Business support measures during the COVID-19 pandemic

Business support measures due to coronavirus

The government has compiled a list of areas that have been hit hardest by the coronavirus pandemic

Air transportation, airport activities, trucking

Culture, organization of leisure and entertainment

Fitness activities and sports

Activities of travel agencies and other organizations providing tourism services

Hotel business

Catering

Activities of continuing education organizations, non-governmental educational institutions

Organization of conferences and exhibitions

Activities for the provision of domestic services to the population (repair, washing, dry cleaning, hairdressing and beauty salons)

Check whether a company belongs to an affected industry according to OKVED code on the Tax Service website

Support measures

Interest-free loans for paying salaries

Banks will issue loans to SMEs from the list of affected industries for salary payments at 0%. First of all, interest-free loans will be available at Sberbank, VTB, SME Bank, Promsvyazbank, Gazprombank, Alfa Bank, and Otkritie Bank.

The loan amount is calculated by the formula = number of employees * minimum wage in the region * number of months of lending.

Loans will be given to companies with a business life of more than one year. The maximum loan term is 1 year. In this case, for the first 6 months, the rate will be 0%, and then increase to 4%.

Deferred rental payment for real estate

The most affected sectors of the economy will be able to get a deferment. According to the “anti-crisis” law, the owner of the premises is obliged to conclude an additional agreement with a lessee on the deferral of payment of rent within 30 days after the lessee applies. The main condition for using this support measure: the agreement must have been signed before the introduction of high alert or emergency.

At the suggestion of the Ministry of Economic Development, while high alert / emergency situations are in place lessees are completely exempt from paying property rents. After the cancellation of special regimes, lessees will be able to pay only 50% of the rent before October 1. Tenants will be able to pay the remaining rent arrears during the period 2021-2023 on an equal monthly basis. Payment of utility bills by the lessee remains unchanged.

Insurance contribution rates

All small and medium-sized businesses (SMEs) will now pay reduced insurance contribution rates. From that part of the salary that exceeds the minimum wage (160 in 2020) you need to pay 15%. Up to the amount of the minimum wage, the rate remains the same – 30%. Fixed contributions for individual entrepreneurs remain unchanged.

Check whether your company is considered SME on the Tax Service website. The criteria can be found at website.

For reference

At the federal level, the minimum wage in Russia is 160. Constituent entities of the Russian Federation are entitled to establish their own minimum wage.

SME support measures adopted by Moscow City Government during the COVID-19 pandemic

City for business – three packages of measures

Moscow kept all of the previously approved benefits for local companies. In addition to the federal measures, the city has promptly coordinated with businesses and approved three packages of municipal support measures for companies hard-hit by the pandemic.

The first package was adopted on March, 24th to delay the payment of sales and other taxes by public catering, travel, culture, sports and entertainment companies as well as hotels. Rent deferrals were approved for the companies that rent municipal property and had to close their businesses due to the pandemic.

The second package was adopted on March, 31th extended the list of companies that have been granted sales and other tax deferrals and rental deferral for the second quarter. Subsidies were approved for small and medium-sized companies, exporters and franchisees, as well as easy taxes for startups.

The third package of support measures, approved on April, 15th expanded loan support and the assistance to developers, hotels, cinemas, supplementary education facilities, health centres, social entrepreneurs and small businesses that plan to buy out the rented municipal property.

The anti-crisis measures have directly helped nearly 35,000 companies with over 765,000 personnel. Support has also been provided to nearly 30,000 medics and more than 6.2 million city residents. Accumulated support to businesses has risen to over approx. $ 1,4 billion, and another approx. $ 1,9 billion have been earmarked for social support and healthcare.

Moscow measures

The Moscow Government has lifted property taxes and land payments from those property owners in the trade, services, public catering and hotel industries who agree to lower rent by at least 50% (the decrease must be at least twice as large as the sum of the tax reimbursement). In this way, the city has simultaneously supported rental businesses and companies that have rented premises for hotels, offices and shops.

As of 5th of March 2020 and until the emergency regime is lifted, companies can defer payments under trading contracts at non-permanent retail facilities located in recreation parks, museum estates and open-air museums, the Moscow Zoo and other similar places.

Lending and subsidies:

Subsidies to SMEs in order to reimburse part of the costs associated with the promotion of goods of their own production.

Subsidies to credit organizations providing loans at a reduced interest rate to SMEs.

Economic support measures up to 6% per year on a loan received before April 15, 2020 and 8% per year on a loan received from April, 15, 2020.

Financial support to organizations and entrepreneurs engaged in innovation, in the field of innovation support, in the manufacturing sector, selling products outside the Russian Federation.

Subsidies to SMEs that are operating under commercial concession (sub concession) agreements, in order to reimburse part of the interest rate paying, the purchase of equipment and utility bills, and also leasing payments.

Advertising in online marketplaces

The Moscow Government’s list of anti-crisis measures has been complemented with new subsidies, including one for online advertising of goods and services and online food delivery services. Businesses can get back up to 50% of the commission charged by the aggregator.

The payment can reach $ 8900. The list of approved marketplaces is being constantly updated at businesses’ request. It currently has 16 largest online platforms and food delivery services.

Rent

Organizations that are leasing land and non-residential properties from the city of Moscow are exempt from rental payments.

Postponement of rent in the construction industry.

Mandatory Payments and Taxation

Extension of the deadline for advance payments on corporate property tax and land tax.

