Regulations for investment activity
on the territory
of Nizhny Novgorod
One of the major lines of work of Nizhny Novgorod authorities
is creation of a favorable investment climate.
The notion of investment climate incorporates a wide range of components,
such as:
-
regulations for investment activity;
-
tax system
-
removal of administrative barriers before investments;
-
support of entrepreneurship
Regulations for investment activity on the territory
of Nizhny Novgorod
-
Agreement between Government of Russian Federation
and Administration of Nizhny Novgorod Region for distribution of powers
in investment activity and structural policy of 08.06.1996.
In compliance with this Agreement, Government of RF and Administration
of Nizhny Novgorod Region welcome promotion of investment activity.
To secure development of Nizhny Novgorod Region, Administration of
Nizhny Novgorod Region shall offer guaranties in its bid to attract
investments and credits in any form, not contradicting Legislation
of RF, as well as shall take all the necessary actions to develop
regional economy and create a favorable image of Nizhny Novgorod Region.
-
Act of Nizhny Novgorod Region of 16.12.1996 ¹ 54-3
"Of guaranties for private investments in Nizhny Novgorod Region
"
It defines terms for investment activity of private investors on the
territory of Nizhny Novgorod Region as regards investment objects
and aims at the security of investors' rights.
-
Act of Nizhny Novgorod Region of 22.06.2000 ¹ 166-3
"Of state support of investment activity on the territory of
Nizhny Novgorod Region"
It defines legal and economic basis of state support for investment
activity on the territory of Nizhny Novgorod Region, stipulates forms
of state support for investment activity as well as its procedure
for governmental bodies of Nizhny Novgorod region, aiming at support
and development of investment activity, security of rights, interests
and property of investment activity participants. This act provides
investors with guarantees against unfavorable changes in Nizhny Novgorod
Region Legislation.
-
Enactment of Administration of Nizhny Novgorod Region
of 01.07.1997 ¹ 163 "Of the realization procedure of the Act
of Nizhny Novgorod Region "Of guaranties for private investments
in Nizhny Novgorod Region "
It asserts the Provision of the realization procedure of the Act of
Nizhny Novgorod Region "Of guaranties for private investments
in Nizhny Novgorod Region" to ensure practical economic and legal
as well as organizational conditions for development of investment
activity in the region. Furthermore, the enactment has put into operation
Commission with Governor of Nizhny Novgorod Region on assistance to
investment activity.
-
Enactment of Administration of Nizhny Novgorod Region
of 19.07.1997 ¹ 208 " Of measures for protection of investors'
and shareholders' property rights".
It aims at the improvement of protection of investors' and shareholders'
rights and refinement of services provided to them.
-
Enactment of Administration of Nizhny Novgorod Region
of 10.06.2002 ¹ 122 " Of the conclusion, registration, accounting
and controlling procedures for the process of investment agreements
implementation".
Defines the procedure of granting state support to businesses implementing
priority investment projects.
Possible types of state support:
1. tax remissions (profit tax, property tax, land tax),
2. investment tax credit,
3. state guarantees of Nizhny Novgorod Region,
4. real estate lease benefits
5. setting of minimum rental fee rates for land leasing
Provides investors with guarantees against unfavorable
changes in the Legislation of Nizhny Novgorod Region.
-
Enactment of Nizhny Novgorod City Duma of 26.04.2000
¹ 15 " Of support of investment activity in Nizhny Novgorod ".
Provides legal persons, investing own and/or borrowed funds, with
the following benefits:
1. property tax exemption as regards the municipal budget share (for
5 years),
2. reduction of the land tax as regards the land subject to investment,
3. reduction of land rent charge as regards the municipal budget share
(for 3 years).
The compulsory condition for tax benefits is the
conclusion of an investment agreement with City Administration of Nizhny
Novgorod.
-
Enactment of City Administration of Nizhny Novgorod
of 12.05.1999 ¹ 62 "Of measures for realization of the Act of
Nizhny Novgorod Region "Of guaranties for private investments
in Nizhny Novgorod Region ".
This Enactment organizes Commission for investment activity assistance
to regulate investment processes, realize rights and guaranties of
Nizhny Novgorod investors. The municipal program of investment activity
stimulation is also under development.
-
Enactment of City Administration of Nizhny Novgorod
of 04.10.2000 ¹ 68 " Of the mechanism of realization of the Enactment
of Nizhny Novgorod City Duma of 26.04.2000 ¹ 15 " Of support
of investment activity in Nizhny Novgorod ".
It sets the basis for the provision of benefits to users of investment
objects on the territory of Nizhny Novgorod by conclusion of an investment
agreement with City Administration of Nizhny Novgorod.
