal Law «On development of small and medium-sized businesses in the Russian Federation».

With effect of 1 December 2018 restrictions on a limited share (49%) of foreign legal entities in the authorized capital of small and medium-sized enterprises (SMEs) are removed. This means that companies with foreign shareholding of any size will be able to get the status of a small- or medium-sized company and count on state support.

It refers to foreign legal entities related to small and medium-sized enterprises which are not registered in offshore zones. The procedure for identification of foreign legal entities as the SMEs is also defined by the aforementioned law: Certified Public Accountants are authorized to make a conclusion about meeting the criteria of a SME based on legally defined criteria – average number of employees and annual turnover.

Certified Public Accountants should submit to the Unified Register of Small and Medium-sized Enterprises*, on a yearly basis, the names of limited liability companies with foreign shareholders, which fit the criteria of a SME enterprise.

*The listing of companies in the Unified Register of Small and Medium-sized Enterprises (launched in 2016) is automatically based on data filed at the Unified State Register of Legal Entities (EGRUL) and the Unified State Register of Individual Entrepreneurs (EGRIP). It includes also data provided by SMEs and IPs about their average number of employees in the preceding year, income records and other information. As of 10.09.2018, 5.921.987 entities employing over 16 million citizens are entered in the Register of Small and Medium-sized Enterprises which is maintained by the Federal Tax Service of Russia.

The Law also specifies the procedure regulating the annual inclusion of information on joint stock companies in the Unified register of SMEs on the basis of data received from share registrars.  Business partnerships can now be also classified as SMEs.  The Law also empowers the Federal Corporation for Development of Small and Medium Enterprises to provide information, marketing, financial and legal support of SMEs and individuals intending to start business in Russia.

An effective way to prevent the risks of cooperation with an unreliable business partner including also the SMEs is the use of such services as the Information and Analytical system Globas®, https://globas.credinform.ru/en-GB/home/auth which can assist in credit risk assessment of Russian counterparties including also from the SME sector.

Source: Credinform Russia