Grants for property owners

Moscow authorities have formed a procedure for the payment of grants to owners of commercial real estate. The city will allocate $ 197 million. Funds can be used to compensate property and land payments.

Owners of retail and commercial premises will receive an anti-crisis grant if the rental rate is at least halved for the entire duration of the coronavirus restrictions to their tenants – shops, catering facilities and consumer services.

Owners of hotels will be reimbursed property tax and land payments for the second quarter of 2020 if they reduce their rental rate by at least 50 percent.

Cashback for exporters

A list of measures to support Moscow exporters has also been expanded. Expenses related to selling goods, services and intellectual deliverables abroad can be reimbursed, as well as money spent on adapting products to introduce them to the international market. This subsidy allows for compensating up to 100 percent of expenses. The list also includes the reimbursement of expenses on receiving patents, certifying products or management systems and the delivery of goods abroad. The maximum payment is $ 38 thousand (3 million rubles).

In addition, Moscow has adopted a new grant for entrepreneurs who sell goods and services abroad; the grant will amount to 10 percent of the completed export contract.

Innovative companies

Participants of the Moscow Innovation Cluster are provided with subsidies for engineering activities. Companies can offset up to 50 percent of costs incurred since 1st January 2018 to create or upgrade a product and expand production. The payments can be used to reimburse the expenses for the development of electronic 3D-models of products, technical design, technological and design documentation, production of prototypes, development of a program and test procedure, creation of equipment prototypes as well as the purchase and installation of test stands and installations that are involved in production.

Payments to the engineering sector

The list of engineering subsidies recipients has also been expanded and now includes members of innovation clusters in Moscow registered one year before the application is submitted. In the previous list, the required registration period was no less than three years.

The subsidy will compensate for up to 50 percent of expenses for developing design documents, prototypes and equipment (no more than $ 641 thousand (50 million rubles).

Subsidies for enterprises during COVID-19

There are 14 types of payments for small and medium-sized businesses in Moscow during pandemic.

Subsidy for engineering allows to compensate the funds spent from 1st January 2020 to create a new product or modernization of existing production expansion.

Subsidy for organizations working in the sphere of sports, culture, leisure, education to reimburse utility costs, payment of credit interest, leasing or purchase of equipment.

Subsidy for social enterprises for reimbursement of utility costs, payment of credit interest, leasing or purchasing equipment.

Subsidy for residents of technoparks and members of the Moscow Innovation Cluster compensates costs of paying loan interest, leasing or purchasing equipment from its own resources.

Subsidy for participation in exhibitions will compensate the costs of the registration fee, building a stand or renting exhibition space for participation in events that took place from 1st January 2019 before the application was submitted.

Subsidy for promoting goods through food delivery services allows to reimburse up to 50 percent of the commission paid to aggregators for product placement.

Subsidy for personnel training applies to employees in all specialties included in the All-Russian classifier of specialties.

Program of concessional lending to small and medium-sized businesses enables entrepreneurs to receive loans at a rate of up to 7% per annum.

Subsidy for the promotion of goods through marketplaces is intended to partially compensate the placement commission.

Subsidy for hotel industry to reimbursement of utility bills, payment of credit interest, leasing or purchase of equipment.

Grant for the implementation of an innovative project for members of the Moscow Innovation Cluster in the acquisition, construction, reconstruction or overhaul of a property, purchase of equipment or rights to intellectual property results, implementation or maintenance of software.

Subsidy for the export of goods, services or intellectual property enables small and medium-sized businesses to reimburse the costs of obtaining patents, certification of products or management systems, adaptation to entering the international market and transportation abroad.

Subsidy for franchisees can be used by companies that operate under a commercial concession or sub-concession agreement as well as licensing and sub-license agreements. It allows to compensate costs of utilities, leasing or purchase of equipment, payment of interest on a loan to support and develop the franchisee’s activities as well as remuneration to the copyright holder.

Subsidy for commercial coworking spaces for the placement of service center for business that provides for reimbursement of the costs of creating and equipping a service center, purchasing and installing equipment, and paying utility costs.

The Government of Moscow has also developed a set of social support measures in order to help residents who lose their jobs because of the coronavirus. In particular, a regional compensation payment to the unemployed residents of Moscow was introduced. The total amount of unemployment benefits and new payments is by $ 256 (19,500 rubles) per month. The payment is assigned automatically, without application forms. Such payments can be received by Muscovites who lost their jobs this year and worked for at least 60 calendar days.

Can be useful

About protection of small and medium businesses here.

About regulatory framework here.

Federal support measures

The Russian government has developed measures to support business during the COVID-19 pandemic

Lending and subsidies

The program for expanding refinancing in relation to credit organizations for loans to SMEs.

SMEs and individuals can apply for credit holidays up to six months until September 30.

Mandatory Payments and Taxation

Decrease in acquiring fees for the online sale of goods.

Reduce the size of insurance premiums for citizens working in small and medium enterprises from 30% to 15%.

Extending the deadlines for 6 months for paying taxes and advance payments for taxes (excluding VAT), including the deadlines for paying taxes, provided by special tax regimes, operating in the most affected sectors.

Other measures

Coronavirus infection caused by 2019-NCOV is a force majeure event (Opinion of the Ministry of Finance of Russia).

Introduced a moratorium on bankruptcy of certain categories of enterprises and entrepreneurs.

Suspension of tax audits.