Investment agreement terms:
1. the total sum of an investment project shall equal not less than
$1 mln.,
2. an investment project shall complete prior 3 years period starting
from the date of signature of the investment agreement.
The time limit of an investment project completion may be increased
up to 5 years provided that the investment total sum shall be not
less than $7 mln.
-
Decree of Administration of Nizhny Novgorod of 29.02.2000
¹ 603-p " Of organization of an expert selection of the investment
projects being realized on the territory of Nizhny Novgorod ".
Objective: creation of a database for investment projects subject
to prospective realization on the territory of Nizhny Novgorod, as
well as granting support to the most perspective and significant on
behalf of City Administration. For this reason, the decree fosters
creation of an expert council to select investment projects, being
realized on the territory of the city. Compilation of "the
list of investment projects of Nizhny Novgorod industrial enterprises".
Taxation of foreign investors
Taxation of foreign investors is exercised in accordance
with the legislation of Russian Federation currently in force.
According to article 246 of Tax Code of Russian Federation, foreign organizations
acting in Russian Federation via permanent missions and/or having sources
of income in Russian Federation, are recognized as profit tax payers.
Apart from this, it fixes differentiated rates for profit tax paid by
foreign organizations, not acting in Russian Federation via permanent
missions.
Besides, according to article 224 of Tax Code of Russian Federation, natural
persons having sources of income in Russian Federation and not being tax
residents of Russian Federation, pay natural persons income tax at the
rate of 30 % of all incomes.
Taxation preferred treatment for foreign investors is set by a number
of Russian legal acts. For example:
According to article 17 of Federal Law of 09.07.1999 ¹
160-ÔÇ " Of foreign
investments in Russian Federation ", subjects of Russian Federation
and local governments may provide foreign investors with benefits and
guaranties , finance and support a foreign investment project in any
other way at the expense of budgets of Russian Federation subjects,
local budgets and off-budget resources inside their competence.
-
Federal law of 25.02.1999 ¹ 39-ÔÇ " Of investment
activity in Russian Federation realized in the form of capital investments
" envisages state regulation of investment activity, in particular,
creation of favorable conditions for development of investment activity
by perfection of the taxation system, setting of non-individual special
taxation modes.
Elimination of excessive administrative obstacles
in the way of investments
In 2002 in Nizhny Novgorod Region, partnership program between Government
of Nizhny Novgorod Region and Department for International Development
of Great Britain (DFID) started realization of the project "Research
of administrative obstacles in the way of investments in Nizhny Novgorod
Region".
Project's objective: support Government of the Russian Federation in
its efforts to remove administrative obstacles on regional and federal
levels.
The project will make it possible to analyze procedures an ordinary
investor has to go through before investing, as well as cooperation
processes between entrepreneurs and various state bodies, including:
-
procedures for registration of a new enterprise (immigration
procedures for foreign investors, registration procedures for domestic
and foreign investors, acquisition of certificates from the antimonopoly
body, etc.);
-
procedures for making choice of a site for the future
enterprise (basic requirements for construction, allocation of land,
coordination of the project at the "primary stage", acquisition
of the authorization for construction, laying of communications, auditing
and acquisition of the authorization for start-up;
-
procedures for the realization of entrepreneurship
(cooperation with the fiscal administration , regulations for import/export
and currency transactions, certification of production, inspections
and audits by various state departments).
Project realization time limits: 2002 - 2004 years.
Project executives: Government of Nizhny Novgorod Region and Foreign
Investment Advisory Service, a joint service of International Financial
Corporation and World Bank. Starting from its creation, Advisory Service
has performed research projects in 120 countries; in 2000 it began to
analyze administrative obstacles in the way of investments in regions
of Russia.
Estimated result of research: the report containing recommendations
for state agencies to make use of while which can be used by bodies
of the government at carrying out of normative and legal reforms.
Business support
Nizhny Novgorod Region offers favorable initial conditions
to develop small business:
-
acts and enactments " Of state support of small
business in Nizhny Novgorod Region", " Of measures for overcoming
administrative obstacles during business development", "Of
introduction of the uniform imputed earnings tax";
-
infrastructure for business support : funds, leasing
companies, small business organizations, 15 branches of teaching and
business center " Morozovsky project ", technoparks, Nizhny
Novgorod Regional Chamber of small business and crafts (19 guilds)
and 3 branches in regions, the centers of support of business in cities
and the regional centers of area, more than 30 public organizations
of businessmen. As a whole Nizhny Novgorod Regions totals about 50
organizations of small business support.
|
