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National Entrepreneurs’ Forum Small Business – National Idea?

January 20, 2016, Moscow

Vladimir Putin took part in the plenary session of the National Entrepreneurs’ Forum Small Business – National Idea? The forum examined issues such as support for small and medium-sized enterprises and measures to encourage business activity.

The forum, organised by the OPORA Russia national public association of small and medium-sized enterprises, is taking place in Moscow on January 19–20. It brings together businesspeople and officials from relevant ministries and agencies to discuss issues such as reducing bureaucratic pressure on private companies, improving tax legislation, and encouraging people to get into business.

Speech at plenary session of National Entrepreneurs’ Forum Small Business – National Idea?

President of Russia Vladimir Putin: Good afternoon, friends,

Let me begin by congratulating you all on the recent New Year holiday and wishing you success and all the very best. We all need you to succeed; you need to succeed, and Russia wants you to succeed.

This forum’s very name holds great significance. We often say that small and medium-sized enterprises are and should be the real foundation for our country’s economic development.

The last two years were quite difficult for the economy and nearly all economic sectors encountered objective problems. Overall though, business has pulled through, including small business. I was talking with some of your colleagues on the way here just before, and they say that circumstances such as the exchange rate difference and new openings on various markets have even created some new opportunities.

The positive trend is clearest in the services sector. The number of registered small businesses increased by 2.9 percent in 2015, and the number of self-employed entrepreneurs was up by 3.7 percent.

We have modest earnings growth. Production companies in the small business sector saw their earnings rise by 8 percent, for example, in January-September 2015, compared to the same period in 2014. The figure was up by 4.5 percent over the same period for the wholesale sector.

Of course, we do need to make every possible effort to maintain stability in the small business sector and ensure that temporary limitations, whether economic or budgetary, do not prevent a growing number of educated people with a modern outlook and sense of initiative from entering this sector.

We will certainly continue to put in place the mechanisms that will let us move forward, in particular, the Corporation for Development of Small and Medium Business. It brings together under one roof all kinds of business support instruments: financial support, legal assistance, information and marketing support. It will become a kind of headquarters for people engaged in small and medium business, providing them with solutions to the issues and problems that arise.

The country’s regions also have new possibilities for supporting business. Laws have been passed that allow the regions to offer tax holidays to newly registered self-employed entrepreneurs. The two-year zero tax rate is a big support for people opening their own business in the services sector, production, social sector, or science and research.

The regions can also now lower the tax rate from 6 percent to 1 percent for businesses working under the simplified taxation system. Thirty-nine regions have already made use of this possibility, and 81 regions have already introduced tax holidays.

Unfortunately however, we know that far from all regions see small and medium business development as a priority. Last week, at a meeting with businesspeople organised by the Agency for Strategic Initiatives, we discussed the idea of establishing project offices in the regions to spread best practice in doing business. These examples of best practice are decided based on the results of the National rating of investment climate in Russia’s regions.

I hope too that this kind of promising new approach will at least enable us to organise better cooperation between the authorities and businesspeople. Implementation of your proposals and ideas will be the first test for evaluating these offices’ work.

OPORA Russia, as an association representing business interests and with an extensive network of offices throughout the country, should, of course, work most actively in the regions and be more persistent and productive in its efforts at the regional level. For our part, we will do everything we can to support these efforts, because it is you, the businesspeople, who must become generators of ideas that answer our current needs and help business to resolve the problems it faces.

You need to work together with the regions and the local teams to identify areas where business can make the biggest contribution, establish specialised training programmes and achieve concrete results. Only then can we achieve a quality breakthrough in this area.

Your forum is already into its second day of work. I am sure that you can put forward plenty of useful, consolidated proposals. I promise you that I will do all I can to ensure that the regional authorities and government bodies react positively to your ideas and make use of your ideas, really put them into practice. We need this to happen because we all need your economic success. It is crucial for our country’s life in general, for resolving our social and domestic political problems and for our standing in the international arena.

I wish you success. Thank you very much.

January 20, 2016, Moscow