The Ministry of Economic Development has introduced to the government a bill on the status of social entrepreneurship, Kommersant newspaper reports. In December 2016, it was proposed to extend this status to small and medium-sized businesses where 30% of employees are physically challenged, single parents, supporters of big families, people raised in orphanages, or former convicts. The current revision tightens the criteria: the share of such employees necessary for inclusion in the social entrepreneurship category has been raised to 50%.

Kommersant advises that Maxim Oreshkin, Head of the Ministry of Economic Development, has sent Prime Minister Dmitry Medvedev a bill defining social entrepreneurship.

The bill, approved by the Ministry of Finance and other ministries, contains clearer terms and is aligned with the Labour Code, but makes the criteria for social entrepreneurship more stringent. In the previous revision, it was proposed to attribute an enterprise to the social entrepreneurship class if 30% of its employees were physically handicapped, single parents (with children under 14 years old), supporters of big families, senior citizens, people under the age of 21 raised in orphanages, or former convicts. The new revision raises the bar to 50%. Yet their share in the payroll fund remains the same: at least 25%.

A company may be considered social if it helps people in a difficult situation in such areas as healthcare, physical education and mass sports, preschool education, children’s hobby groups, social tourism, cultural and educational activities, with the share of income from such activities amounting to 70%. The document stipulates assistance rendered by state bodies to social entrepreneurship entities: they may create a support infrastructure, providing premises on preferential terms, access to franchise banks, and educational programmes. In addition, social entrepreneurs will be able to rent state and municipal property without bids or auctions.

The bill also specifies that information about social entrepreneurship entities will be entered on the unified register of SMEs kept by the Federal Tax Service since August 1, 2016. According to Maxim Parshin, Head of the SME Development Department of the Ministry of Economic Development, the project should remove “information, property, and organizational barriers to development of small and medium-sized enterprises operating in the field of social entrepreneurship.”

This is not the first attempt by the Ministry to develop such a document: it is envisaged in the roadmap, approved in June 2016 by the government, for providing non-governmental organizations with access to social services. In the summer of 2016, the Ministry published the first draft of the document (see “Kommersant” edition of August 15, 2016). Yet, after the public discussion and subsequent criticism, the Ministry had to rework most of it. The Ministry of Economic Development submitted the next revision of the bill for approval in late December 2016.