Putin announces additional measures to help business
On April 15, 2020, the Russian President announced additional measures to support businesses and regions during the COVID-19 pandemic before the regular meeting with the Cabinet.
- Small and medium enterprises will be provided with free aid from the state—RUB 12,130 for each employee under the condition that at least 90% of the staff has been maintained on April 1st. The funds will be used to pay salaries for April and May 2020. The payments will not start before May 18 for the April support and in June for the May support.
- The list of the most affected industries was expanded to companies trading non-food goods.
- Provide at least 75% of the volume of salary in loans with guarantees from the Russian development bank.
- Provide a new special loan product for systemically important enterprises – a loan for working capital replenishment. The rate will be subsidized by the state at the key rate of the Central Bank – 6%. Half of the loan will be provided by state guarantees from the Ministry of Finance.
- The list of system-relevant enterprises should be completed on the basis of “distinct, clear, objective criteria.” That means that it should contain enterprises that are extremely important for the entire national economy.
- Aviation companies will be supported directly with RUB 23 billion.
- For all of the basis sectors of the economy, separate support measures should be developed.
- The regional budgets will be supported by the federal government with RUB 200 billion to ensure sustainability and balance of the regional budgets.
In order to understand if a business is entitled to the new (and existing) benefits, it must fall into one of the 3 following categories:
- Companies that are considered to be important for the Russian economy, as per list established by the government (currently 646) (https://www.interfax.ru/sistemoobrazuyuchieorgangizatisii.html)
- Companies that are operating in a branch heavily affected by the current crisis as per order of the government 409, dated 02.04.2020.
- Companies registered as small and medium enterprises (Federal Law of July 24, 2007 N 209-ФЗ).
- Small or medium means not more then 100 (small)/100-250 (medium) employees and not more than RUB 800 mn (small)/2 bn (medium) revenue for the previous year.
- In addition, any shareholder that is not itself an SME must not hold more then 49% of an SME (applies for both domestic and foreign companies), the maximum participation for a state owned company must not be more then 25%, applicable for both small and medium SME’s.
- Criteria for micro SME exists, however is not covered here.
- SME must be registered as of March 1, 2020 to be considered for this support
From the current perspective, if a company does not fall under these parameters, no additional support is foreseen. The shifted deadlines for reporting for the first quarter are applicable for all companies.
The federal government allocated RUB 300 bn to the anti-crisis fund that will be accessible to national and foreign companies.