The Moscow Department of Investment and Industrial Policy and the Moscow Investment Agency present you the next digest of the main investment events in the Russian capital.
"Moscow is the first region of the Russian Federation to start using an offset contract mechanism for import substitution. Since 2017, 5 agreements have been signed with the business. One is for the production of food for urban dairy kitchens and four are in the healthcare sector. The total volume of investments in projects will amount to RUB 12.9 bn. The city will purchase products worth RUB 72.7 bn from manufacturers," said Vladislav Ovchinsky, Head of the Moscow Investment and Industrial Policy Department.
Thus, according to agreements in pharmaceuticals, investors localize the production of medicines and medical products for ostomy patients in the city. At the same time, under two contracts, the Biocad and Gemamed companies have already begun shipping medicines and medical products to medical institutions and patients.
The offset contract is concluded for a period of up to 10 years, the minimum investment amount is RUB 1 bn, and the supplied goods must be of Russian origin. According to Artem Barashev, Director of the Moscow Investment Agency, the capital is currently preparing a draft law with the federal authorities, which suggests lowering the minimum investment threshold to RUB 100 m. It is possible to involve significantly more domestic suppliers. In addition, in order to support the capital's business in the terms of sanctions, the Moscow Government decided to extend the practice of offset contracts to all areas of urban economy.
"In the first quarter of 2022, the city decided to lease almost 37 ha of land to developers without bidding for the implementation of 20 large-scale investment projects. It is significantly more than in the same period last year, when about 22 ha were allocated for the creation of 13 facilities," said Vladimir Efimov, Deputy Mayor of Moscow for Economic Policy and Property and Land Relations.
Industrial complexes, innovation centers, social institutions, transport, sports and other facilities can get land without bidding. For its construction, the city provides land plots for rent for a period of 5 years. So, this year Moscow decided to provide 1.8 ha of land in the Rudnevo industrial zone for the construction of an industrial complex and 0.9 ha in the Pohodny passage for the enterprise for the production of architectural concrete.
"A land plot located in the North-Western District of Moscow will be transferred to an investor without bidding for the construction of a plant as part of the import substitution of construction materials. The planned volume of investments will amount to RUB 250 m, about 110 workplaces will be created there," said Vladislav Ovchinsky, Head of the Moscow Department of Investment and Industrial Policy.
High-tech enterprises for the production of construction materials will be opened in Zelenograd. The investor will create an industrial park on a plot of about 36 ha. The developer will receive land from the city without bidding as part of a large-scale investment project.
"The Moscow Urban Planning and Land Commission, headed by Sergei Sobyanin, decided to grant the developer land in the Zelenograd administrative district for the construction of an industrial park. It is planned that he will invest RUB 14.5 bn in the project and create more than 1,900 workplaces," said Vladimir Efimov, Deputy Mayor of Moscow for Economic Policy and Property and Land Relations.
According to the project, the investor will construct a production complex with administrative, demonstration and retail areas. High-tech enterprises for the production of building materials, research laboratories, an engineering center, a training center and an exhibition area for the development of the industrial and construction industry of Russia will be located there.
More than 30 social infrastructure facilities are planned to be built during this year in the Troitsk and Novomoskovsk administrative districts (TiNAD). Investors will build 19 kindergartens, 16 schools and 3 polyclinics. This will provide the new districts with 4,380 places for pre-school children and 9,650 places for schoolchildren.
Schools and kindergartens will meet all modern requirements and standards for the design, construction and equipment of educational institutions. There will be equipped halls for classes, clubs, methodical offices, medical offices, changing rooms, buffets, full-cycle kitchens.
In the next three years, investors plan to introduce 69 educational facilities in TiNAD. The integrated development of these territories involves the construction of 52 kindergartens and 46 schools by 2035.
