June

Moscow Investment Digest June 2016

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DEAR COLLEAGUES!

The Moscow Department of Investment and Industrial Policy in cooperation with the Moscow City Investment Agency presents you the next digest of the main investment events in the capital.

Moscow is in the Top-10 in Russia’s Investment ranking

Moscow has risen in the ranking and is now No. 10 in the Investment Ranking of Russian regions.

Natalya Sergunina, Deputy Mayor of Moscow, says that the city’s higher placing in the national ranking reflects the work done by the Moscow City Government over the last five years. The Government has worked to simplify and speed up administrative procedures, to introduce

e-technologies and develop a system of benefits and other measures to support entrepreneurs and investors.

Foreign investors take an interest in Moscow

On 16 June, at the St. Petersburg International Economic Forum, the Moscow City Government held a meeting with inter-

national industrial and other companies. The meeting’s participants discussed with Natalya Sergunina, Deputy Mayor of Moscow, the capital’s investment advantages over other major cities in the world and the Moscow City Government’s key initiatives to stimulate investment in the economy’s real sector. About 50 companies took part in the meeting, including PepsiCo, ABB, Renault, Schneider Electric, Samsung, Phillips, Abbott Laboratories, Airbus Group, and others. Managers from companies that already enjoy such preferences, such as PepsiCo and Renault, spoke highly of the Moscow City Government’s support, noting that it stimulated investment and was conducive to manufacturing development.

In order to establish a dialogue with investors, the Moscow City Government plans to hold such meetings in form of as discussions regularly and to assist in starting up and doing business in the capital.

Photos from the event can be found in the Media section.

Investment growth against the background of a general drop in Russia

In the difficult economic situation on the global and domestic markets, Moscow still remains Russia’s principal centre for attracting investment. While investment activity in Russia in general dropped by 4.8% in January-April of this year compared to the same period in 2015, the capital demonstrated a growth of 0.5%.

Recently, Moscow gained an additional competitive edge on the global investment market: in January–June 2016, the dollar costs of running a business were 30-60% lower than in January–June of 2014, particularly for high-tech businesses, manufacturing facilities and export-orientated investors.

Additional Support for Industrial Parks

In late May, the Moscow City Government approved the terms and procedure for granting industrial park status to Moscow enterprises.

Enterprises that have confirmed their compliance with the requirements set by the Ministry for Industry and Trade of the RF for industrial parks can apply for additional support from the Moscow City Government. The support includes reduced rates on property, profit and land taxes and rent payment preferences.

The overall reduction in taxation for the management company of an industrial park, and also for residents and real estate owners on the park’s territory, is 25%. In particular, industrial park status allows them to reduce the profit tax they pay into the Moscow City budget by 25% (13.5% instead of 18%), exempts them from paying property taxes and essentially exempts them from paying land rent: the payment is reduced by 99%.

Industrial parks are industrial infrastructure facilities that are priority investment projects, as are industrial complexes and technoparks. In essence, these are manufacturing facilities that require common technological and logistical chains. In terms of scale, management structure and the economic requirements set for them, industrial parks are comparable to technoparks but, in their work, they are closer to industrial complexes.

Detailed information on the criteria and procedure for obtaining industrial park status is available on Moscow’s Investment Portal www.investmoscow.info in the Measures to Support Existing Enterprises section. Information is also available there on obtaining industrial complex status and technopark status and on the mechanism for supporting new investment projects.

New Status for Moscow Enterprises

In June, the Moscow City Government granted the status of industrial complex and of technopark to four more companies. CJSC Bakery Plant No. 24 and OJSC MTZ TRANSMASH now hold industrial complex status, and Managing Company Fiztekh-21 LLC and RC Module LLC now hold technopark status. Moscow has a total of 22 technoparks now.

Last month, ten companies received support through the new mechanism. All the ten companies together occupy about 50 hectares, employ 13.3 thousand people, are investing over

10.7 bn RUB over 5 years and have an annual payroll budget of more than 8 bn RUB.

The tax burden for the enterprises will, on the whole, be reduced by 17-25%.

Information on the application procedure for obtaining industrial complex status and technopark status, tax reductions and rent preferences and the relevant legislation are also available on the Investment Portal.

Topical investment facilities in Moscow

In June 2016, Moscow put up for sale a unique monument of Constructivist architecture: the Narkomfin building, a six-storey edifice built in 1930 by Moscow architect Moisei Ginzburg. The overall non-residential space in the residential building at 25 Novinsky Boulevard, bld. 1 is 1.6 thousand square metres. The starting price of the sale is 101.4 m RUB. Applications may be submitted up to 26 July 2016 and the auction is scheduled for 19 August 2016.

Currently, the city is also selling its shares in the registered capital of Transfer Hub Lefortovo LLC (starting price 31.7 m RUB), Transfer Hub Seligerskaya CJSC (starting price 62 m RUB) and JSC Transfer Hub Rasskazovka (starting price 74.4 m RUB). The deadline for submitting applications is 18 July.

Currently, Moscow Investment Portal lists information on over 4,000 land and property auction lots. The complete list of lots is available in the Auctions section.

New Possibilities of the Investment Portal

The Investment portal now has a single section bringing together all the services intended for facilitating doing, saving investors’ time, and making communication with the city’s top management more efficient. Currently, there are ten services, including applying for industry support measures: obtaining Industrial Complex Status of Technopark Status; applying to set up a business on the territory of Moscow’s technoparks and technopolises; signing up to view the facilities put up for auction; submitting applications and investment initiatives to the Moscow City Government, and many others.

Before the end of 2016, assistance will be set up for future auction winners; the portal will also include tax services.

Investment proposals and initiatives on collaborating with the Moscow City Government may be sent to the Moscow City Investment Agency (11-1 Novy Arbat St., 119019, Moscow, Russia, phone: +7 (495) 690-0000, fax: +7 (495) 691-0506, email: investmoscow@mos.ru).

To contact the city’s top management, you may also use the Direct application line.

THANK YOU FOR YOUR ATTENTION!

With respect and hope for cooperation,

Moscow Department for Investment and Industrial Policy

www.mos.ru/dipp

Moscow City Investment Agency

www.investmoscow.ru

Supplier Portal

www.zakupki.mos.ru

The digest archive is presented at the Moscow Investment Portal.

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