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Karelian government developed an extensive package of support measures for local businesses and investors

On January 18, 2018, during its regular session, the Government of the Republic of Karelia introduced an extensive package of support measures for small and medium-sized enterprises and investors, developed by the order of the current Governor Artur Parfenchikov. Parfenchikov charged the government with the task of stimulating regional economy development through fostering business and investment activities.

These unprecedented support measures are based on data analysis, business community requests, and best investment practices in various regions of the Russian Federation.

According to the Minister of Industry and Economic Development Dmitry Rodionov, acting as a deputy Prime Minister of the Republic of Karelia, a government-appointed working group drafted a number of laws and regulations aimed at developing small and medium-sized enterprises, improving investment climate, and decreasing the unemployment rate. Proposed measures imply both material and financial support for local businesses.

One of the examples of potential material support is permitting small and medium-sized enterprises to use state-owned property regarded as unclaimed during privatization tenders and auctions for implementing investment projects without any compensation. According to Dmitry Rodionov, the recent audit revealed 10 such pieces of property. He has also pointed out that this measure of support has been successfully used in the Murmansk and Novosibirsk regions.

The list of financial support measures includes granting subsidies to small and medium-size production and craftwork enterprises for purchasing necessary equipment (this measure so long awaited by the regions of Karelia has been successfully implemented in the Moscow Region); allocating subsidies partially compensating the costs of building or reconstructing roadside service facilities (this measure has been introduced in Buryatia); and providing partial compensation for the costs of building or reconstructing guest houses (this measure has been successfully implemented in the Leningrad region).

Artur Parfenchikov noted that such subsidies are primarily aimed at developing remote tourist destinations.

Subsidies for building guest houses can amount to as much as 3 million rubles.

Granting subsidies for the voluntary certification schemes has also been proposed as an effective measure of promoting local products.

"Six years ago, the Vologda region introduced the system of voluntary certification which enables local manufacturers to carry out laboratory testing of their products to secure an appropriate quality mark. This system has worked very successfully and contributed greatly to the quality and competitiveness growth of the local products," Dmitry Rodionov told.

Proposed measures are aimed not only at supporting existing business sectors, but also at developing fundamentally new types of business activity in the Republic of Karelia. For example, the Government has drafted a bill aimed at developing biopharmaceutical industry and providing state support for biopharmaceutical companies.

According to Dmitry Rodionov, investment projects in this sector can be implemented on so-called "territories of advanced socio-economic development" and other investment territories.

Establishing special terms for granting microloans (with the interest rate of 6.8% for loans ranging from 100 to 750 thousand rubles) to small and medium-size enterprises through a republican microcredit organization is expected to effectively support entrepreneurs in monotowns.

After the discussion, Artur Parfenchikov instructed the Karelian government to thoroughly review the bills with the Parliament members and local entrepreneurs before passing them to the Legislative Assembly of the Republic of Karelia, and to reach the consensus on the proposed measures.

"Our main task is to attract investors, because the level of investments is the key indicator of economic development or stagnation. Investment operations have a positive impact on all the spheres of life, that's why we all should collaborate in this domain," Artur Parfenchikov said.

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Created: January 18, 2018. Last updated: January 18, 2018.
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