Irkutsk
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Foreign business has believed in the Far East

The Russian Far East has enormous opportunities for development. However, turning this potential into real wealth is a task that can be solved only by a strong and reliable system of attracting investors. It is exactly the same as it is now being created in the Far Eastern Federal District

Foreign business has believed in the Far East
Photo: Shutterstock.com

"Three whales" of the development of the Far East: TOP, SPV, state support

The areas of advanced socio-economic development (TOR) are created to implement both large-scale, industrial projects and the development of small and medium-sized businesses on specific compact sites. To these sites the state undertakes to bring the infrastructure necessary for future enterprises. Having received the status of TOR resident, the initiators of investment projects can use a wide range of benefits - from tax to administrative ones.

In the development of this idea, the state adopted another preferential regime in the Far East - the Free Port of Vladivostok. Despite the fact that the title mentions only the capital of Primorsky Krai, the regime of the free port operates in several regions of the Far Eastern Federal District and continues to expand. In its framework, the state provides benefits in exchange for investment - without building infrastructure.

Both modes are similar, although they also have minor differences in the benefits provided. Their main difference is as follows: A free port is a preferential regime operating within the boundaries of a municipal formation, while a TOP is a zone with specially established borders. As a rule, the TOP includes either existing industrial facilities ("brownfield" type) or promising sites for their placement ("greenfield").

Through the third mechanism - subsidizing the costs of investors for infrastructure - the state undertakes obligations to build networks and roads to new facilities without providing tax breaks. As a rule, large mining and port companies are ready to go along this path.

Management of development: the investor first of all

The measures listed above are part of a large-scale state program on the economic development of the Far East and improvement of the quality of life of its population. Its current version is calculated up to 2025 year. The program is overseen by the Ministry for the Development of the Far East.

"To date, 35 new enterprises have been handed over," Yury Trutnev, the presidential envoy to the Far Eastern Federal District, reported to Russian President Vladimir Putin this summer. - Until the end of the year, such enterprises will be 85. The amount of private funds already invested in the economy of the Far East will exceed 115 billion, 5,5 will create thousands of jobs. Our current multiplier is 10, that is, for one budget ruble we attract 10 rubles of private investments. Enterprises of various fields are industry, agriculture, logistics, transport. Under agreements, the volume of declared investments exceeded 3 trillion. This is still an agreement, but 745 billion is already under construction. 25% of investments are foreign. Our esteemed neighbors from China, Japan, Korea also invest money here. "

Minister of the Russian Federation for the Development of the Far East Alexander Galushka says that the Russian Far East has created competitive investment conditions. "Thanks to new measures to support investors, new plants, new institutions, new infrastructure are already being created," he said.

For the development of TOR and Freeport projects, a state management company was established - JSC Far East Development Corporation (KRED). "The promotion of entrepreneurial activities in the Far East is a key function of the Corporation. Our task is to create favorable financial and administrative conditions for business, infrastructure development of TOP sites and support of investment projects on the principle of "one-stop shop", "says Denis Tikhonov, General Director of KRDV.

The Corporation manages TOP in the constituent entities of the Far Eastern Federal District, and with the adoption of the Federal Law "On the Free Port of Vladivostok", the Freeport project entered the zone of its responsibility. The fundamental principle of the corporation is a "single window" for the investor. KRMD provides administrative support for investment projects in the field, accepts applications for obtaining the status of a resident of TOP and SPV, helps in the development of a business plan, advises on tax and accounting issues, represents the interests of a resident in court. Also under the TOR regime, the necessary infrastructure and support for customs operations are provided. Under the SPV regime, the management company assists in obtaining a land plot without bidding.

Denis Tikhonov says that it is important for the authorities and for the CDA itself that every announced investment project gets a chance for implementation: for them new enterprises, new jobs, the development of the region and the well-being of residents.

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Investments for benefits

Investors who confirm their status as residents of TOP and SPV receive unprecedented tax, customs, administrative and other preferences for Russia. All this is clearly recorded in the laws on new preferential regimes, associated with them numerous amendments to already existing laws and by-laws.

The reduction in the tax burden occurs, first of all, in basic Russian taxes: on profits, on property and on land. Social contributions payable from the wage fund of employees of enterprises are significantly reduced. The difference is compensated by the state.

No less important are non-tax incentives: they simplify and speed up the numerous administrative procedures accompanying the opening of any business in Russia.

Becoming a resident is easy

To become a resident of the TOP or SPV, you must apply to the "Development Corporation of the Far East". The application form and a sample business plan can be found on the website of JSC KRDV in the section "About the Corporation" or receive by e-mail from the personal manager.

