Draft law on social entrepreneurship

The Federation Council has submitted a draft law to the State Duma on the development of social entrepreneurship

Moscow, 24.07.2015

Senators Lyudmila Bokova and Galina Karelova and State Duma Deputy Rafael Mardanshin presented a draft law in the lower house of parliament on measures to support social enterprises. The document also establishes legal provisions for and legislative regulation of their activities.

The draft law introduces amendments to the Federal Law “On the development of small and medium sized enterprises in the Russian Federation”. The document’s authors propose giving the Russian authorities the right to approve lists of social enterprises and introducing special measures of state support. Amongst the proposed measures are the creation of special infrastructure to support social entrepreneurship; the provision of financial, property, information and advisory assistance; and support in training employees.

The authors of the draft law point out that grants to support social entrepreneurship are virtually never requested in Russia, primarily due to the lack of a legal definition of social entrepreneurship and, as a result, the lack of legal regulation of this type of business activity and a system of state support at regional level.

As the authors of the document note, a lack of financial resources is one of the major constraints on the development of social entrepreneurship projects which employ the socially disadvantaged and provide a wide range of social services, thus making a significant contribution to improving the quality of life of Russians.

Existing measures to support small and medium sized enterprises are designed for ordinary businesses and not suitable for social enterprises, which are by definition low-margin, states the President of the Russian Union of Industrialists and Entrepreneurs Aleksandr Shokhin. Experts say that support is especially important at the initial stage, when funding and premises are required.

Following the incorporation of social entrepreneurs into the legal framework, the state can actively transfer its social responsibilities to them, which will provide budgetary savings, believes the director of the “Social Projects” Agency for Strategic Initiatives Vladimir Yablonski. Currently only 1% of all small and medium businesses are social enterprises. Yablonski is certain that improvements to infrastructure over a period of five years would result in a threefold increase in the number of social entrepreneurs. The Agency for Strategic Initiatives estimates that 500,000 jobs could be created over five years, according to the newspaper Vedomosti.

The amendments to the law “On the development of small and medium enterprises” will be reviewed in autumn and may be adopted before the end of the year, reports the news agency “Moscow” citing Chair of the State Duma Committee on Economic Policy, Innovation and Entrepreneurship Аnatoly Aksakov.

Author: Yulia Vyatkina


Get involved

Share This