(1) Preferential Programs
1) Guarantees for Foreign Investors
A. The protection of foreign investments is guaranteed by the Law of the Russian Federation "On Foreign Investments". The inviolability of foreign investments is unconditional, and in case of nationalization or expropriation compensation must be paid in the foreign currency used for the investment or in other foreign currency acceptable to the foreign investor.
B. The activities of the foreign investor can be stopped only if he declares his enterprise bankrupt, or violates the ecological and sanitary regulations, or in other cases provided for by law, and only on the basis of the list of the liquidation commission and after an accounting check.
C. No discrimination is permitted between foreign-invested enterprises and existing enterprises in the Russian Federation.
B. Establishment of joint ventures, the branches of which may belong exclusively to foreign investors;
C. Purchase of property, shares and other marketable securities;
C. Purchase of property, shares and other marketable securities;
C. Purchase of goods and services;
C. Purchase of goods and services;
C. Purchase of goods and services;
C. Purchase of goods and services;
C. Purchase of goods and services;
C. Purchase of goods and services. and other marketable securities;
D. acquiring the right to use land on the basis of a long-term lease agreement for a period of up to 70 years, as well as other property rights.
③Guarantees of discretionary profits
A. Tax exemption for five years on profits remitted abroad within the free economic zone;
B. Tax exemption on reinvestment;
C. Possibility of setting up current and clearing accounts in roubles and foreign exchange, and, with the permission of the Central Bank of Russia, also in foreign banks;
D. Possibility of exchanging roubles for foreign currency ;
E. Can use rubles in the Russian domestic market, reinvestment, and enterprises producing import-substituting products can exchange rubles for foreign currency at the agreed exchange rate.
4. Mortgage and lease rights
Both domestic and foreign investors have the right to lease land and property, and the right of use can also be transferred by mutual agreement. The right of use owned by the investor is in the nature of a mortgage.
Lease agreements with foreign investors can be modified only by mutual agreement.
5 Mechanism of business relations
Business relations in the Nakhodka Free Economic Zone are based on contracts. Enterprises can independently and autonomously develop and produce programs and sell their own products (services). The products of the enterprise are at its own disposal. Enterprises and organizations in the free economic zone have the right to use their own products (services) for bartering and brokering.
6) The right to obtain credit
Legal and natural persons in the free economic zone have the right to obtain credit from foreign banks, companies and organizations without restriction, and the right to attract foreign insurance companies to carry out any kind of insurance transactions with them.
7 Labor Law Issues
A. Attracting labor to foreign-invested enterprises on the basis of the basic work system;
B. Contracts in the field of labor relations are in the priority position;
C. The weekly working time quota is set at 40 hours, which is specified in the contract, and the labor law also permits to use the workers beyond this quota, provided that the wages are increased.
D. The conditions set forth in collective and individual labor contracts, in comparison with the conditions set forth in the legislation in force in the Russian Federation, cannot worsen the labor situation of workers in enterprises and organizations.
(2) System of tax, customs and other preferential policies
1) Taxes
The following taxes and preferential tax treatment are provided for foreign-invested enterprises with more than 305 shares;
A. Income tax on profits included in the state budget - 7%, and local income tax on profits - no more than 3%;
B. Tax on profits remitted abroad - 10%
B. tax - 10%;
C. Complete payment of income tax on profits and tax on profits remitted abroad within five years from the declaration of profits;
D. Exemption from taxation of profits reinvested in the development of social services and the construction of infrastructure projects in the territory of the free economic zone;
E. The right of the soviets of the city and the soviets of the partisan districts of Nakhodka to lower the local taxes and to exempt the foreign enterprises from local taxes;
F. Enterprises and organizations in the free economic zone are exempt from import and export taxes and taxes on the regulation of the use of funds, and do not raise taxes on profits derived from their excess profitability.
2. Customs regime
A special customs regime is applied in the Nakhodka Free Economic Zone;
A. Imported and exported goods and other property of the Free Economic Zone are exempted from payment of customs duties;
B. Goods and property transported from the Free Economic Zone to the other regions of the Russian Federation are subjected to customs duties only on the portion of goods and property of foreign origin;
B. Goods and property transported from the Free Economic Zone to the other regions of the Russian Federation are subjected to customs duties only on that portion of goods and property that has foreign origin;
C. Merchandise and other property shipped out of the free economic zone must be declared.
3. Quotas and licenses
A. The export of products produced in the Free Economic Zone is not subject to quotas and licenses, except for goods the export of which is restricted by law or by special regulations of the Council of Ministers of the Russian Federation. Products with a value added of more than 30% can be considered as products produced in the free economic zone;
B. Fishing industry enterprises (except for foreign investment enterprises with a foreign share of more than 50% of the legal fund) have the right to sell on foreign markets only their own production up to a maximum limit of 305;
C. Imports of goods and services are not subject to limitations, except for those specifically provided for and those provided for by intergovernmental agreements.
