Entrepreneurship and Investment

Investment portrait of the city of Stavropol

Department of entrepreneurship and investment is a branch of Economic Development and Trade Committee. Key objectives of the department are:

Preparation and realization of measures on the development of entrepreneurship within the city.
Organizing work of Public Expert Advisory Committee on the support of small-scale entrepreneurship by the head of the City of Stavropol.
Organizing work on stimulating investment processes, establishing control over implementation of investment projects obtaining grants from budgetary funds of the city.
Participation in organizing public city activities.
Creation of a single informational space on the issues of entrepreneurship development for the City of Stavropol.

Within the framework of implementation of municipal target program of small business support in the City of Stavropol for 2005-2008:

1. The priority directions of the small-scale entrepreneurship development in the city of Stavropol were determined:

production of competitive export oriented goods by local manufacturers;
ecology clean production;
innovative entrepreneurship;
rendering services in the sphere of housing-municipal economy;
production of children’s food goods;
production of import substituting goods;
development of local infrastructure for small business.

These priorities have been confirmed by the Decree of Head of the City of Stavropol.

2. Were implemented:

2.1. The investment projects competition for providing grants for a partial payment of interest rate on the bank credit to the amount of 3/4 refinancing interest rate of the Central Bank of the Russian Federation. The winners of the competition for 2006 are:

Private Enterprise “Statsenko I.M.”
“Orpheus” LTD Company
Transport enterprise “Kamazovets” LTD

2.2. According to the Decree №2078 from 28.06.2006 of the Head of the City of Stavropol “About holding a competition “The best city enterprise” 25 enterprises took part in the competition. On the 14th of December 2006 the meeting of the Jury took place for the selection of the winners.

The winners of the competition “The best city enterprise” were announced: Enterprises with a number of workers more than 100 people:

Open JSC “Avtopritsep-Kamaz”
Open JSC “Dairy factory “Stavropolsky”
Open JSC “Stavropolproektstroy”
Open JSC Transport enterprise “Stavropolskoe-2”

The following enterprises won the title “City economy leader”:
Enterprises with a number of workers more than 100 people:

Federal State Unitary Enterprise “Stavropolskaya Biofabrika”
JSC “Bread-baking factory №3”
Open JSC “Stavropolstroy”

Small-scale business projects:

“S.Ovin” Company LTD (in the group “Small business projects producing industrial and technical products and non-food consumer goods”);
“Mys Dobroi Nadezhdy” Company LTD (in the group “Small business projects applied to processing branch”);
Scientific-industrial enterprise LTD “Pulse+” (in the group “Small innovative enterprises”);
JSC Construction Administration -1“Stavropolgrazhdanspetsstroy” (in the group “Small business projects making construction and repair works”)

The following enterprises were announced the leaders of the municipal economy:

JSC “Yuzhstalkonstruktsiya” (in the group “Small business projects producing industrial and technical products and non-food consumer goods”);
Scientific-industrial enterprise LTD “Ekobitech+”(in the group “Small innovative enterprises”);
JSC “Khutorok” ( in the group “Small business projects making construction works”)
“Kamazovets” Company LTD (in the group “Small business projects making transportation of cargoes)

Contact information: room 12, 87, K.Marx av, Stavropol, Russia, tel: 26-98-71

Information about implementation process of the municipal target program of small business support in the City of Stavropol for 2006.

Small business development is a part of an overall strategy of the city economic development in accordance with the Socio-economic development Plan of the City of Stavropol for the period up to 2008.

By the decision №139 from 24.12.2004 of Stavropol City Duma the municipal target program of small business support in the City of Stavropol for 2005-2008 was confirmed.

The program was developed on the analysis basis of small business state in the city in view of the state support of small business in the Russian Federation, proposals of governmental bodies, organizations and communities supporting small business.

The program is a comprehensive plan of activities aiming at creation of favourable conditions for small business and includes the following directions:

Increasing effectiveness of existing small enterprises and creation of new projects, providing micro crediting, organizing investment competitions, personnel training, consulting, marketing, auditing and informational provision of small business projects;
Perfection of administrative and legislative base for ensuring support, development and stable activity of small business in the city;
Development of credit-financial support of small business, making easier an access of small business projects to financial resources;
Development of municipal support system of small business;
Solving employment problems;
Increasing taxes receipts to budgets at all levels.

The aim of the program is ensuring favourable conditions for the development of small business on the basis of small business support at local government level.

The objectives of the program are:

creation of legislative, economic and organizational conditions for efficient and stable development of small business in the area of the City of Stavropol;
investment support of small business in all priority directions;
сcreation of municipal system of property and information support of small business;
creation of conditions for economic growth and budgets receipts at all levels using flexible credits, municipal order, and providing consultative, educational and legal support by the infrastructure of small business support;
solving the problem of employment.

According to the activities of the program a Public expert advisory Council on small business support was formed by the head of the city of Stavropol.

The Council is a collegiate body working in co-operation with Regional bodies of Stavropol Krai, local authorities of the City of Stavropol, individual employers, public organizations and associations. The Council is composed of representatives of local authorities, small business, credit institutions and public organizations.

The Council carries out its activities on public basis, it has the following tasks:

Formation of basic infrastructure of small business support in the area of the city;
Determination of priority directions in small business development of the city;
Working out a system of benefits for small business to initiate its work in priority directions;
Working out proposals to involve the youth into business activities;
Creation of business incubator and techno park of innovative enterprises;
Coordination of different structures activities on small business support issues;
Consideration and assessment of applications for the participation in investment projects competitions;
Participation in working out and realization of municipal programs of small business support.

