20.05.08

At a meeting in Kremlin, Dmitry Medvedev explained what measures are needed to simplify the lives of small businesses and to stimulate people to entrepreneurship. According to the Decree being prepared by the President’s administration, the number of unscheduled inspections would be limited to one in three years. Every inspection will have to be authorized by the regional Public Prosecutor's office. Businesses complain that officials initiate unscheduled inspections on whims.

Other proposed changes include replacing company licensing with obligatory liability insurance and allowing business to register by simply notifying the government of their existence.

Small businesses would also receive privileges on purchasing the property the lease. Often small grocery stores and drugstores disappear because large companies buy the property for offices and banks. The draft would allow regional and municipal authorities to leave leased facilities in the possession of small business if the business's activity is "socially beneficial" for the location. The facility may remain leased or the business may buy it on installment payments.

These privileges for small business are offered in hope of returning benefits in the future. “I remind you that it is our goal to have 60-70 percent of the country’s active population engaged in business activity by 2020”, - announced Dmitry Medvedev.

According to statistics by Delovaya Rossia, right now approximately 17% of Russians work in the area of small and medium business. In the USA, for example, this number exceeds 40%, and in Japan – over 70%.

This is not a first time the government has attempted to stimulate entrepreneurial activity in Russia. An attempt to reduce bureaucracy and lessen administrative pressure on business was initiated in 2002. However, as some barriers were removed, new ones appeared as companies were required to obtain miscellaneous permissions, accreditations, and approvals.

Many agree that, instead of treating the symptoms only, the grounds by which state and municipal governments apply pressure to businesses must first be removed in order for reforms against bureaucracy and corruption to be effective.

Read More about Services from Alinga Consulting Group