Small Business

Small business is entrepreneurship based on the activities of small independent firms, small enterprises.

In recent years, the term small and medium-sized enterprises has been used more often. Small and medium-sized enterprises are commercial organizations whose performance indicators do not exceed legally established thresholds.

Small and medium-sized businesses create a significant number of jobs in areas with low capital intensity and play a significant social role in society.

In other countries

In Japan and some European countries, the term "small and medium-sized enterprises" is used to define small businesses. The OECD's charter states that enterprises employing no more than 19 people are considered very small, and between 20 and 100 people are considered small. If a company employs a minimum of 100 people, a maximum of 499 people is a medium-sized enterprise. A large enterprise is considered if it employs more than 500 people. In the European Union, micro, small and medium-sized enterprises are referred to as "small and medium-sized enterprises"

In the early 1970s, the EU began to develop a national system of support and regulation for small and medium-sized businesses, and small businesses began to develop in the 1980s. Small businesses are now helping to boost employment growth in Europe.

In Denmark, the Netherlands, the Czech Republic, France, Estonia, Switzerland, Austria, small businesses are provided with special conditions for guarantees for startups, in Belgium, Poland, Slovakia, Finland, Italy, Germany, the Netherlands - loan guarantees for small and medium-sized businesses. A number of countries provide state co-financing, tax breaks, deferred payments, and interest rate subsidies. There are banks that specialize in lending to small and medium-sized businesses.

There are significant differences between countries of the world in determining the criteria for small and medium-sized businesses, so a direct comparison of their role in the economy is limited.

There is the European Charter for Small and Medium-Sized Enterprises, its provisions are included in the Multi-Year Programme for Small and Medium-Sized Enterprises, thanks to which some projects have been implemented. In Europe, the development of small and medium-sized businesses takes place at two levels: at the national level and with the help of programs that are implemented under the auspices of the EC. There is the Eureka program, which was created to support innovative projects. Each country that is part of the EU has national systems to support the development of small innovative entrepreneurship.

Based on the results of the analysis of foreign measures to support SMEs in the context of the spread of coronavirus infection, it can be concluded that the measures applied abroad are quite diverse. For example, in Asian countries such as China, Japan, and the Republic of Korea, emphasis is placed on the mechanism of concessional lending to SMEs, as well as on the exemption of small and medium-sized businesses from loan obligations, while in the countries of the European Union, emphasis is placed on the exemption of SMEs from tax liabilities, as well as on financial assistance and subsidies.

France

In France, small and medium-sized enterprises are well developed. The country has a tax credit for innovative and research activities, and lending to small and medium-sized businesses is being stimulated. The state policy of the country is aimed at developing small business and reducing the unemployment rate.

Switzerland
In Switzerland, the Directorate for Territorial Development, which is part of the Swiss State Secretariat for Economic Affairs, is responsible for the formulation and implementation of government policies to support small and medium-sized enterprises. To finance small and medium-sized businesses, the country has mortgage loans, venture capital funds, and banks. In many regions, there are development agencies that help small and medium-sized enterprises develop. In Switzerland, there can be a full exemption from income tax for 10 years. Small and medium-sized businesses can take advantage of preferential lendin.

Spain
The Spanish authorities have imposed a six-month moratorium on taxes for small and medium-sized businesses and the self-employed. Companies have a 75% reduction in their social security contributions. At the same time, organizations that employ less than 50 employees are completely exempt from this contribution

Germany
Self-employed persons and entrepreneurs with employees of up to five people received emergency financial assistance in the total amount of up to 14 thousand euros. For organizations with up to ten employees, up to 15 thousand euros were allocated from the federal budget. In addition, the Federal Government has allocated €40 billion for the self-employed and small firms (approximately €10 billion) in the form of direct subsidies to one-person enterprises and microenterprises, and €30 billion in the form of soft loans.

Great Britain

Amongthe measures to support small and medium-sized businesses, the UK government should highlight the organization of payments to self-employed people who have suffered losses during the pandemic, a taxable grant in the amount of 80% of their average monthly profit over the past three years (but not more than £2,500 per month). In this way, the government covers the same amount of income for a self-employed person as for laid-off employees, who also receive an 80% grant. At the same time, these grants are subject to tax, which must be entered in the tax return by January 2022

Japan

The State has developed a mechanism for concessional lending to SMEs. Special conditions have been established for lending to small and medium-sized businesses: in the first three years, the interest rate is reduced by 0.9% (for organizations whose sales have decreased by more than 5%), as well as a special system of subsidized interest payments for those who have taken advantage of special lending (for small businesses - a reduction in sales by more than 15%, for medium-sized businesses - a reduction in sales by more than 20%). The deferred payment period can be up to five years

China
2013: Tax breaks for small businesses are introduced as a stimulus measure. Since August 1, 2013, value-added tax and turnover tax have been frozen for small businesses whose monthly sales do not exceed 20,3 yuan (approximately 3,6 US dollars). The government estimates that more than 32 million small businesses will benefit from these benefits, increasing incomes and increasing employment for millions of Chinese. The new incentive measures also provide for the simplification of customs clearance procedures, the reduction of operating fees and the facilitation of exports for small and medium-sized private enterprises. Small and medium-sized businesses are exempt from paying taxes for up to three months, and the repayment of interest on loans has also been postponed. The requirements for credit institutions in terms of reserve requirements have been reduced in order to increase liquidity in the country

USA
Structure of non-white and medium-sized businesses in the USA:

The middle market segment is usually divided into three segments:

• companies with the lowest turnover (they are closer to small businesses);
• companies competing in the middle segment (annual turnover from 20 to 500 million dollars);
• companies with the highest annual turnover (getting closer to large businesses).
In the United States of America, small and medium-sized enterprises can also be called “small business.”