Matryoshka dolls stuffed with technology

The White House summed up the first results of the implementation of the initially export-oriented business climate transformation plan (BCP) after the mechanism was updated in 2020. 100 of the 122 actions of the plan have been completed, with a focus on “urgent” issues of corporate governance (due to the departure of foreign shareholders), export support (due to the loss of sales markets) and the acceleration of industrial construction (for import substitution). In 2023, the priority is the development of technological entrepreneurship and the adaptation of corporate legislation. Thus, the Russian Federation may allow the creation of “matryoshka” companies, the fight against which was launched after a series of scandals with an opaque ownership structure and their use for tax optimization.

The government has summed up the results of the “Business Climate Transformation” mechanism, a plan of 184 measures designed to improve the working conditions of companies and attract investment. Initially, the TDK plan was a mechanism for promoting the Russian Federation in the Doing Business rating in order to attract, among other things, foreign capital. In 2020, the Russian authorities refused to participate in the rating due to the irrelevance of the DB methodology and changed the mechanism, dividing it into separate “road maps” (“Corporate governance, CAP, bankruptcy, valuation”, “Reengineering of industrial construction rules”, “Export of goods and Services”, “Intellectual Property” and “New Types of Entrepreneurship”) under the supervision of representatives of departments and businesses. At the same time, general management was raised to the level of First Deputy Prime Minister Andrei Belousov.

According to the head of the Ministry of Economy Maxim Reshetnikov, in 2022, the implementation period came for 122 activities of the plan, 100 were completed. 24 events) and exports (79%, 31). Their relevance is due to the withdrawal of foreign shareholders from the assets, the loss of former sales markets, as well as the need to launch import substitution through foreign exchange relaxations, tax liberalization in special administrative districts and accelerate the construction of industrial facilities.

In 2023, the White House will focus on the development of new types of entrepreneurship (plan completed by 78%) and intellectual property issues (91%) for the sake of “technological sovereignty.” The plan is to launch technology transfer centers to commercialize the results of intellectual activity (experts also propose developing engineering education through postgraduate studies in technology entrepreneurship and a network of student design bureaus).

The most difficult, however, is the implementation of the “corporate block” – the search for a balance of interests of business (weakening control to work under sanctions) and the state (primarily preserving tax revenues). In particular, business is seeking to lift the ban on the existence of “matryoshka” companies – the ability of one legal entity to own 100% of the shares of another, which owns 100% of the third, and so on. Recall that a broad “anti-matryoshka” campaign in the Russian Federation was launched in the 2010s after a series of scandals with “ring” schemes of legal entities with each other, including the intrigue around Domodedovo Airport, when the Prosecutor General’s Office failed to unravel the ownership scheme (see. “Kommersant” dated May 24, 2011), and a number of tax schemes (in the “ring” where company A owns company B, company B owns company C, and that company A again, it is impossible to establish a profit center). In practice, however, companies still use this mechanism to circumvent sanctions (for example, to purchase imported equipment), but a formal ban makes it difficult for businesses to adapt to restrictions. The authorities are ready for concessions, but they are afraid of abuses – evading subsidiary liability and paying taxes by delegating responsibility within the “matryoshka”.

Another request of the business is to expand support for imports within the framework of the “export” map of the TDK: export opportunities themselves largely depend on the supply of components and raw materials. Mr. Belousov did not support this idea, noting the sufficiency of existing measures (parallel imports, zeroing of customs duties, lists of critical imports). At the same time, the export map will still be adjusted, the plans include more accentuated support for exports, taking into account the development of transport and logistics corridors (see Kommersant of October 28 and November 18).

In 2023, due to the political cycle and the upcoming elections, expert groups are promised a more intensive mode of work: updated road maps in five areas must be submitted in the first quarter, and legislative changes must be adopted in the spring session of the State Duma. In parallel, the groups will work on improving law enforcement practice.

Diana Galieva, Oleg Sapozhkov