Small technology companies will be able to receive benefits similar to IT companies

The Ministry of Digital Development proposed to make changes to the rules for accreditation of IT companies, which will expand the number of applicants for such status and tax and other preferences. The main innovations are the abolition of the criterion for verifying the share of income from IT activities for small technology companies (MTKs) under three years old and the ban on participation in the register of the few companies under foreign control that continue to operate in the Russian market. De facto, at the expense of foreign participants, MTC is included in the circle of recipients of state support for the IT industry for the sake of “technological sovereignty” projects that the White House expects from them.

The Ministry of Digital Development has prepared a draft government resolution changing the procedure for accreditation of IT companies in the Russian Federation (published on regulation.gov.ru). One of the proposals is to cancel the criterion for checking the share of income from IT activities for MTCs less than three years old – now for applicants for state accreditation it must exceed 30% of revenue. The explanatory note states the purpose of the changes is the need to develop and support startups with a minimum revenue indicator included in the MTK register.

It should be noted that in November 2023, the government approved the procedure for determining the MTC for an experiment in growing developers of scarce technologies. The Russian Federation lost access to many of them after the deterioration of relations with developed countries due to the military operation in Ukraine. Depending on the revenue for the previous year, MTK will be classified as startups with a minimum revenue indicator (up to 1 million rubles), “just” startups (1–300 million rubles), early-stage companies (300 million–2 billion rubles) or mature companies (RUB 2–4 billion). MTC will be taken into account in a special register for the sake of targeted government support.

So far, however, assistance to them has been focused mainly on simplifying access to existing support measures (see Kommersant, November 10, 2023). The document developed by the Ministry of Digital Development includes MTK among the recipients of state support measures for IT companies. The draft resolution is aimed at simplifying the IT accreditation procedure for MTK, the Ministry of Economy told Kommersant. “If the resolution is adopted, more than 17% of such companies can apply for the entire existing range of measures to support IT companies, the operator of which is the Ministry of Digital Development. 1,700 companies have already been assigned MTK status based on the results of an examination (in “trusted” centers, for example, in the Fund for Assistance to the Development of Small Innovative Enterprises in the Scientific and Technical Sphere.— “Kommersant”) or automatically – based on data from the Unified Register of final recipients of state support for innovation,” the department said.

Let us remind you that accredited IT companies receive a number of benefits. These are reduced rates for insurance premiums, zeroing out income tax, preferential mortgages for employees, deferments from military service and mobilization, etc. The head of Softline Venture Partners, Elena Volotovskaya, calls the initiative “high-quality and timely” and says that it will contribute both the development of the technology cluster and small businesses in general. “Simplification of accreditation procedures and the abolition of restrictive requirements, such as the share of income from IT activities, will help stimulate innovation, attract investment and improve conditions for the development of technology business,” says Vadim Yun, a member of the General Council of Business Russia, General Director of KRYON LLC.

The draft also introduces a requirement for the share of foreign participation in them at a level of no more than 50% (currently the register includes subsidiaries of Huawei, Samsung, etc.; see “Kommersant” of February 21) and reduces the depth of verification (from five to two quarters) as part of the procedure for confirming the average monthly salary level in companies applying for accreditation. The Russian IT business, according to Sergei Potapov, Deputy General Director of TIM FORS, sees in innovations “the state’s interest in stimulating the growth of the IT market through facilitating various types of control procedures.” According to the executive director of ARPP Domestic Soft, Renat Lashin, “the most important conditions for ensuring digital sovereignty are the conditions of ownership, management or control of the organization by Russian citizens and the absence of foreign control for public joint-stock companies.” However, whether the potential results of MTC’s work are worth the consequences of “cutting off” the few remaining foreign competitors from state support for IT subsidiaries, given the dependence of the Russian market on maintaining supplies of equipment, is unknown.

Venera Petrova, Oleg Sapozhkov