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The Best Business Conditions are in the Arctic!

The Largest Special Economic Zone is Attracting More and More Entrepreneurs

16 октября 2020

The Deputy Prime Minister of Russia and Presidential Envoy to the Far Eastern Federal District, Yury Trutnev held an online session of the Presidium of the State Commission for Arctic Development They discussed issues of infrastructure support for investment projects, support for businesses on the part of development institutions, navigation along the Northern Sea Route, and the creation of an international Arctic station.

A total of 133 applications from investors are currently being prepared for a total investment of RUB 198 bn. Five businesses have been granted resident status in the Arctic Zone and have signed legally binding agreements for RUB 15.3 bn.

The Deputy Prime Minister noted that one of the key benefits for future Arctic businesses is the ability to take advantage of the lower insurance fees. In early September, the Russian Government passed a bill to subsidise insurance fees paid by residents of the Russian Arctic to create new jobs. The final rate is 7.5% for them and 3.25% for small- and medium-sized businesses. Trutnev emphasised that 'these are the best conditions in the Russian Federation'.

The Deputy Prime Minister noted that the Arctic regions are continuing to work on the regional component of the preferential system. Incentives for income, property and land tax though a simplified tax system are being approved.

According to the Russian Minister for Development of the Russian Far East and the Arctic, Alexander Kozlov, the Ministry is completing preparations for a new revision of the state development programme for the Arctic Zone. The Russian Government has decided to provide RUB 17 bn over the next three years, which is triple the amount of the previous three-year budget.

The Russian Government's national plan for restoring the economy includes measures to create a Fund for the Development of the Arctic. Yury Trutnev explained that, 'it is not a new development institution but rather a mechanism that will allow us to redirect 50% of the tax revenue of the federal budget from new investment projects in the Arctic to the social and economic development of the Arctic region'.

Investment projects that applied for infrastructure support from the government were considered. As the Deputy Minister for the Development of the Russian Far East and the Arctic Alexander Krutikov noted, the Russian Government approved the requirements for investment projects that can receive infrastructure support from the government. The total cost of the project must exceed RUB 300 mn. The project must create jobs by establishing a new facility or modernising an old one. The project must be registered and headquartered in the Arctic Zone of Russia. The project's insurance fees must compensate for the subsidy no later than 10 years after the selection process. The Ministry for the Development of the Russian Far East has already held a public selection process for investment projects. Following the results of the meeting of the State Committee for the Development of the Arctic, six investment projects received support, amounting to a total investment of over RUB 206 bn.

Читайте также The Arctic Council: Private Club or a Forum for Enthusiasts? How the 'Arctic G8' collectively decides the future of the region

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