Federation Council committee proposes to ban rent increases for small and medium-sized businesses

The Federation Council Committee on Economic Policy proposes, in the context of sanctions, to impose a moratorium on rent increases for small and medium-sized businesses (SMEs), when it comes to state-owned land and offices. The materials of the letter addressed to the Minister of Economic Development Maxim Reshetnikov, signed by the head of the Federation Council committee on economic policy Andrei Kutepov, publishes TASS.

Andrey Kutepov noted that in the face of sanctions pressure, many SMEs are significantly reducing their net profit and base for business development. According to him, this is due to an increase in the cost of production due to an increase in the cost of purchasing raw materials, materials and components.

“In cases where business is conducted on leased premises, an additional negative impact on its stability is the increase in rent. Tenants can have especially strong consequences if the terms of the contract provide for an increase in rent by the amount of the inflation rate,” he specified.

When renting state property based on the results of tenders, if the agreement provides for an annual unilateral review of the rental rate, this condition is mandatory when agreeing on transactions with the lessor. It is impossible to cancel this condition, Mr. Kutepov added, even by agreement of the parties.

In January, the Bank of Russia presented a roadmap for supporting SMEs for 2023–2024. It included 38 measures in eight areas, in particular, the “map” provides for the use of lower risk ratios for assets, as well as the optimization of the credit risk assessment process. According to the regulator, these measures should encourage banks to work with small businesses.

For more information about the development of the financial market for the needs of SMEs, see Kommersant’s article “Small Businesses Shuffled the Card.”

Milena Kostereva