"The accumulated volume of investments from the Member-States of the Eurasian Economic Union (hereinafter — EAEU) in the Moscow’s economy amounted to USD 2.8 bn. Companies from the Republic of Kazakhstan invested USD 1.6 bn, investors from the Republic of Belarus — USD 820 m, from Armenia — USD 242 m, from Kyrgyzstan — USD 60 m. Over 5 years, the accumulated volume of investments from the EAEU countries in the Moscow’s economy has grown 2.6 times. This growth is facilitated by cooperation between the countries of the EAEU, as well as favorable conditions for the projects’ implementation in Moscow. These are preferences and benefits for the construction industry, developed infrastructure for opening and doing business," said Vladimir Efimov, Deputy Moscow Mayor for Economic Policy and Property and Land Relations.
For the period from October 2020 to September 2021, the Republic of Belarus became the leader in terms of investment growth in the capital: the volume of foreign direct investment increased by 60%. Investments of Kyrgyz business in the Moscow’s economy increased by 16%, Armenian – by 9.6%, Kazakh – by 5.1%.
"The turnover of Moscow's foreign trade with the EAEU countries last year amounted to USD 24.96 bn. This is by 41.2% more than in 2020. Moscow's exports to the EAEU countries increased by 49% and reached USD 16.75 bn. The volume of imports from Armenia, Kyrgyzstan, Belarus and Kazakhstan increased by 27.7% over the year: in 2021 it amounted to USD 8.21 bn," said Vladislav Ovchinsky, head of the Moscow Department of Investment and Industrial Policy.
"According to the latest data of the Bank of Russia, over 5 years, the accumulated volume of investments from Israel has almost tripled and as of October 1, 2021 amounted to USD 280 m. Over the past year, the country has increased its participation in the Moscow companies’ capital by 15.1%. The trade turnover with Moscow has also grown: by the end of 2021, it amounted to USD 797.3 m, which is 7.1% more than in 2020," said Vladimir Efimov, Deputy Moscow Mayor for Economic Policy and Property and Land Relations.
Vladislav Ovchinsky, head of the Moscow Department of Investment and Industrial Policy, said that over the past two years Moscow has been actively developing exports of agricultural products to Israel. Thus, by the end of 2021, the volume of the capital's agricultural products deliveries to this country amounted to USD 37.94 m, which is 11% and 45.5% more than in 2020 and 2019, respectively. At the same time, the share of agro-industrial products in Moscow's non-primary non-energy exports is 69.4%.
Today Moscow offers various preferences to foreign businesses that are ready to localize production in the city: benefits on income taxes, land, favorable conditions for renting territories, exemption from customs duties and more. According to the director of the Moscow City Investment Agency Artyom Barashev, the enterprise placement in Moscow will reduce the cost of transporting products, production costs due to the possibility of using local components, as well as gain access to a large market for products.
"As of October 1, 2021, the accumulated volume of investments from Belarus to Moscow amounted to USD 820 m. Over 5 years, investments have grown 7.6 times, and from October 2020 to October 2021 increased by 60%. Belarusian companies invest in trade, real estate, transport and logistics, industrial production," said Vladimir Efimov, Deputy Moscow Mayor for Economic Policy and Property and Land Relations.
Today in Moscow there is an office of the "Savushkin Product" company — the leader of the Belarusian dairy industry, as well as the official representative office of the Belarusian enterprise "Keramin" – one of the largest companies in Eastern Europe for the production of ceramic tiles, porcelain stoneware, sanitary ceramics and ceramic bricks.
"In 2021, the volume of trade turnover between the Moscow and Belarus amounted to USD 17 bn, which is 44.4% more than in 2020. Last year the volume of exports from Moscow to Belarus reached USD 11.2 bn, which is 57% more than in 2020. The volume of imports from Belarus to Moscow amounted to USD 5.8 bn, which is more than a quarter higher than in the previous period," said Vladislav Ovchinsky, head of the Moscow Department of Investment and Industrial Policy.
In 2021, the volume of non-primary non-energy exports to the United Arab Emirates (hereinafter — UAE) exceeded RUB 34.5 bn. Medicine and pharmaceuticals have become one of the most popular categories. Together, they provided about RUB 15 bn of total exports to this country. In particular, Moscow supplied vaccines and diagnostic reagents.
