The Government of the Russian Federation has established a procedure for entering into special investment contracts that will apply to certain industries.
As part of implementing Federal Law No. 488-FZ, dated 31 December 2014, On the Industrial Policy of the Russian Federation (hereinafter, the ‘Law’), the Government of the Russian Federation has established a procedure (the 'Procedure') for entering into special investment contracts ('Investment Contracts') that will apply to certain industries (Russian Federation Government Resolution No. 708, dated 16 July 2015).
The Law and Resolution provide significant incentives to those investing in industrial sectors and effectively introduces a one-stop shop service for obtaining access to the incentives provided for in federal legislation, regional legislation, and the charters of municipal entities.
In particular, the financial incentives include:
provision of subsidies from the federal budget, the budgets of the regions of the Russian Federation, and municipal budgets; and
the granting of the tax concessions stipulated by federal and regional legislation.
One of the key incentives provided ensures support for R&D and innovation activities in the implementation of the industrial policy. This is provided for in Article 12 of the Law.
To be eligible for the abovementioned incentives, an investor needs to enter into an Investment Contract.
Investors are entitled to choose and specify the incentives they would like to obtain.
The minimum investment amount for entering into an Investment Contract is RUB750m. The investment can be for the establishment of a new production facility or for the upgrading of an existing one.
The Investment Contract is for a maximum period of 10 years.
Procedure for obtaining incentives.
In order to enter into an Investment Contract, the investor needs to provide a package of documents comprising the investment project’s business plan and a copy of the investment agreement.
By concluding an Investment Contract, investors will benefit from the financial incentives (including tax concessions) provided for in both federal and regional legislation, as well as obtain guarantees that the incentives will remain in effect for the entire period of the Investment Contract.
We would be pleased to provide you with comprehensive support and assist you in preparing the document pack required for making an Investment Contract.
For any further discussion on the matter, please do not hesitate to contact us.
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