Late last month President of the Russian Federation Vladimir Putin signed Federal Law No. 245-FZ On Amendments to the Federal Law On the Development of Small and Medium-sized Entrepreneurship in the Russian Federation dated 26 July 2019. The law defines the terms social entrepreneurship and social enterprise, which led the media to dub it the Law on Social Entrepreneurship.
As the name suggests, Law No. 245-FZ legally establishes the concepts of social entrepreneurship and social enterprise (hereinafter SE). Logically, this lays the foundation for the development of future regulations. In part, federal terrotires will have the opportunity to acknowledge social enterprises as such and provide them with special support, including through financing (together with municipalities).
The law is clearly aimed at supporting indicated categories of citizens (the disabled, retirees, ex-convicts, orphans, et cetera along those lines), certain sociocultural spheres, small and medium-sized enterprises (SMEs), and those employed in these spheres.
Is this law important? When it comes to supporting indicated groups and associated SMEs absolutely, yes. Is it enough that this federal law was passed? Absolutely not.
In the next publication we will discuss three possible outcomes of the implementation of this law. In this series of articles, we will answer the questions posed above and get a glimpse of the new epoch towards which the world is heading, especially in relation to impact investing.
Material prepared by:
Investment Commissioner of the Government of the Kaliningrad Region under the Government of the Russian Federation in Moscow