28.04.2015 Alina Kozmina, Anastasiya Samusenko, Maxima Legal associates

New Measures aimed at Stimulation of Social and Economic Development in Russia

Three federal laws focused on stimulation of social and economic development of the Russian Federation have been recently passed. The laws are aimed at increasing the volume of foreign investments and creation of competitive industry on the territory of the Russian Federation.

The law “On industrial policy in the Russian Federation” coming into a force on June 30, 2015 mentions the main measures, taken by the Government for economic change-over to innovation type of development. Such measures, particularly, include creation of state funds for development of industry (financial support), creation of state information industry system (informative and consulting support), assistance in export and etc.

The law also provides a new form of cooperation of the state with the private sector – conclusion of the special investment contract on creation, modernization or development of industrial production in the Russian Federation by an investor. Such special investment contracts in addition to measures stimulating investors’ activity in the industry guarantee stability of a tax burden for investors as well as protection from consequences of changes in legislation which worsen the investors’ position. As mentioned in the explanatory note, the main difference of such special investment contract from the public-private partnership agreement and concessionary agreement is that the government doesn`t invest the budgetary funds or public property and consequently the government doesn`t receive the title to the object. The special investment contract pursues absolutely another goal – to provide an investor with favorable conditions for realization of a capital investment project.

The laws “On development of the Crimean Federal district” and “On the territories of rapid social and economic development” provide investors with an attractive legal regime for their activity on the respective territories. That means simplification of entry procedure to the territory of Crimea for foreigners, the establishment of free customs zone and also a special regime for doing business for investors, having concluded a contract on the conditions of business activity in the free economic zone. The mentioned regime of business activity involves the provision of special regimes of taxation, subsidy assistance for an investor, urban planning and land-use (since January 1, 2017), and also the provision of the guarantees connected with consequences of changes in legislation which worsen investors’ position.

The law "On the territories of rapid social and economic development" has come into force on March 30, 2015. In accordance with its provisions, a special legal regime of the territories of rapid social and economic development has been established for 70 years and includes the features of realization of labor, medical, educational and business activities. Such territories will be managed by the supervisory board, which includes representatives of state bodies and by a manager company which will conclude agreements with investors about the implementation of activities and act as a developer of the infrastructure objects on the respective territory.

Investors are expected to be provided with special conditions of taxation, preferential rental rates, the free customs zone and other special conditions.