In 2005 the Council considered issues which could affect the economic and social results of the activities of small business projects, in particular:

1. The Council determined priority directions of small business development of the city which were confirmed by the Decree of the Head of Stavropol City Administration №2555 from 05.08.2005 “About confirmation of priority directions of small business development in the City of Stavropol”. The priorities were defined in accordance with the Socio-economic development Plan of the city, industrial potential assessment and capacity of local commodity and services market as well. The following priority directions of small business development of the city were determined:

manufacturing of locally-made competitive export products;
ecology clean production;
innovative entrepreneurship;
rendering services in the sphere of housing and communal economy;
children’s food output;
manufacturing import substituting products;
formation of small business development infrastructure;

2. The Council worked out an order of granting budgetary subsidies for small business projects implementing investment projects with the help of bank credits. This order was confirmed by the Decree № 2150 from 05.07.2005 of the Head of the City of Stavropol “About confirmation of the order of small business projects subsidizing at the expense of the municipal budgetary funds. The criteria for investment projects selections were: a term of budgetary repayment, a quantity of budgetary efficiency for a period of project implementation and social significance of a project.

3. In accordance with the activities of the program of small business support the investment projects competition was held in 2007. 7 enterprises took part in the competition. As a result, three participants got budgetary subsidies for a two-year period. The total sum of the attracted enterprises investments was 43 500 000 roubles, the sum of subsidies from budgetary funds - 1278, 5 thousand roubles. After the realization of investment projects the increase of taxes in the amount of 398,107 thousand rоubles to the city budget is expected.

4. Federal laws № 131-FL from 06.10.2003 “About common principles of organizing local self-government in the Russian Federation” and № 95-FL from 29.07.2004 “About alterations in the 1st and 2nd part of the Tax Code of the Russian Federation and acknowledging lost power some legal regulations of the Russian Federation about taxes and charges”, № 101-FL from 21.07.2005 “About alterations in chapters 26.2 and 26.3 of part II of the Tax Code of the Russian Federation and some legal regulations of the Russian Federation about taxes and charges and acknowledging lost power some regulations of the Russian Federation” determined that the representative body of local authorities (Stavropol City Duma) had to come to a decision from 1st January 2006 to impose taxation system in the form of a single profit tax for some kinds of activities on the territory of the municipality and to determine the kinds of entrepreneurship activities for imposing a single profit tax in range of a list from the article 346.26 of chapter 26.3 of part II of the Tax Code of the Russian Federation, and the correcting coefficient of base profitability K2. The Council initiated imposing a single profit tax. As a result, the number of K2 was calculated for 2006 year and the project of the Stavropol City Duma’s resolution “About imposing taxation system in the form of a single profit tax for some kinds of business activities on the territory of the City of Stavropol” was prepared. The issues of calculating these numbers were discussed with participation of municipality representatives, taxation bodies and representatives of commodity and services market. They were calculated for every kind of activity separately.

5. The competition “The best enterprise of the city” has been held for real support and moral stimulating of the enterprises for 9 years already. This competition gives a chance to make up a rating system of enterprises for an exact determination of priorities for their investment support.

In 2005 by the initiative of the Council one more nomination was added to the competition –“Small innovative business”.

Selection of the competitions’ winners is made according to characteristics of the economic activities of the enterprises, their financial state and social significance for the city.

There are two criteria for winners’ selection. On the one hand, the best enterprises are selected from the point of view of their economic successes and investing attractiveness; on the other hand, the most important social factors are taken into account, such as, rate of wages, creation of new jobs, charity costs, for example: help to invalids, families with low incomes and sport teams.

The competition experience of last years shows that enterprises increase a level of business activity, renovate funds and produce new goods, increase investment activities and export volume.

The working plan of the Council for 2006 is made up of the issues which are not less important than the issues of 2005 year:

from 1st January 2006 the sum of land tax and leasing is calculated according to cadastral land assessment; new numbers of K2 for calculation of single profit tax were made. These factors will influence economic conditions of small business projects. The council with expert groups will analyze land tax rate and single profit tax rate for some kinds of activities and in case of necessity will make its proposals at the meeting of Stavropol City Duma;
a system of benefits is being worked out for enterprises working on priority directions;
to expand financial and credit possibilities the Council is going to make proposals on establishing leasing mechanism into a small business crediting system;
due to inefficient work of the structures providing for accommodation and public utilities and a reform of municipal economy the Council is going to make proposals for small business involvement into this field;

The program of small business support consists of some sections.

According to the section “Development of infrastructure of small business support”:

the information base about basic personnel agencies and professional development centres is being created; the proposals on their participation in the youth involvement into business activities are being worked out;
questionnaires are being held in higher and specialized professional educational establishments to reveal priority directions in youth business development;
professional availability for individual and business activities of the unemployed is being revealed. 500 people were consulted in 2006;
professional training of the unemployed is being carried out for their work in the field of business activity. 215 unemployed people were trained last year;
consultations on preparation constituent documents are being held. 460 people were given consultations in 2006;
financial support is provided for people who want to start their own business.27 unemployed people were provided for a financial support.

According to the section “Basic personnel training and retraining for small business”:

social adaptation for market economy conditions and increasing competitiveness of the unemployed was carried out for 280 people who wanted to start their own business according to the program “New start”; 21 people were tested on special psychological methods;
taking into consideration the changes in labour market the population is trained to the basis of business activities and self-employment in such professions as manager, hairdresser, cutter, manicurist, pedicurist.

According to the section “Organizational, regulatory and legislative supply of small business” municipal property which is used inefficiently is revealed. Such kind of property is included into Municipal property privatization forward plan and is to privatize. In the framework of creating the Mortgage fund of the City of Stavropol a state registration of municipal property right to 30 objects of real estate was made. Today 10 objects of property are in the process of registration their right to municipal property; according to the municipal property privatization forward plan of the City of Stavropol for 2006, Municipal Property managing committee conducted 3 auctions on property objects sale.