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Social and Economic development of the Republic of Karelia in 2009

  Public
  Administration


  Economic Policy

    Economic Policy

    Investment
    and Construction


    Small And Medium
    Enterprises


    Innovation Development

    Industrial Policy

    Agroindustrial Complex

    Services

    Natural Resources
    and Ecology


  Cooperation

  Results of 2009

State Support and Development of Small and Medium-Size Enterprises

Development of small and medium size enterprises is a priority direction of implementation of social and economic policy of the Government of the Republic of Karelia.

On results of the first subnational research Conducting Business in Russia - 2009 accomplished by the World Bank, the republic has won the third place on simplicity of conducting entrepreneurship and business activity.

Small and medium size business is playing the more and more important part in economy of the republic. In Karelia there are more than 4,000 microenterprises, 1273 small enterprises, more than 50 medium enterprises and 16,000 self-employed entrepreneurs. The number of subjects of small and medium business has reached 30 units per 1000 people of the population.

As initially estimated, in 2009 in the sphere of small and medium business it has been occupied more than 65 thousand people, the turnover of small enterprises (without microenterprises) has exceeded 30 billion roubles and compared to 2008 has grown by 22%.

The state policy of the Government of the Republic of Karelia in the field of development of business in 2009 has been directed on lowering of the tax burden for small and medium size enterprises, their property, information and consulting support, perfection of measures of financial support.

Ammendments were made to the tax laws of the Republic of Karelia providing since January 1, 2009 lowering of tax rates levied in connection with use of simplified tax system, and since January 1, 2010 - introduction of simplified tax system in territory of the republic on the basis of the patent for self-employed entrepreneurs.

The rate of the tax levied in connection with use of simplified tax system for all tax bearers is lowered from 15% to 12.5%. For organizations and self-employed entrepreneurs manufacturing products of national art crafts which or carrying out intercity passenger transportations the rate of the tax is lowered up to 5%. On the enterprises and businessmen, engaged in tourist activity, agricultural production, fish farming, processing of wood, beautification and gardening the rate is lowered to 10%. Lowering of the tax burden has allowed subjects of small and medium business to save financial assets that promoted preservation of workplaces and development of business as a whole.

For 2009 regarding property support of entrepreneurs for subjects of small and medium business there has been legislatively established the limiting value of the area intended for implementation of the right of priority to purchase, as well as the period of payment by installments for the repurchase of premises has been defined.

2009 there has been introdued a moratorium on increase of rent within the concluded state property rent contracts of the Republic of Karelia for subjects of small and medium business which remains in force in 2010.

In 2009 there has been made 148 decisions on conditions of privatization with the right of priority to repurchase. With legal persons there have been concluded 114 contracts of sale and purchase, including 87 contracts with payment by installments for purchased property. Besides, there have been concluded 61 contracts of sale and purchase of rented municipal real estate with self-employed entrepreneurs without forming a legal entity.

With a view of granting property support there have been aproved lists of the state and municipal property for lease to small and medium business. Total of number objects in lists is 343, total area makes 84,100 m2.

In 2009 Business Incubator of the Republic of Karelia worked successfully. Since its opening 44 subjects of small business with 137 employees have passed competitive selection there.

With a view of rendering additional support to the novice businessmen under conditions of the economic crisis the base rental rate per one square meter of the area of the Business Incubator is lowered to 300 roubles.

In 2009 the Regional program Development of small and medium business in the Republic of Karelia through 2014 has been adopted. Representatives of public organizations of businessmen, scientific environment and enforcement authorities participated in its development.

The total expenditure on financing of the Program makes 115,4 million roubles (2009-2014), including 38,5 million roubles of the budget of the Republic of Karelia for 2009.

The adopted Program reflects all directions of the support stipulated by the Federal law 209-FZ On development of small and medium business in the Russian Federation as of July 24, 2007, including support in the field of preparation, retrainings and improvement of professional skills of the staff of subjects of small and medium business, information, financial and property support.

To provide information support of entrepreneurship there continued information support of the Portal for small and medium business of the Republic of Karelia by which means there jas been organized the access to web-appendices of the information system The Register of Subjects of Small and Medium Business of the Republic of Karelia - Addressees of Support. 28,000 users from various regions of Russia have visited the site in 2009.

On November, 26 the second regional exhibition conference Small and Medium Business of the Republic of Karelia took place in Kondopoga; more than 250 entrepreneurs, associations of businessmen, representatives of executive and legislature, financial and credit and public organizations have taken part in it.

In 2009 there has been organized a free-of-charge "anti-recessionary" educational program Modern Technologies and Effective Solutions for Successful Business. The purpose of the program was actualization of available knowledge, increase of their level concerning conducting the entrepreneurship, efficiency of business. Training within the program was held for 211 entities of small business from 12 regions of republic, 169 entrepreneurs have taken advantage of the consulting services.

Special attention is paid to creation of conditions for implementation of innovative projects by subjects small and medium business, a number of seminars on this subject have been held, the manual on Protection of Results of Innovative Activity by Business Entities has been published.

The Government of Karelia continues work on cooperation with public associations of businessmen. The Cooperation agreement concerning development of business with the Chamber of Commerce and Industry of the Republic of Karelia and Karelian regional public organization League of Businessmen of the Republic of Karelia has been signed.

Attached to the Government there has been established the Council for support and development of small and medium business in the Republic of Karelia. Within a year there worked the Governmental commission for development of small and medium business.

In 2009 work was conducted for on perfection of mechanisms of financial support of business.

In total within a year to support of small and medium business it has been assigned 38,5 million roubles from the republican budget and 100,47 million roubles was involved from the federal budget.

In April, 2009 the Government of the Republic of Karelia has established the Guarantee Fund of the Republic of Karelia. For its formation from the republican and federal budgets it has been allocated 117,97 million roubles, including 30 million roubles of funds of the budget of the Republic of Karelia.

Currently Cooperation agreements with 6 banks are concluded. In 2009 by results of consideration of applications the Fund has concluded 21 Contracts of Guarantee amounting to 18,7 million roubles.

Subsidizing of the investment credit interest rates is another effective measure to support entrepreneurship.

Subsidies are granted amounting to 2/3 rates of refinancing of the Central bank of Russia in force on the date of the credit contract conclusion. The size of the credit should not exceed 10 million roubles. For implementation of the specified form of support in 2009 it has been assigned 10 million roubles of which means of the budget of the Republic of Karelia make 2 million roubles. 32 subjects of small and medium business of Petrozavodsk and regions of the republic were supported. The volume of involved credit resources has made 102,2 million rbl., the average credit rate has made 17%.

In 2009 there has been introduced a new direction of financial support of small business - extension of grants to the novice subjects of small business starting own business. The positive decision was made for 10 business-projects from Prionezhsky, Kondopoga, Kalevala, Pryazha regions and Petrozavodsk. The basic directions of activity are development of rural tourism, manufacture of log-houses and saunas, organization od wood-working shops, cargo transportations, services on organization of preschool development of children.

Measures taken should promote more active development of small and medium business in the republic.

Technical support
Created: April 23, 2010. Last updated: April 28, 2010.
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