A copy of constituent documents (for legal entities), a business plan, a copy of the certificate of state registration of a legal entity or an individual as an individual entrepreneur, a copy of a certificate of registration with the tax authority must be attached to the application. For foreign persons also need a certified translation of documents into Russian.

The application and the package of documents can be sent by mail to Moscow (123317, Moscow, Presnenskaya nab., D. 8, page 1, 7, IFC City of Capitals, Northern block) or Vladivostok (690922, Vladivostok, Ocean Avenue, 17 , room 1403) or to an email address info@erdc.ru.

The application will be reviewed within 15 working days. If the project meets all the necessary criteria, a positive decision will be made on it. Further, the applicant concludes an agreement on the implementation of activities with JSC KRDV and receives a certificate of the status of a resident of TOP or SPV.

Criteria for evaluating applications of potential residents of the WSS:

  • registration on the territory of the Free Port;
  • individual entrepreneur or commercial organization;
  • the volume of investments is not less than 5 million rubles;
  • the implementation of permissible activities;
  • availability of a business plan
  • no arrears in taxes and fees, bankruptcy proceedings, reorganization or liquidation.

Requirements for the business plan:

  • information about the investor;
  • information about the project: key indicators, project schedule, sources of funds, resource requirements, infrastructure;
  • information about the products (works, services).

Criteria for evaluating applications of potential residents of TOR:

  • registration on the territory of TOR;
  • individual entrepreneur or commercial organization;
  • the volume of investments is not less than 500 thousand rubles;
  • implementation of permissible types of activities assigned to a specific TOP;
  • availability of a business plan;
  • no arrears in taxes and fees, bankruptcy proceedings, reorganization or liquidation.

The process of registration of companies - residents of the TOP and the Free Port is proceeding at an increasing rate. According to data for 25 August 2017, with the residents of the TOP, agreements on the implementation of 158 investment projects for 494,5 billion rubles have been signed.

The residents of the Free Port of Vladivostok have concluded 284 agreements on investments in the amount of 321,8 billion rubles.

These projects have different implementation periods, in the future up to 2025 year and beyond. Nevertheless, the figures look impressive. For comparison: according to forecasts, the gross regional product of all regions of the Far Eastern Federal District in 2017 will be 3,88 trillion rubles. Confirmed by agreements with residents of the TOP and SPV, the total investment will bring 21% of the annual GRP of the federal district.

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Promised above all

By linking the investment plans of many private and public companies with the obligations to build utility networks for a budget account, the state must now ensure a 100% synchronization of construction work at the sites of TOP. "We have already practically designed everything, have issued the necessary documents, now together with the regional governments we are building infrastructure facilities at all TOPs. Where work began earlier, they are already approaching the finale. Today, we practically live on the construction site, we help the residents in the construction, we build our facilities throughout the Far East, "says Denis Tikhonov, General Director of the KRDV.

According to Denis Tikhonov, the priority of the corporation's work remains the fulfillment of all the obligations that are imposed by law. "We must ensure the unconditional implementation of all the projects announced by the residents, provide them with any assistance. We must complete the construction of infrastructure facilities needed to launch new projects for residents of the TOP. This is also a good magnet for the arrival of new investors, "he said.

Foreign investors came to the Far East

The dynamics of projects that are applying for the status of a resident of TOP and SPV confirms the growing interest from foreign investors and the effectiveness of capital investments in the Far East. For example, three investors today are implementing projects involving Japanese investment. JOR Evergreen has commissioned a greenhouse for growing vegetables in the Khabarovsk TRG. A similar project in the TOR "Kangalassy" is implemented by the resident "Sayuri". SPV is also implementing a project with Japanese investment - the coal terminal.

Investors from South Korea have three projects in St. Petersburg: Vostok-Polikor LLC is creating a plant for the production of polyurethane and household chemicals, LLC Urban Transport System is developing an electronic payment system for travel in Vladivostok, RosKor JV LLC is organizing the production of small-piece formwork . Also in the SPV are registered residents with investments from the US and Mexico, building a ranch, a project of a tea hanging factory from Singapore and a project of the Indian KGK to set up a diamond factory for the production of diamonds.

"The company plans to launch a full production cycle with the purchase of raw materials and the creation of its own components and finished products. Now the products produced at our plant are sold on the territory of the Far East. In the near future the company plans to enter the market of the western part of Russia and the markets of the countries of the Customs Union. In the long term, it is planned to direct 50% of the volume of production for export to China and South Korea, "says the general director of Vostok-Polikor Ltd. Khi Yong Yanakawa.

"The launch of a new production in the Far East as a resident of the Free Port of Vladivostok allows us to use the appropriate preferences for business development in the region and opens up serious opportunities for exporting cut diamonds to the countries of the Asia-Pacific region," said Sandip Kothari, managing director of the KGK group of companies.

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