4. Entry and exit
A simplified system is in place for the entry and stay of foreign nationals in the country.
5 Registration of Enterprises
The registration of foreign-invested enterprises within the Free Zone is handled by the Administrative Committee without the need to submit it to the State for approval and is done within 36 hours after the foreign investor has completed the necessary formalities, and there is no restriction on the amount, type, or kind of investment or activity as long as the business is legal.
2. The Sakhalin Free Economic Zone
(1) Preferential Programs
1) Guarantees for Foreign Investors
A. Foreign investments are protected by regulations that cannot be stricter than the corresponding regulations for legal entities of the Russian Federation;
B. Measures of forcible suppression of foreign investments that have no basis in the law are not permitted, such as nationalization, expropriation, confiscation and other similar practices derived therefrom.
C. No discrimination against foreign enterprises in comparison with existing Russian enterprises is permitted;
D. The banning of foreign investment may be carried out only by court decision, but compensation must be paid in an amount that corresponds to the real (market) value of the investment that is being banned, which must be determined in a timely manner, before the actual implementation of the banning measure or its imminent implementation.
The compensation shall be paid in the currency in which the investment was made.
②Guidelines for the realization of foreign investments
③Types of investment projects and activities
A. Establishment of enterprises, branches, representative offices in free economic zones, which may engage in any activity within the limits permitted by the legislation of the Russian Federation. Foreign enterprises in banking and insurance may also be centrally established in the free economic zone.
B. All enterprises in the free economic zone may establish joint ventures on their own without consulting the State and competent ministries
C. All legal entities and nationals of the free economic zone may engage in foreign economic activity on their own, including industrial cooperation and barter. The registration of foreign economic units shall be carried out by the administrative organs of the free economic zones.
4. Guarantee of profit repatriation
Foreign investors in the Sakhalin Free Economic Zone are guaranteed the unimpeded repatriation of their profits after payment of taxes, the repatriation of foreign currency in the form of profits, and the repatriation of all or part of the share of the enterprise sold as a result of withdrawal from the joint venture or dissolution of the enterprise.
5. The right to open accounts
Foreign investors may open current and settlement accounts in the banks of the Sakhalin Free Economic Zone and have the right to conduct business activities throughout the territory of the Russian Federation in accordance with the legislation in force.
6) The right to exchange rubles
Foreign investors may freely use and reinvest their profits in rubles in the Sakhalin Free Economic Zone, as well as transfer abroad foreign currency legally exchanged for rubles on the currency market at the prevailing exchange rate.
7 Mortgages and Leases
With the adoption of the law on mortgages in the Russian Federation, legal entities of the Sakhalin Free Economic Zone, as well as foreign nationals, may pledge property and property rights to ensure the fulfillment of their obligations, including the attraction of foreign exchange funds from the land.
8 Mechanism of business relations
Juridical persons and residents of the Free Economic Zone "Sakhalin" may carry out foreign economic activities on their own, including business intermediation and barter trade.
9. Access to credit
10. Mechanisms of labor relations
A. Hiring and dismissal, wage scales, labor quotas, material incentives, labor breaks, social guarantees and subsidies in foreign-owned enterprises of the Free Economic Zone of Sakhalin may be decided by the enterprises themselves and regulated by collective contracts (agreements) and individual labor agreements (contracts).
B. The conditions of work of foreign workers in foreign-owned enterprises in the Sakhalin Free Economic Zone are determined by contracts concluded with individuals. The foreign currency income earned by these workers can be sent abroad without any obstacles after payment of taxes.
C. The Sakhalin Free Economic Zone establishes its own minimum wage, local pensions, benefits, allowances, scholarships and other forms of protection, which may not be lower than those established by the legislation of the Russian Federation.
(3) System of Tax, Customs and Other Incentives
1) Taxes
A. Income tax on the profits of foreign enterprises in the Free Economic Zone may not exceed 30%. Income tax on the profits of foreign enterprises, in which the share of foreign investors is more than 30% of the authorized fund, may not exceed 10%. The tax on the profits of enterprises engaged in the extraction of mineral deposits, fishing and processing of fishery products may not exceed 20%.
