As reported by minvr.ru, the member of Social council of Ministry for Development of Russian Far East, the Board Chairman of East Mining Company Limited Mr.Oleg Misevra considers that ‘Free port Vladivostok regime and priority development areas as well as business support institutes create unprecedented conditions for Russian Far East businessmen’.
- We have already established a company in Sakhalin and it undergoes another development stage. Uglegorsk district, where we currently work, is governed by Free port regime and we are planning to use all the benefits of this regime. Priority development areas and Free port regimes are crucial in terms of business support. We are planning to invest around 400 mln.USD in the construction of new port and conveyor line from the field to the port. Free port regime provides unprecedented tax benefits, including profit tax and property tax privileges as well as social contributions. Practically we are exempt from all the taxes save for VAT. This is a very good mechanism. Priority development areas and Free port Vladivostok are unprecedented business support measures. Apart from tax benefits, we have privileges related to priority rights to land plots and quick documents execution procedure. Far East Development Corporation makes efforts to create comfortable business environment to get the most of all the existing mechanisms. In general we have created perfect business development conditions. Any investor in the Far East, operating in any of the stated areas, provided it has a proper business model, would never get more favorable conditions anywhere else, – tells Misevra.
According to Mr. Misevra Far East has other relevant objectives related to infrastructure development and creation of optimal social environment.
- Proper environment is crucial for any successful business. The biggest challenge of the Far East is infrastructure. Although the Far East is close to the world center of economy and trade, our railway, road, energy and port infrastructure is poor. We would like to draw the government’s attention to this. We are supported in terms of company start-up, however we need economic rationale. Please note that we are working with the government on this issues and it meets our business needs, considering each project individually, but general infrastructure should be created for all the projects without exception and should be comfortable for the Far East, – specifies the investor.
According to him the Far East should be a comfortable place to live in, then it will be easier to engage employees.
The Far East is not a densely populated territory. When you have a start-up and need a thousand of new employees, it’s not that easy to find them. Initially we bring specialists from other cities to launch and push the project and further on we create our own manpower base. We are part of coal industry. We have to pay double to bring people to the Far East. Why should an employee go abroad if he has for instance Kuzbas nearby with all the infrastructure, including social area. Social infrastructure is a big challenge for the Far East. Our people should be happy to stay here and newcomers should wish to live and work here, – considers Misevra.
Keep in mind that in terms of investment projects investors can use tax benefits and administrative privileges of Priority development areas and Free port Vladivostok regime. The investment climate is one of the most favorable in Asia-Pacific Region, including benefits in getting land plots, free infrastructure, ‘single window’ regime, free customs zone procedure, shorter tax inspection terms, unscheduled inspections only as agreed with PDA management company and FP. Tax benefits include profit tax holidays (within the first 5 years the rate doesn’t exceed 5%), five-year corporate property tax and land tax holidays, reduced premium rate for investment projects, mineral extraction tax decreasing coefficient and streamlined proceedings in terms of value-added tax reimbursement.