““Narva support measures for Narva support measures for entrepreneurs creating new entrepreneurs creating new

jobs”jobs”Georgi IgnatovGeorgi Ignatov

Narva City Dep-t for Development and EconomyNarva City Dep-t for Development and Economy

AprilApril 2010 2010

Aim

The support measures foreseen in the present order are aimed mainly at increasing of the employment of Narva residents.

The new measures are aimed just to facilitate the emergence of a large number of jobs in a relatively short time, while the scope of activities of the enterprises can be both traditional and new for the city of Narva.

The order of support for entrepreneurs creating new jobs approved by the Resolution of the Narva City Council no. 9 from 11.03.2010.

Who is supported:

Foreign entrepreneurs– the branches of foreign enterprises, registered in the Commercial Register of Estonia; the companies, entered into the Commercial Register of Estonia, in which more than 50% is held by individuals or juridical persons, who are not the subjects of law in Estonia.

Entrepreneurs from the other towns of Estonia– the non-foreign entrepreneurs, who are the subjects of law in Estonia and whose location site and enterprises are not situated in the administrative territory of the city of Narva.

Local entrepreneurs – the entrepreneurs, whose location site or the enterprises, through which they perform their activity, are situated in the administrative territory of the city of Narva, and who are not the foreign entrepreneurs or the entrepreneurs from the other towns of Estonia.

General principles of support (1/2)1. All supporting measures, foreseen by the present order, are provided only in case of creating new jobs for the registered residents of Narva. The persons hired within the scope of the measures must remain the residents of Narva, according to the register of population, for at least the entire period of support.2. The jobs created by an entrepreneur through the acquisition or takeover of another business or part of it are not considered as new jobs. 3. In assessing of the newly created jobs all the enterprises associated with the entrepreneur are considered as a whole.4. All the measures come into effect only when at least 10 new jobs are created for the registered residents of Narva. The exception is for rent-free providing of the industrial premises and equipment for the start-up entrepreneurs.5. The economic principle of providing the support is based on the rule that the support provided for each individual company should depend on the additional income, which the local self-government receives as a result of creating new jobs, and should not exceed the size of this income.

General principles of support (2/2)

6. In those cases, where a long-term impact is observed and where a multiplication effect is strong, the amount of support is maximal. And vice versa – it is less in those cases, where the jobs are created, but the effect is short-term or the multiplication effect is negligible.7. Those supporting measures, which foresee the direct monetary expenditures from the budget (cash benefits, mediator payment, compensation for utility costs), are performed only after the city budget receives the income tax for the accounting period from this enterprise, in minimal amount not less than the value of the monetary support. The actual amount of support is determined on the basis of the actual amount of the income tax payment into the city budget, in proportion to the rates set out by the measures and in accordance with a plan that a businessman has provided before the accounting period.8. The main control method for the performance of the measures and the practical tool for determining the amount of support is the analysis of the Tax Department data on the change in the listed number of workers registered in Narva and the value of the income tax generated by them in the period preceding the application for the support and within the duration of the measures.

Target groups and types of supportMonetary benefit

Compen-sation for growth of rates

Free rent of premises

Free rent of equipment

Support persons

Free consulting

Foreign manufacturing companies Manufacturing companies from other towns of Estonia

Expanding Narva

productions Starting-up industrial entrepreneurs Enterprises outside

Narva Narva enterprises bringing the external money

All enterprises in or outside Narva, which create more than 10 new jobs for the residents of Narva and don’t

belong to the trade sector

An industrial enterprise, which exists or will act in

Narva

An enterprise, which is new

for Narva

Coming external

enterprise

Coming foreign

enterprise

Monetary benefit: 50% from the Tax in the years 1 and 2

Compensation of rates up to 30% from the Tax during 5 years

Free rent of premises for 5 yearsSupport persons for 3 years

Free consultingMonetary benefit: 50% from the

Tax in the years 1 and 2Compensation of rates up to 30%

from the Tax during 5 yearsFree rent of premises for 5 years

Monetary benefit: 50% from the Tax in the years 1 and 2Free rent of premises for 5

years + equipment

Monetary benefit: 50% from the Tax in

the years 1 and 2

Monetary benefit: 30% from the Tax in the

year 1 and 20% from the Tax in the

year 2

Monetary benefit: 20% from the Tax in the year 1 30% from the Tax

in the year 2

Free rent of premises for 5 years & equipment

Compensation of rates up to 30% from the Tax

during 5 years

Support persons for 3 years Free consulting

Narrowing the target groups (selecting the most effective ones) Maximal support

Minimal support

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Supported:The support measures for entrepreneurs apply for the entrepreneurs that operate in the areas set by the Narva City Council, especially in the areas related to industrial and construction activities, namely:

