On 29 November 2014, President Vladimir Putin signed Federal Law FZ-379/2014, which made Crimea, and the city of Sevastopol -which have recently become federal subjects of the Russian Federation- free economic zones for the next twenty five years. Those areas will be added to the other sixteen existing special economic zones throughout the Russian Federation, the most active of which are those of Kaliningrad and Nakhodka.
The free economic zone regime outlined by federal law FZ-379/2014 features both tax and customs benefits.
With reference to the tax incentives, investors will enjoy an exemption from the payment of certain state taxes for a period of ten years. As regards customs benefits, the import of machinery to be used for the performance of productive activity in Crimea will be allowed without having to pay any import duty. Benefiting from these advantages, however, is subject to the achievement of the status of participant (участник) in the free economic zone.
Such status can be achieved by individuals or by legal entities which are registered with Crimean taxation institutions and which have filed there an investment plan in accordance with the requirements of law FZ-379/2014.
In order to obtain the status of participant in the free economic zone, the law requires that the interested party invests at least three million rubles for the first three years of activity in Crimea (if it is a small or medium-sized enterprise) or at least 30 million rubles (for larger companies).
The mentioned federal law also provides the possibility to modify more easily the local planning regulations to allow granting the investors of the free economic zone land plots for purposes related to the conduct of productive activities in the region.
In addition to these incentives there are also simplified procedures for issuing entry visas to Crimea and for accessing the ports of the peninsula.
The recently adopted law shows the special attention that the Russian Government reserves to Crimea and is a harbinger for the major investments that, starting from 2015, will be made in the peninsula, which could well become one of the most important economic centres of the Russian Federation in the coming years.
(Trieste Office – Andrea Piras – 0039(0)407600281)
