The effective development of the forestry sector mainly depends on the specifics and ways of interaction between business entities and the bodies of government, since the land resources are owned by the state. The authors analyzed the normative legal acts regulating the interaction between the state and business entities in the sphere of forestry. They also systematized and analyzed the factors that determine the effectiveness of this interaction. Taking into account the activities of the government bodies and enterprises, the authors paid special attention to differentiation and systematization of the factors. After applying the interview method, organizing a brainstorm and carrying out the hierarchy analysis, the authors concluded that the economic factor is the most important. The authors formulated a number of recommendations concerning the regulatory and legislative support as well as the infrastructure provision and the support for small and medium-sized enterprises. The authors generalized a lot of analytical, research and legislative material to give an idea of the modern forms and methods of interaction between the executive authorities and business entities in the sphere of forestry. Apart from that, the authors analyzed the interaction of the mentioned structures in the sparsely wooded areas.