RF Government approves package of bills on privileges for Arctic investment projects
At its meeting held on 30 January 2020, the Government of the Russian Federation approved the package of bills foreseeing privileges for investors in new Arctic projects. The laws have been drafted by the Ministry for the Development of the Russian Far East and Arctic together with the Minister of Energy, says the former Minister.
“The laws should create favorable conditions for the attraction of investments to the Arctic, for the development of unique fields and, consequently, for facilitation of the Northern Sea Route development and, of course, generation of new jobs”, said Prime Minister Mikhail Mishustin.
Key provisions of the bills focused on creation of more favorable conditions for private investments in the Arctic zone of Russia, generation of new jobs, and, as a result, improving the quality of life in the Arctic with the current population of 2.2 million people were presented at the meeting by Aleksandr Kozlov, Minister for the Development of the Russian Far East and Arctic.
According to the draft laws, any company or entrepreneur registered in the Arctic and ready for implementation of a new investment project or launching of a new business as well as investing at least RUB 10 million in any territory of the Arctic zone will be provided with a status of a resident offering a number of tax privileges and opportunities not related to taxes.
According to Aleksandr Kozlov, the new documents particularly provide for expansion of the most preferential tax treatment applicable to the shelf where oil production is charged at a rate of 5% for 15 years.
“In view of the offered tax privileges, the Ministry expects the launching of at least 5 projects with total investment s of RUB 1.77 trillion”, said Aleksandr Kozlov.
The new regulations are also aimed at supporting construction of ports, production facilities, etc. A zero tax rate on profit is foreseen for such projects throughout a decade. Besides, the draft laws foresee a zero VAT on export cargo transportation services including icebreaker assistance. That will facilitate involvement of the Northern Sea Route.
Among the privileges not related to taxes, is establishment of a free customs zone and a round-the-clock operation of check points, simplified procedure for providing investors with plots of land, reduction of inspections and protection of investors’ interests at court.
Within a short period of time, the documents will be submitted the State Duma for consideration.
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