Incentives

Special Economic Zones

A Special Economic Zone (SEZ) is defined by the Russian Government as a region of the Russian Federation where special regulations apply to encourage entrepreneurial activities.

There are the following types of SEZs in the Russian Federation:

  • Industrial-Manufacturing
    • Lipetsk region
    • Republic of Tatarstan
  • Technology Development
    • Saint Petersburg
    • Zelenograd
    • Dubna
    • Tomsk
  • Tourism and Recreation
    • Kaliningrad region
    • Krasnodar krai
    • Stavropol krai
    • Altai Krai
    • Republic of Altai
    • Republic of Buryatia
    • Irkutsk region
  • Port

There are special incentives and tax privileges for residents of an SEZ, including a reduction in corporate income tax and exemptions from transport, property and land taxes.

Within the SEZs there is a special Customs regime - Free Customs Zone. A Free Customs Zone is defined as a Customs Regime when imported goods are placed and used within the borders of SEZ and are exempt from customs duties, VAT, and economic limitations set by the legislation of the Russian Federation on the sate regulation of foreign trade, as well as when domestic goods are placed and used in accordance with the customs regime of excise payments and are exempt from exports duties.

Priority Projects

In accordance with the Federal Law of 09.07.1999, № 160-FZ, “About Foreign Investments in the Russian Federation,” a priority investment project is defined to be an investment project with an overall foreign investment of at least 1 billion Russian rubles or the equivalent in foreign currency, or an investment project in which the minimal share (contribution) by foreign investors in the authorized (reserve) capital of a profit-making organization with foreign investments consists of at least RUR 100 million Russian rubles, or the equivalent in foreign currency, included in the list approved by the RF Government.

Regional Incentives

In addition to Federal incentives for foreign investors, there are also incentives available through regional legislation. More than 75 Russian Regions have enacted legislation for the protection of investor rights and granting incentives for foreign investors.

Some examples of typical Regional incentives include:

  • preferential rental rates for land and property owned by the Region;
  • tax incentives;
  • investment tax credits and rebates;
  • guarantees by Regional authorities;
  • support of proposals or applications from the investors to Federal authorities and to banks; and
  • Access to investment in temporarily frozen construction projects owned by a Region, as well as other tax and non-tax incentives.