RESIDENT OF FREE PORT OF VLADIVOSTOK: OBTAINING RESIDENT STATUS IS VITAL TO CUTTING COSTS SIGNIFICANTLY
23 May 2016
Free Port of Vladivostok is one of the most attractive and convenient ways to do business in the Far East. Its management company has already received 69 official requests from investors, totalling more than RUB 150 billion. Almost 20,000 new jobs are to be created. Residents think highly of the preferences and benefits on offer, according to a press release from the Ministry for the Development of the Russian Far East.
“The free port regime is an actual evolution, in spirit and meaning, of the concepts and provisions laid down in the law on priority development areas concerning the specifics and transit-logistics potential of South Primorye,” head of the Ministry for the Development of the Russian Far East Alexander Galushka underlined.
The first residents of the Free Port praise the significant reduction in bureaucratic formalities impeding business. “We worked four months together with the Far East Development Corporation and Ministry for the Development of the Russian Far East. This may seem a long time, but we understand that we were the pioneers used to refine many legislative rules that will soon be permanent for residents to come. We deliberately risked this and my key expectations at present are not so much related to the tax reduction, since this is still in the future. Now we are going to make use of the proposed simplification of administrative procedures, above all in relation to land,” stated General Director of OOO Aviapolis Yankovsky, Konstantin Bogdanenko.
The simplified tax regime is mentioned separately by OOO Avesta. “We assess positively all the new initiatives and preferences to be granted to new investment projects. Social tax, property and income tax breaks are of great benefit to investors,” project director Sergei Khodov emphasized.
“Obtaining resident status is vital to cutting costs significantly cuts in expenditures. Moreover, as we deliver this project, we’ll fill a free niche in catching sardines, mackerel, Japanese anchovy and Pacific squid (calamari) – something the government has long been asking us for. We applied to Free Port of Vladivostok for two of our companies: one will be catching fish and another will process it. We are going to sell the finished products on the domestic market across the whole of Russia,” said the Head of OOO Khoral DV, which was recently was granted Free Port resident status.
In the opinion of Alexei Boiko, General Director of OOO Zima Yuzhnaya, “the funds released owing to tax breaks enjoyed by residents of the Free Port give us a chance to build more socially significant facilities.”
Other companies are positive that the tax breaks and other privileges will allow resident companies to use the funds thus released for modernizing and expanding their enterprises. “The project for refrigeration infrastructure revamping at the port has repeatedly been discussed and put off. We were restrained by economic realities making it unprofitable. The privileges and preferences we’ll get as a resident of Free Port of Vladivostok were a good incentive for us to apply to the Corporation. Thanks to expansion of refrigeration, we’ll be ready both to meet the current needs of the Russian market and to increase transshipment volumes if fish consumption in this country grows,” said Member of the Board of Directors of OOO Vladivostok Sea Fish Port Denis Sarana.