B. Foreign-invested enterprises registered in the Free Economic Zone "Sakhalin" with a foreign share of more than 30% of the authorized fund shall be entitled to the following additional preferential tax treatment;
(A) Exemption from income tax on profits for the first five years following the declaration of profits (except for enterprises engaged in the extraction of useful mineral deposits, fishing, and processing of fishery products).
(B) Enterprises engaged in the production of equipment necessary for agricultural production, production of goods for civil use, production of construction materials, production of equipment necessary for the construction of housing, public **** undertakings, cultural and recreational projects, as well as the construction and renovation of harbors, airports, and communication sequences, shall be subject to a 50% reduction of tax for five years after the profits are earned.
(C) Complete exemption from tax on interest earned from the purchase of bonds and other marketable securities issued by the executive committees of the local councils of people's deputies and the administrations of free economic zones in accordance with the laws in force.
Non-foreign-owned enterprises and foreign-owned enterprises registered in the Sakhalin Free Economic Zone are exempt from the following taxes:
A. Local tax on the acquisition of buildings - 100% in the first year, 80% in the second year, 60% in the third year, 40% in the fourth year, and 20% in the fifth year;
B. Reinvestment of funds for the development of the social sector in the Free Economic Zone for the purpose of the development of infrastructure projects of the Free Economic Zone. B. Reinvestment in infrastructure projects for the development of the social sector in the "Sakhalin" Free Economic Zone, as well as the use of the profits from the establishment of joint ventures in the Free Economic Zone and in other regions of Russia as a statutory fund, shall be fully exempted from tax;
C. Foreign enterprises in the "Sakhalin" Free Economic Zone shall be exempted from taxes on the export of products manufactured in the Zone, as well as taxes on the import of products necessary for the production of exported and imported substitutes;
The Sakhalin Region The People's Deputies of the Sakhalin Oblast may, on the basis of a free petition, grant other tax benefits to Russian and foreign legal entities.
2) Customs regime
Exported goods produced in the territory of the Sakhalin Free Economic Zone and imported goods used in its production and sold in the Zone are exempt from customs duties in accordance with the existing regulations.
Import and export of goods and other property in the Free Economic Zone "Sakhalin" must be declared at customs.
3. Quotas and licenses
A. Business activities related to the use of fuel and power resources and mineral raw materials in the Free Economic Zone are subject to consultations with the Sakhalin Oblast Soviet, the Geological Committee of the Russian Federation, and the Ministry of Economic Liaison.
B. Export of products produced in the Free Economic Zone "Sakhalin" and import of goods are not subject to quotas and licenses, except for goods regulated by the legislation of the Russian Federation. In special cases, export quotas may be established by decision of the "Sakhalin" Free Economic Zone administration. Products with an added value of more than 30% are considered to be produced in the "Sakhalin" Free Economic Zone.
The exploration and processing of oil, gas, precious metals and other strategically important natural resources of the Sakhalin Free Economic Zone shall be regulated by the Administration of the Sakhalin Free Economic Zone.
4) Entry and exit
A simplified system of entry and exit and stay of foreign citizens is implemented.
5 Registration of Enterprises
Registration of participants in foreign economic activities is carried out by the administrative bodies of the free economic zones.
3. Free Economic Zones of the Jewish Autonomous Oblast
(1) Preferential Programs
1) Guarantees for Foreign Investors
Measures against foreign investment that have no basis in law, such as nationalization, expropriation, confiscation, and other practices derived therefrom, are not permitted. Restrictions on the use of foreign investment are also not permitted, except for the temporary suspension of an investor's right to export because he has withdrawn his obligations. The proscription of foreign investment may be carried out only by a court decision, subject to compensation in an amount corresponding to the real (market) value of the proscribed investment, which must be determined in time before the proscription measure is actually applied or is about to be applied. The compensation shall be paid in the currency in which the investment was made.
②Guidelines for the realization of foreign investments
Foreign investors are given the right to invest in the territory of the free economic zone by;
A.Participation on the basis of shares in enterprises created together with Russian legal persons and citizens***;
B.Establishment of joint ventures, the branches of which may be exclusively owned by foreign investors;
C.Purchase of property, Stocks and other marketable securities;
3. Types of investment projects and activities
Enterprises in the territory of the free economic zone, irrespective of their ownership, may, at their own discretion, establish joint ventures with foreign and domestic investors. Joint ventures with foreign investors are registered directly in the free economic zone.
