Restrictions on foreigners’ participation in small business may be lifted

By: GAAP-IFRS.COM

Photo: smallbusinesssurvivalguide.com

Restrictions on participation of foreign investors in capital of small Russian companies may be lifted. The Ministry for Economic Development is working on such possibility today. Representatives of the ministry explain that there isn’t any final decision yet, but “in principle”, there is an approach ready.

Today even a smallest entity in Russia where total aggregate interest of the government, foreign investors and foreign legal entities exceeds 25% loses its status of a small business entity and can no longer enjoy all the privileges provided by the legislation.

A representative of the All-Russia public organization for small and medium entrepreneurship (“OPORA”) Eugeny Yakubovsky told “Russian Newspaper” that they had many times called for lifting restrictions on participation of foreign investors in capital of small entities. “Apparently, this makes joint entities non-competitive in respect to entities without foreign capital”, - he explained.

As a result, the expert says that the country’s economy loses significant share of foreign investments into small companies’ segment, together with jobs and the opportunity to receive great experience of “best global practices” in organization and management of small businesses, including innovative ones. “Obviously, if the government today indeed aims at a qualitative leap in development of small entrepreneurship and significant increase of its share in the national economy, then there’s no place for such restrictions in the legislation”, - he concluded.

Source: Russian Newspaper