Small Businesses

All in all there are some 18,000 small businesses in the Republic. The major part of them are operating in such sectors as trade, public catering, construction and industry. Small businesses produce 1/7 of the gross income of the Republic. They employ over 10% of economically active population.

The Decree of the President of the Republic of Tatarstan dated 24 March, 1995, "On Encouraging the Development of Entrepreneurship in the Republic of Tatarstan" has granted small businesses with a number of privileges: newly established small businesses engaged in material production, transport and communications are exempted from paying profits tax in the part allocated for the republican budget for the term of two years; the rates of the tax during the third and the fourth years have been decreased.

Tax incentives in the form of privileged profits tax rates are granted to banks providing credits to small businesses operating in priority fields of economic development of the Republic. The Decree also envisages the measures on simplifying the procedure of licensing the forms of activity of small businesses.

The Republic has set up a Fund for financial support to small businesses which is aimed at implementing the mechanism of privileged financing of shortand mediumterm investment projects.