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  • VLADIMIR PUTIN: THE RISE OF THE FAR EAST – OUR NATIONAL PRIORITY FOR THE ENTIRE XXI CENTURY

    01 September 2015

    The Russian President Vladimir Putin discussed the new economic policy of the Far East in an interview with the Russian news agency TASS and the Chinese news agency “Xinhua”.

    The head of state emphasized that the rise of the Far East is a national priority for the entire the XXI century. To achieve this large-scale objective a number of significant steps will be made. A program of economic and social development of the Far East and the Baikal region is actively being implemented today, which includes dozens of major investment projects. Among them, the construction of the pipeline “Power of Siberia”, the Vostochny cosmodrome, the scheduled “Gazprom” and “Sibur” projects for gas processing and gas chemistry, the modernization and expansion of the Trans-Siberian and Baikal-Amur Mainline, the “Zvezda” shipyard complex.

    According to the national leader, Russia is interested in attracting foreign, including Chinese investors to these projects. Thanks to the Federal Law “On territories of priority development in the Russian Federation”, a new tool was created for our country in general and for the Far East region, where the first nine of such areas have already been established.

    “The territories of priority development, along with special economic zones must become the locomotives of economic transformation of the Far East, a form of clusters attracting and accumulating investment and technology. In these areas, due to the scale of tax incentives and the simplification of business conditions, a preferential regime for investment and business activity is created, regardless of the country of origin of the capital,” – said the Russian President.

    He noted that residents of the TOR, in particular, will receive the following benefits: zero tax on income, property and land for the first five years; zero import and export customs duties; subsidies on loans; preferential rates of rent; alleviated conditions of state and municipal control. During the 10 years from the date of obtaining TOR resident status reduced rates of insurance payments will apply – 7.6 percent instead of 30. The value added tax on imports for processing will also be zeroed out.

    But as the head of state explained, the set of incentives does not end there. Domestic and foreign companies will be granted a tax holiday for the tax on extraction of mineral resources: the use of a discount factor (from 0 to 0.8 per cent) for 10 years. “There will be minimized administrative barriers. And most importantly, the state undertakes to create the necessary infrastructure. According to the calculations of the Russian Government, the total investment in only the first three priority development areas may exceed 50 billion roubles. Significant funds, about 7.5 billion roubles, are allocated from the Russian budget for their development,” – said Vladimir Putin.

    Separately, the President touched upon the prospects of realization of a Free Port of Vladivostok: “Investors expect no less than major changes in the south of the Primorsky District, where free port operations are established, covering the entire key ports of the region from Nakhodka to Zarubino, including, of course, Vladivostok”. The head of state reminded that the Law on the Free Port comes into effect in October 2015. The introduction of significant tax benefits are foreseen in the district – up to a zero rate on a number of taxes. Business conditions are facilitated as much as possible; including capital construction, in fact, a visa-free regime for foreign citizens is introduced. In addition, the territory of the free port will apply the procedure of a free customs zone, which means, in fact, the duty-free importation of foreign goods.

    “I am convinced that these new features will raise the interest of investors from China and other Asian countries to participate in the implementation of our plans, especially as a number of large companies have already proposed concrete investment projects. For example, Chinese partners are willing to invest more than one hundred billion roubles in the construction projects of oil refining and brick plants in the Amur region, bridge crossings of Nizhneleninskoye – Tongjiang and Blagoveshchensk – Heihe, steel and brick factories in Yakutia,” – the head of state summed up his vision of the development perspectives of the Far Eastern macro region.