Irkutsk
Ulan-Ude

Blagoveshchensk
Chita
Yakutsk

Birobidzhan
Vladivostok
Khabarovsk

Magadan
Yuzhno-Sakhalinsk

Anadyr
Petropavlovsk-
Kamchatsky
Moscow

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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 above measures are part of a large-scale state program for the economic development of the Far East and improving the quality of life of its population. Its current version is calculated until 2025. The implementation of the program is supervised by the Ministry for the Development of the Far East.

“To date, 35 new enterprises have been commissioned,” Yuri Trutnev, the presidential envoy to the Far Eastern Federal District, reported to Russian President Vladimir Putin this summer. - By the end of the year, there will be 85 such enterprises. The volume of private funds already invested in the economy of the Far East will exceed 115 billion, 5,5 thousand jobs will be created. Our current multiplier is 10, that is, we attract 10 rubles of private investment for one budget ruble. Enterprises of various fields - industry, agriculture, logistics, transport. Under the agreements, the volume of announced investments exceeded 3 trillion. These are still agreements, but 745 billion are already under construction. 25% of investments are foreign. Our dear neighbors from China, Japan, Korea are also investing 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.

To develop the projects of the TOP and the Free Port, a state management company was established - the Corporation for the Development of the Far East (KRDV). “Promotion of entrepreneurial activity 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 ASEZ sites and support investment projects on the principle of “one window”, ”says Denis Tikhonov, General Director of JSC KRDV.

The corporation manages the TOP in the constituent entities of the Federation that are part of the Far Eastern Federal District, and with the adoption of the Federal Law “On the Free Port of Vladivostok”, the Free Port project was also included in its area of ​​responsibility. The fundamental principle of the corporation is a "single window" for the investor. KRDV provides administrative support for investment projects in the field, accepts applications for the status of a resident of ASEZ and FPV, helps in developing a business plan, advises on tax and accounting issues, and represents the interests of a resident in court. Also, within the framework of the PDA regime, the necessary infrastructure and support of customs operations are provided. Under the FPV 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.

ASEZ.jpg

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 ASEZ or FPV, you must submit an application to the Far East Development Corporation. The application form and a sample business plan can be found on the website of JSC KRDV in the section "About the Corporation" or received by e-mail from a 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., 8, str. 1, floor 7, MFC “Capital City”, Northern block) or Vladivostok (690922, Vladivostok, Okeansky prospect, 17 , office 1403) or by email 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;
  • 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 ASEZ and the Free Port is progressing at an increasing pace. As of August 25, 2017, agreements on the implementation of 158 investment projects for 494,5 billion rubles were signed with residents of the TOP. 

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.

Free port.jpg

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 obligations imposed by the law. “We must ensure the unconditional implementation of all projects announced by residents, provide them with any assistance for this. We must complete the construction of infrastructure facilities necessary to launch new projects for the residents of the TOP. It is also a good magnet for new investors to come, ”he emphasizes.

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.

South Korean investors have three projects in SPV: LLC Vostok-Polikor is creating a plant for the production of polyurethane and household chemicals, LLC Gorodskaya Transportnaya Sistema is developing an electronic fare payment system in Vladivostok, LLC JV RosKor is organizing the production of small-panel formwork ... Also, FPV registered residents with investments from the United States and Mexico, building ranches, a tea hanging factory project from Singapore and an Indian KGK project to create a cutting 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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