TASS, February 28. The petrochemical industry's services, trade, special equipment are highest growth-rate small businesses in the Arctic. Over two last years some sectors almost doubled, read results of the Kontur.Focus studies, obtained by TASS. Those directions are popular, since the Arctic territories are hard to reach and due to the big undeveloped areas in the Russian Federation's Arctic Zone.

"The number of small businesses was growing in the Russian Federation's Arctic Zone over 2022-2023. Among those businesses the leaders in terms of growth are in the sectors like commercial equipment services, rental and maintenance of trucks and special equipment, petrochemical services, advertising, education, and other forms of trade," Kontur.Focus's expert Anton Yakovlev told TASS.

The big number of trade and logistics companies can be explained by the poor transport accessibility of certain territories in the Russian Arctic, which affects the availability of goods, and which explains the existing high demand for them. Consequently the demand for transport services, especially in cargo transportation, is only growing, he added.

According to the study's results, the growth rate of new companies in trade, depending on the region, has reached 72% over two years, and the biggest result was in the Krasnoyarsk Region. The commercial equipment service sector has grown by 85% in the Komi Region, trucks and special equipment's rental and maintenance - by 53% in the Arkhangelsk Region. The highest result in petrochemical and chemical services was registered in the Yamalo-Nenets Autonomous Region - by 44%.

Effective measures

Active business developments are impossible without state support. In most parts of the Arctic, the most popular incentives are tax incentives, reimbursement of expenses from the regional budget, reduced insurance premiums - 7.5% instead of 30%. Residency in the Russian Federation's Arctic Zone is one of the most popular measures with businesses in the Arkhangelsk Region. Almost 200 enterprises and entrepreneurs with new investment projects have become residents, the Regional Development Agency said. By using this mechanism, businesses can cut significantly payable taxes and insurance costs.

Year 2023 was a record year in terms of support for small and medium businesses in the Nenets Autonomous Region. The regional administration's press service told TASS, the businesses are mainly concentrated and conduct their activities in the capital - the only city in the region - Naryan-Mar. Every year, about 50 businesses reimburse part of their expenses from the regional budget. In 2023, the region planned more than 24 million rubles ($259,000) in subsidies and grants, which was twice as much as it was in 2021.

Among the most popular measures, among those provided by the My Business Center, Karelia's' businesses mentioned the assistance in placing on Russian and international marketplaces, standardization, certification and patenting of products and services, organization of training and presenting events, product promotion services, support for exporters and their re-focus on markets of friendly countries. In the Krasnoyarsk Region, young entrepreneurs under 25 years of age can receive grants in addition to the above-mentioned measures. "The grant's amount is up to 75% of the project's planned cost. For businesses working in the Arctic Zone - up to 1 million rubles ($10,700)," Roman Martynov of the Krasnoyarsk Region's Agency for the Development of Small and Medium Businesses told TASS.

Support recipients

In the Nenets Autonomous Region, financial support in the form of subsidies and grants from the regional budget is most often used by entrepreneurs in additional education for children, in entertainment and sports.

In Karelia, most applicants for financial support are manufacturing and other industries, trade, cargo transportation, the beauty industry and the tourist businesses. "As for residents of the Arctic (Zone), a quarter are involved in the tourism sector, then follow popular areas - the social sphere and services, the construction industry and development. Noteworthy, in the new economic conditions, the interest in the Karelian Arctic has increased, entrepreneurs from other regions more often eye it as a location for their projects," Karelia's economic development authority told TASS. According to the Kontur.Focus study's results, among small businesses the largest growth over two years was shown by the other trade industry - 56.51%, from 784 companies in 2022 to 1,227 companies in early 2024, the catering sector - from 371 companies to 460, in the tourism and leisure industry - from 439 to 534.

According to the Komi Region's government, the most effective support measures are reduced taxes and preferential credit guarantees and the leasing support - they are mostly of demand among companies working in construction, trade, and transport. Since early 2022, commercial equipment companies have doubled in Komi, those in building materials - have grown by 12% to 149, and in the other trade industry by 63% - from 1,019 to 1,661 companies, Kontur. Focus said.