Individual Entrepreneur (IE) status or another form of commercial activity (e.g., Limited Liability Company, LLC), including obtaining social enterprise status
The primary purpose of activity for individual entrepreneurs and LLCs is the generation of profit through the sale of goods, works, services, or the commercial use of property. Even in the absence of employees, it is required to submit reports and maintain accounting records. Registration follows the general procedure through the tax authorities. When registering an LLC, the development of constituent documents is required.
In order to access additional support measures, entities have the opportunity to obtain the following statuses: subject of small and medium entrepreneurship, and social enterprise. Social entrepreneurship is defined as entrepreneurial activity aimed at achieving socially useful goals and contributing to the solution of social problems of citizens and society.
There are no special conditions for conducting commercial activities in the general order. The conditions for classification as a small or medium enterprise are laid down in Article 4 of Federal Law No. 209-FZ of July 24, 2007 on the Development of Small and Medium Enterprises in the Russian Federation, with limits set on the average number of workers and income. The conditions for inclusion in the category of small and medium enterprises carrying out activities in the sphere of social entrepreneurship are defined in Article 24.1 of the same law, with criteria including the provision of employment for certain categories of people and activity in a certain sphere.
The legal basis is provided by Part 1 of the Civil Code of the Russian Federation, Federal Law No. 209-FZ of July 24, 2007 on the Development of Small and Medium Enterprises in the Russian Federation, and Federal Law No. 14-FZ of February 8, 1998 on Limited Liability Companies.
Financial Support
All measures of financial support applicable to small and medium-sized businesses are available, including preferential microloans, guarantees under microloan contracts, and preferential rental of state and municipal property. Regional grants are provided to subjects of small and medium entrepreneurship and social enterprises in amounts ranging from 100,000 to 500,000 rubles, intended to cover costs associated with project implementation, on the condition of co-financing of at least 50% of the total project costs from the entity’s own funds.
Tax Relief
The general procedure for paying taxes applies, with the possibility of applying the Simplified Taxation System (STS). Under the STS, if the object of taxation is “income”, the rate is 6%. If the object of taxation is “income minus expenses”, the rate is 15%.
Social Security Contributions
Each year, individual entrepreneurs pay insurance contributions in a fixed amount for mandatory pension and medical insurance. If the income of the individual entrepreneur for the accounting period does not exceed 300,000 rubles, the fixed payment for pension insurance for 2021 amounts to 32,448 rubles. If income exceeds 300,000 rubles during the assessment period, the taxpayer must pay the fixed amount plus an additional 1% of the income exceeding 300,000 rubles. The insurance contributions for compulsory health insurance in a fixed amount for 2021 amount to 8,426 rubles.
Public Procurement
The general procedure for participation in public procurement under Federal Laws No. 223-FZ and No. 44-FZ applies. Preferences may be applied when participating in state orders, on the condition of being included in the Unified Register of Small and Medium Entrepreneurship, with a mandatory share of the order allocated to SMEs.
Educational and Informational Support
Educational and informational support is implemented at both the federal and regional levels. At the federal level, support is provided by the Federal Corporation for the Development of Small and Medium Entrepreneurship (corpmsp.ru). At the regional level, support is available through regional funds for entrepreneurship support. All available support measures can be explored through free consultations at “My Business” centers (mybiznes.rf).
Other Types of Support
Additional support resources are available through the official portal for the development of small and medium-sized businesses (smbn.ru). The infrastructure supporting small and medium-sized businesses includes regional guarantee organizations, a consulting infrastructure, and regional centers of competence. Further information is available at corpmsp.ru/org-infrastruktury-podderzhki.
