|Status – Has any special status been introduced?
No special regime has been introduced at the federal level, but all regional authorities have introduced a state of high alert with different restrictive measures.
Generally, restrictions are being gradually relaxed. However, under the President’s Order of May 11, 2020, regional authorities may decide which organizations may remain open and impose restrictions on the movement of people and vehicles based on the local epidemiologic situation.
Moscow's mayor initiated a gradual lifting of restrictive measures.
Starting from January 27, 2021, the requirement to have at least 30% of personnel working remotely has been lifted (except for employees older than 65 and/or having a specific medical condition). Additionally, catering and entertainment business are permitted to operate at day and nighttime (from 23:00 to 6:00).
In St. Petersburg, some restrictions also were removed. Self-isolation for citizens over 65 has become a recommendation rather than mandatory. Wearing face masks and gloves is advised outdoors, although they remain mandatory in stores and vehicles. Remote working requirements are similar to Moscow.
|Which retail units are Open
Regions may impose different measures depending on the epidemiological situation.
In Moscow, all retail units (both food- and non-food retail) may operate from June 1, 2020.
All stores that may operate under the law must comply with the requirements imposed by the Decree of the Mayor of Moscow of March 5, 2020 No. 12-UM and federal authorities pertaining to sanitary precautions.
In St. Petersburg retail units are open provided they comply with sanitary measures imposed by law (including the requirement for employees to wear face masks and gloves and enforcing maximum occupancy of one person per 4 sq.m.).
Starting from February 12, catering (including food courts) may operate unrestricted and around the clock provided they comply with sanitary measures imposed by law (for example, food courts and food places may serve no more than 50% of tables).
|Leases - Have special laws related to COVID-19 been implemented
At the federal level:
All tenants are entitled to request rent reduction for the time the leased property could not be used due to the state of high alert.
Tenants operating in the industries on the federal list of those most affected by the COVID-19 outbreak are entitled, in addition to rent reduction, to claim deferral of 100% of rent during the state of high alert. After the end of the state of high alert and until October 1, 2020, 50% of the rent shall be deferred. The deferred rent shall be paid after January 1, 2021 until January 1, 2023.
The federal list of industries includes transportation services, recreational services, sport and tourism activities, the hospitality business, catering, education, conference organizing, consumer services, non-food retail, and mass media.
Additionally, small-and medium scale entities operating in the industries most affected by the COVID-19 outbreak may demand rent reduction for one year or unilaterally terminate the lease agreement with no penalties, if they fail to reach agreement with the landlord on the rent reduction.
At the regional level, additional measures may be adopted.
Several regions, including Moscow and St. Petersburg, have exempted tenants operating in specific industries (including trade) from paying rent for government-owned property for the period during which their activity was prohibited.
In Moscow, landlords, who lease premises for the purposes of trade, catering or consumer services, and who reduce the rent for the tenant by at least 50% for the period when the tenants’ activity was prohibited, will receive support regarding land tax, property tax, rent payments for the land plot (if leased from the government) for the respective period. Similar support measures with respect to property tax were enacted in Moscow Region.
In St. Petersburg, the following additional measures are available for tenants leasing regional property and providing services in accordance with the approved list, including hotel, catering, tourism, retail and other services:
rent deferral for the period from March 13, 2020, till October 1, 2020. Payment of rent for the specified period should be made from January 1, 2021, to January 1, 2023.
From March 13, 2020, until the end of the emergency or high preparedness regime, there is a deferral of rent, and until October 1, 2020 deferral of payment of 50% of the rent.
Also small and medium-sized enterprises that are tenants of city property and carry out activities in certain areas, for example, catering, hotel business, retail trade in non-food products, etc., are exempted from paying rent from April 1, 2020 to June 30, 2020.
Actions to evict small- and medium-sized businesses whose lease agreements expired, but which continue to pay rent, are suspended until December 31, 2020.
Government wage subsidies
Entities operating in the industries on the federal list of those most affected by the COVID-19 outbreak, as well as socially oriented nonprofit organizations, may take loans to pay employees’ salaries. The loan amount is RUB 12,130 multiplied by the number of employees, at a 2% interest rate.
According to the Russian government, if the entity retained at least 90% of the employees, the government will pay the loan in full (interest included). If at least 80% of employees were retained, the government will pay 50% of the loan amount (interest included).
Sick leave pay
Sick leave pay will be calculated on the basis of the monthly minimal wage instead of the current formula based on the employee’s length of work and current salary.
Benefits will be set to match the monthly minimal wage
In Moscow and Moscow Region, all who are declared unemployed according to the established procedure will receive additional compensation (RUB 19,500 in Moscow and RUB 15,000 In Moscow Region) from April 1 to September 30, 2020.
Social insurance fees for employees
For small and medium-sized enterprises, the social insurance fees will be reduced from 30% to 15% of the employee’s salary for an indefinite amount of time.
Postponement of tax payments
For small- and medium-sized enterprises of industries affected by the outbreak (to be defined by the government) all tax payments excluding VAT will be postponed for six months.
Moscow has postponed advance payments of property tax, land tax and trade fee for the 1st quarter of 2020 for certain industries (catering, tourism etc.).
St. Petersburg has exempted small- and medium-sized enterprises operating in specific industries (such as hotels, catering etc.) from advance payments for property tax and land tax.
For some taxes, the payment dates from 3 to 6 months for personal income tax, income tax, simplified taxation system and others.
Some tax returns are extended.
The collection measures and the moratorium on blocking accounts were suspended until July 1, 2020 (there are some exceptions).
From April 3, 2020 to October 3, 2020, a moratorium was instituted on initiating bankruptcy cases.
In St. Petersburg, zero interest rate on income tax is set for special investment companies.
In addition, a number of tax support measures have been provided to small and medium-sized enterprises that keep their average wages at least minimum.
|Selected other COVID-19-related legislation relevant for retail business
In 2021, international air traffic restrictions have been relaxed. In particular, air traffic has been resumed with Finland, Vietnam, India and Qatar.
By the Resolution of the Russian Government of June 6, 2020 No. 1511-r, border crossing restrictions are partially lifted. Foreigners may enter Russia for medical treatment or for visiting relatives who are in need of care. Russian citizens may leave Russia for medical treatment, for visiting relatives, or for working and studying abroad.
In addition, the Higher Court of Russia ruled that a lack of funds caused by the closure of business operations due to restrictive measures may constitute a force majeure event (which could serve as a ground for an exemption from penalties) for a failure to fulfill payment obligations.
Furthermore, under the Resolution of the Russian Government of April 3, 2020, No. 440, alcohol retail licenses (among others), which are to expire in the period from January 1 to December 31, 2021, are prolonged for an additional 12 months.