Annual review of Small & Medium Enterprise Register

In July tax authorities perform their annual review of Small and Medium-Sized Enterprise Register (the SME Register). Companies included in the SME Register are entitled to a wide range of preferences, e.g. the reduced social contributions rate – 15% vs 30%. Companies with a predominant foreign participation will stay in the SME Register only if an auditor submits the required information about them to the tax authorities from 1 to 5 July 2024. The following eligibility criteria are applied to a Russian company:

• revenue does not exceed 2 billion rubles per year
• average number of employees a year does not exceed 250 people.

A foreign shareholder owning more than 49% of the Russian legal entity should also meet these criteria and not be registered in an offshore zone. We bring to your attention that the list of offshore zones has been significantly expanded effective January 01, 2024, and currently features European Union countries, the United Kingdom, the United States, Japan, etc.

The fact that a foreign shareholder complies with the requirements should be confirmed by an auditor. So we recommend Russian companies to prepare in advance the respective documentation, incl. financial statements of the foreign shareholder for 2023.

Bellerage consultants and auditors will gladly assist you with checking if your company is eligible for the SME Register and/or verifying the foreign shareholder's statements.