Russian residents are increasingly shifting from running small and medium-sized businesses to operating as self-employed individuals. This trend has drawn attention in the press and is cited as a finding from a joint study conducted by the Russian Academy of National Economy and Public Administration (RANEPA) together with the SME Corporation. The spotlight is not on whether existing small firms are formalizing, but on a broader pattern: more people are choosing to declare their work as independent, legalizing activity that previously took place informally. This shift reflects a broader approach to how work is organized and reported in the country, with many workers seeking the flexibility of self-employment while navigating new regulatory pathways.
Experts note that the rise in self-employment does not primarily come from a wave of newly registered individual entrepreneurs or established companies voluntarily reclassifying themselves. Instead, the main effect appears to be the legalization of work that had not previously been registered as a formal business activity. In practical terms, many individuals are moving from informal or semi-formal arrangements to official recognition under self-employment schemes or simplified tax regimes that better fit the nature of their work. This evolution signals a shift in how workers describe and document their income, as well as how the government tracks and supports unregistered labor in the modern economy.
Statistics cited by government agencies indicate that only a small portion of the self-employed are officially registered as individual entrepreneurs. In many cases, people choose to operate under simpler or more flexible tax models that do not involve full registration as a business entity. This difference between self-employment and formal entrepreneurship has implications for social protections, tax collection, and the administrative workload faced by both workers and public authorities. The public conversation around these numbers emphasizes the importance of clear guidelines, accessible registration options, and secure channels for reporting income, all aimed at reducing the legal and financial uncertainty faced by independent workers.
Meanwhile, officials from the Ministry of Economic Development have underscored that employment levels within the small and medium-sized enterprises sector remained relatively stable during the period in question. This stability suggests that the rise in self-employment is not triggering mass layoffs or a sharp contraction in enterprise activity, but rather representing a redefinition of how people participate in the economy. The government continues to monitor these dynamics to ensure that the regulatory framework supports both established SMEs and the growing contingent of self-employed professionals, balancing labor market flexibility with income security and fair tax treatment.
For context, the official data reported that by the end of July 2023, the number of taxpayers paying professional income tax reached a total of 8.062 million, with 6.56 million of them actively contributing under this tax regime. This information highlights the scale of professionals who opt for tax structures aligned with self-employment or independent work, and it provides a benchmark for assessing how policy adjustments influence take-up rates and compliance. The figures also reflect a broader trend toward formal reporting of earnings for many who previously relied on informal arrangements, signaling gradual changes in tax administration and compliance culture across the labor market.
Looking at legislative development, there have been discussions at the federal level about creating specialized tax applications or simplified reporting tools tailored to bloggers and other content creators who generate income through online platforms. Such proposals aim to provide clearer, more efficient pathways for declaring income that arises from digital-work activities, while simplifying compliance for individuals who may not fit neatly into traditional business categories. This ongoing policy dialogue reflects a wider recognition that modern work often crosses sectoral boundaries and requires adaptive administrative solutions to capture earnings accurately and fairly.