SME register to be updated monthly
Amendments to the law on the development of SMEs
The President of Russia has signed Law No. 349-FZ dated October 27, 2020 amending Law No. 209-FZ On the Development of Small and Medium Enterprises.
The amendments provide for:
- A monthly update of the Register of Small and Medium Enterprises (by the 10th of each month);
- The possibility for audit companies to submit every month information on the compliance of Russian companies with foreign capital with foreign participant criteria.
These changes will make it possible to include in the SME register the companies that meet the criteria for small business but did not manage to confirm foreign participant compliance from July 1 to July 5, 2020.
Foreign participant compliance with the following criteria is among the conditions for including Russian companies (OOO and AO) with foreign participation of over 49 % in the SME register:
- The income derived by the foreign participant from business activities should not exceed RUB 2 billion;
- The foreign participant’s average headcount should not exceed 250;
- The foreign participant must not be in an offshore zone.
Compliance of the foreign participant with the above criteria may be confirmed by an audit company after it has reviewed the participant’s books/financial reporting as well as other supporting documents. Audit companies report to tax authorities on the compliance of foreign participants with the abovementioned criteria.
The law becomes effective on November 07, 2020, and it should be possible to apply the new rules for SME register update and submission of information by audit companies already as early as December 2020. This means that some companies will be able to apply reduced social insurance contribution rates from January 2021.
For more information on how to be included in the SME register (including companies with foreign participation) and how much can be saved on social insurance contributions, please refer to our webinar Benefits for Small and Medium Enterprises. How to be Included in the SME Register.
Our tax consultants can help you find the best options for structuring your business from a tax standpoint while assessing the risks entailed.
The auditors Nordic Advisors can audit the financial statements of your organization and inform the Federal Tax Service that your organization can be included in the SME register if it meets the statutory requirements for such inclusion.