Six Special Economic Areas To Be Created In Russia
Russian Prime Minister Mikhail Fradkov has signed decrees on creating six special economic areas in six separate regions of Russia.
Dec 24, 2005
MOSCOW - Russian Prime Minister Mikhail Fradkov has signed decrees on creating six special economic areas in six separate regions of Russia, Economy Minister German Gref said at a government meeting on Thursday.
The Economy Ministry had submitted to the government a list of six regions where special economic areas could be created. Four technical and promotional areas would be set up, in Zelenograd (microelectronic design), Dubna in the Moscow region (nuclear and physical technologies), St. Petersburg (information technology) and Tomsk (development of new materials). The industrial and production areas will be created in the Lipetsk region (manufacturing of household electronics and perhaps furniture) and Yelabuga in Tatarstan (production of car parts and hi-tech petrochemical products).
The Federal Law "on special economic zones" was passed by the State Duma on July 8, approved by the Federation Council on July 13 and signed by the President on July 23. The bill, which defines the legal framework for such areas, procedures for their creation and rules governing business activity, was passed by the State Duma on July 8 and approved by the Federation Council on July 13.
Two kinds of zone will be set up, one classified as technical and promotional, and the other as industrial and manufacturing. The first will be created in an area of up to 20 square kilometers, the second across 2 square kilometers, for lifetimes of 20 years and open to both Russian and foreign businesses.
Taxation rules for companies operating in special economic areas will be established by the Tax Code of Russia. The single social tax will be reduced from 26 to 14 percent for businesses operating in technical and promotional zones. Companies will be exempt from tax on property and land for five years and freed from import taxes, in a move to stimulate export businesses and attract investment in manufacturing.
Zones will be customs-free areas where foreign goods will be moved without payment of customs tariffs or taxes and free of other economic restrictions envisaged by legislation on state regulation of foreign trade.
Operations in manufacturing and industrial economic zones must invest at least EUR 10 million in such areas, including EUR 1 million within the first year of operation.
The Economy Ministry had submitted to the government a list of six regions where special economic areas could be created. Four technical and promotional areas would be set up, in Zelenograd (microelectronic design), Dubna in the Moscow region (nuclear and physical technologies), St. Petersburg (information technology) and Tomsk (development of new materials). The industrial and production areas will be created in the Lipetsk region (manufacturing of household electronics and perhaps furniture) and Yelabuga in Tatarstan (production of car parts and hi-tech petrochemical products).
The Federal Law "on special economic zones" was passed by the State Duma on July 8, approved by the Federation Council on July 13 and signed by the President on July 23. The bill, which defines the legal framework for such areas, procedures for their creation and rules governing business activity, was passed by the State Duma on July 8 and approved by the Federation Council on July 13.
Two kinds of zone will be set up, one classified as technical and promotional, and the other as industrial and manufacturing. The first will be created in an area of up to 20 square kilometers, the second across 2 square kilometers, for lifetimes of 20 years and open to both Russian and foreign businesses.
Taxation rules for companies operating in special economic areas will be established by the Tax Code of Russia. The single social tax will be reduced from 26 to 14 percent for businesses operating in technical and promotional zones. Companies will be exempt from tax on property and land for five years and freed from import taxes, in a move to stimulate export businesses and attract investment in manufacturing.
Zones will be customs-free areas where foreign goods will be moved without payment of customs tariffs or taxes and free of other economic restrictions envisaged by legislation on state regulation of foreign trade.
Operations in manufacturing and industrial economic zones must invest at least EUR 10 million in such areas, including EUR 1 million within the first year of operation.