Supported:

Sphere of activity EMTAK 2008

- Manufacture of food products- Manufacture of beverages, except alcohol- Manufacture of textiles- Manufacture of wearing apparel - Processing of leather and manufacture of leather products - Manufacture of wood and wood products, except furniture - Manufacture of paper and paper products- Printing and reproduction - Manufacture of coke and refined petroleum products- Manufacture of chemicals and chemical products - Manufacture of basic pharmaceutical products and pharmaceutical preparations - Manufacture of rubber and plastic products

C10 C11C13C14C15

C16

C17C18C19

C20C21 C22

Supported:

Sphere of activity EMTAK 2008

- Manufacture of non-metallic mineral products- Manufacture of metals- Manufacture of fabricated metal products, except machinery and equipment- Manufacture of computer, electronic and optical products- Manufacture of electrical equipment- Manufacture of machinery and equipment - Manufacture of motor vehicles, trailers and semi-trailers- Manufacture of other transport equipment- Manufacture of furniture- Other manufacturing- Repair and installation of machinery and equipmentElectricity, gas, steam and conditioned air supply- Construction

C23C24C25

C26

С27C28С29

С30C31C32C33D35F

Every entrepreneur has the right to present only one project.One or more supporting measures may be provided within one project.

Support measures for Entrepreneurs Monetary benefit for creation of new jobsThe given support measure is provided for the period of 24 months

Recipient of support

Amount of support

All enterprises •30% from the additional tax in the first year of the project•20% from the additional tax in the second year of the project

Industrial enterprises

•50% from the additional tax in the first year of the project•50% from the additional tax in the second year of the project

Support measures for Entrepreneurs Compensation for increasing of costs for heat and water supply services and sewage into the public water and sewage networkThe given support measure is provided for the period of 60 months In the case if the monetary benefit for creation of jobs is accepted

Recipients of support

Amount of support

Foreign entrepreneurs and the entrepreneurs from the other towns of Estonia, who come to Narva

•up to 20% from the additional tax in the first year of the project•up to 30% from the additional tax in the second, third, fourth and fifth years of the project.

Support measures for EntrepreneursCompensation for increasing of costs for heat and water supply services and sewage into the public water and sewage networkThe given support measure is provided for the period of 60 months In the case if an Applicant refuses from the monetary benefit, the amount of support on compensation of growth in the cost rates increases to the following values:

Recipients of support

Amount of support

Foreign entrepreneurs and the entrepreneurs from the other towns of Estonia, who come to Narva

•up to 50% from the additional tax in the first year of the project. •up to 60% from the additional tax in the second, third, fourth and fifth years of the project.

Support measures for Entrepreneurs Providing a service of a support personThe recipients of the given measure are the foreign enterprises coming to Narva. The amount of the support depends on the planned number of new jobs for residents of Narva.The support measure is provided for the period of up to 36 months

The planned number of jobs

Amount of compensation for the support person service

from 50 to 99

from 100 to 149

150 and more

•5 000 ЕЕК/month (about 320 EUR/month), during 3 years;

•8 000 ЕЕК/month (about 510

EUR/month), during 3 years; •12 000 ЕЕК/month (about 767 EUR/month), during 3 years.

Besides, the following support measures are planned:

A benefit for mediation in bringing a foreign enterprise into Narva.The amount of the benefit will be linked to the amount of additional tax coming from the business activity of the enterprise. A special support person will be assigned for a foreign enterprise at the expense of the city, whose task it is to interact with local and state authorities on behalf of the enterprise. This measure is intended for the businesses that create over 50 jobs. The support persons may be chosen from the consultants on entrepreneurship, which are accepted by the City. Free counseling on obtaining of funds from the EU Structural Funds. Depending on the size of the enterprise the amount of consulting may be from 10 to 40 hours. The counseling may be performed with the resources of SA Ida-Virumaa Tööstusalade Arendus (The foundation Ida-Virumaa Industrial Areas Development).

Besides, the following support measures are planned:

To provide a free rent of municipal industrial areas at Linda 6. Additionally to this measure to provide a free rent of metal-working equipment transferred to the City from the part of the Cargotec Estonia AS together with the building at Linda 6.

Another measure of support for the starting enterpreneurs is co-financing from the city budget for the projects aimed to start-up of business activity. Amount of the benefit: up to 50 000 kroons and not more than 25% from the total sum of the project.

“The order of appropriation of funds for co-financing of the projects of starting up entrepreneurs”. Approved by the Resolution of the Narva City Council no. 25 from 28.06.2007.

THANK YOU FOR THANK YOU FOR YOUR ATTENTIONYOUR ATTENTION