4 Guarantee of profit repatriation
Foreign investors in the free economic zones are guaranteed to repatriate their profits after they have paid the full amount of their taxes, which are to be paid in foreign currency in the form of profits, as well as all or part of the share of the enterprise that is sold upon withdrawal from the joint venture and dissolution of the enterprise.
5 Power to Open Accounts
Foreign investors in the Free Economic Zone may open their own foreign exchange and ruble accounts in banks of the zone, and have the right to utilize their funds throughout the territory of the Russian Federation in accordance with the legislation in force.
6. The right to exchange rubles
For the purpose of remitting abroad the proceeds obtained in the form of profits from the economic activity in the territory of the free economic zone, it is possible to purchase foreign currency in accordance with the prevailing rates of exchange between the ruble and the foreign market.
7 Mortgages and Leasehold Rights
Domestic and foreign investors have the right to lease property and property rights, and in the event of the adoption of the Law of the Russian Federation on mortgages on property and real estate, the right of use may be transferred by mutual consent of the parties to a lease agreement or by mutual consent of the successors to the right. The right of use owned by the investor has the character of a mortgage.
Lease agreements with foreign investors for the use of land, other natural resources and facilities may be modified only by mutual consent or by a court decision.
8 Mechanism of business relations
Economic relations in a free economic zone are based on the principle of Minamata. Enterprises in free economic zones can independently and autonomously formulate production plans and sell their own products. The products of the enterprises in the free economic zones are entirely at their own disposal.
9 Mechanisms of labor relations
Labor relations, including issues of hiring and firing, the system of labor breaks, social security and allowances, are regulated in enterprises of the Free Economic Zone in accordance with the legislation in force in the Russian Federation by collective contracts (agreements), labor pacts (contracts). The amount of labour spares and wages, material incentives, as well as other incomes, including foreign exchange earnings, are determined by the enterprises and organizations themselves on the basis of their own funds. The oblast soviets have the right to use their own foreign exchange funds for the above purposes. Labor wages and other social guarantees for employees at all levels may not be less than the minimum established by the laws of the Russian Federation.
(4) System of Tax, Customs and Other Preferential Policies
1) Taxation
Foreign-invested enterprises established in free economic zones with foreign capital amounting to more than 30% of their legal funds are granted the following preferential tax treatment;
A. Income tax on the profits paid to the budget of the Jewish Autonomous Oblast does not exceed 15%.
B. The tax on the portion of the profits remitted abroad does not exceed 10%, if not provided for by another international agreement.
C. Complete exemption from income tax on profits and from tax on the part of profits repatriated abroad for a period of five years from the time when the enterprise receives stable profits;
D. Exemption from tax on the part of profits used for reinvestment in the development of the social affairs of the free economic zone and in the projects for the construction of the infrastructure as determined by the oblast councils of people's deputies;
E. Exemption from taxation of the part of profits used for reinvestment in projects for the development of the social affairs of the free economic zone and the infrastructure as determined by the oblast councils of people's deputies. foreign enterprises and enterprises whose share of foreign capital does not exceed the statutory 30%, the part of the reinvested profits used for the development of the social infrastructure of the free economic zone is also exempt from taxation.
②Customs regime
A special customs regime is applied in the territory of the free economic zone, the provisions of which are as follows;
A. Imported and exported goods and other property of the free economic zone are exempted from customs duties. Merchandise and property transported from the free economic zone to the Russian Federation in its transit zones are subject to customs duties only on foreign merchandise, the country of origin of which is determined in accordance with the relevant regulations.
B. Imported goods and other property from the free economic zones must be declared;
C. Transit transportation through the free economic zones and other regions of the Russian Federation or resale of goods not processed in the free economic zones, as well as exported goods supplied by other regions of the Russian Federation are subject to the Customs Tariff Code.
3) Quotas and Licenses
Exports of goods produced in the territory of the Free Economic Zone are not subject to quotas and licenses, except for goods subject to intergovernmental agreements. Products whose value added is not less than 30% can be considered as products produced in the Free Economic Zone. Imports of goods and services for use in the free economic zone are not subject to quotas and licenses, except for goods subject to special regulations. Imported goods and then shipped to other parts of the country in accordance with the *** the same principle;
4 enterprise registration
Foreign-funded enterprises can be registered directly in the free economic zone.