"Moscow accounts for 26% of all-Russian non-primary non-energy exports to the UAE. This is a promising area for doing business; industry is actively developing in this country. Moscow companies managed to react to the demand and occupy their niche in this market. For example, in 2 years the volume of industrial exports has increased almost 10.5 times," said Vladimir Efimov, Deputy Moscow Mayor for Economic Policy and Property and Land Relations.
Moscow exporters can find partners in the UAE market with the help of a free customer selection service. Companies receive contacts of potential importers with whom initial negotiations have already taken place.
In Moscow, the first contract on the provision of land for 5-year rent at a preferential rate of 1 RUB/year for the large-scale investment project implementation was signed. The plot is located in the Nagatino-Sadovniki District. An engineering building with an area of almost 10,000 sq. m. will be built on it. The facility will become part of a research and production enterprise that develops electronic components, designs and manufactures high-tech systems.
Support measures for owners of non-stationary retail facilities (hereinafter — NRF) were also approved. Entrepreneurs will be able to pay for the right to work in 2022 at last year's rates, as well as carry over payments for the second quarter until December 31, 2022. Moscow will also reduce the amount of security payments for NRF owners. In addition, they can extend trade agreements until December 31, 2023 without bidding.
The Moscow Government subsidizes interest rates on loans to replenish working capital (up to RUB 500 m) and for the implementation of development programs (up to RUB 1 bn). The lending rate for end borrowers, including previously approved loans, will be reduced from 15% to 11%. Two bakery enterprises and one pasta manufacturer have already become recipients of preferential loans. The amount of compensation is RUB 60.5 m; the total amount of loans is RUB 747 m.
At the end of the month, 78 tenants of land plots, for which the purpose of granting was changed to construction, applied for the city’s support. The companies received a delay in payment of lease payments for the second quarter for 6 months. In addition, a payment deferral was granted to 14 owners of sites with a modified type of permitted use, providing for the construction and reconstruction.
Investors who have received land without bidding can cancel the progressive rental rate for a year. They will be able to save significantly when renting urban areas and, as a result, reduce the cost of their projects. 21 companies have already taken advantage of this opportunity; their savings will amount to RUB 549 m.
Industrial enterprises have submitted 44 applications for preferential loans to replenish working capital and implement investment projects. The total volume of loans under approved applications will amount to RUB 17 bn. Most of the loan funds, RUB 15.7 bn, will be used to replenish working capital, and the remaining part — for the investment projects implementation. Manufacturers of the food industry, cosmetics, mechanical engineering, pharmaceuticals, microelectronics and electrical equipment are among the first recipients of anti-crisis support.
The Moscow Government has also approved a program of preferential online lending to SMEs. They will be able to get online loans at the final rate of 13.5% (half of the Bank of Russia key rate plus 5 percentage points) for any purpose. The maximum loan amount will be RUB 5 m. The interest rate subsidy period is 9 months.
After special auctions for SMEs and self-employed specialists, entrepreneurs rented 83 non-residential premises from the city with a total area of 4,600 sq. m. for the first quarter of 2022. 56 of them are located in the above-ground part of the buildings, 27 - in the basements.
In January-March 2022, most real estate was rented at a special rate in the north-west (17 premises), south (15 premises), in the west (14 premises) of Moscow. In total, since 2017, entrepreneurs in this category have rented from the city on preferential terms 1718 objects with a total area of 91,000 sq. m.
For 3 months of 2022, the city concluded contracts for the non-residential real estate purchase and sale with a total area of more than 30,000 sq. m. The largest number of real estate objects were purchased in the southwest, west and northeast of the city.
Some of the city objects were sold due to secondary methods of selling city property. Since the beginning of 2022, 66 real estate objects with a total area of 8,600 sq. m. have been sold through a public offer. Through sales without an announcement of prices, at which the investors themselves determined the value of real estate, 55 objects were sold. Their total area was 8,200 sq. m.
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Conference "Measures to support Israeli business in new economic conditions"
Department of Investment and Industrial Policy of the City of Moscow
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