Special economic zones in the Far East: current state and prospects

25.04.2016

At the moment on the territory of the Far East there are three special economic zones (SEZ): port "Sovetskaya Gavan", tourist and recreational "Russky Island", industrial and production "Vladivostok". The status of the resident in these SEZ allows to use various economic privileges and preferences including the lowered income tax (0 or 2% in the federal budget and 0-13,5% in regional), lack of the property tax and transport tax (till 10 years), land tax (till 5 years), the lowered rate of insurance premiums (14% compared to 34% in the Russian Federation) and existence of free trade regime.

However the format of special economic zones widespread mainly in the European part of Russia, was inefficient in the Far East. So, in the SEZ "Sovetskaya Gavan" and "Russky Island" created in 2010 there was no any resident by the end of 2013 that is, according to the legislation, allowed the state agencies to stop existence of these zones ahead of the schedule. However the government was not going to refuse the idea of these strategically important territories development, therefore the decision to develop a new format of the macroregion development which would consider specifics of its geography and economic and social situation has been made for investors attracting to the Far East .

Territories of advanced economic development (TAED or PDA) became such format, the law has come into force on March 30 last year. The term of the created zones existence is 70 years, and if necessary it can be prolonged (unlike SEZ for which such opportunity is not provided). Now on the territory of the Far East it is officially declared creation of 12 territories of the advancing development, including "Khabarovsk", "Komsomolsk", "Nadezhdinskaya", "Beringovsky", "Industrial park of "Kangalassa", "Mikhaylovsky", "Priamurskaya", "Belogorsk", "Kamchatka", "Bolshoy Kamen", "Gorniy Vozdukh" and "Yuzhnaya".

The main difference of a new format from special economic zones is that TAEDs are created concerning specific investors with whom individual work is conducted. For each territory the list of economic activity types which can be carried out by the resident companies is defined by the power. They are providede essential privileges for the providing of which it was necessary to make corresponding changes to codes of the Russian Federation – civil, town-planning, labor, land and forest. Among the provided advantages there is a specific mode of land use and taxation (income tax from 0 to 5%, lack of property tax within the first 5 years), preferential rates of the rent (0,4 from basic), preferential connection to infrastructure facilities, customs privileges, the simplified order of qualified personnel attraction, etc.

However some moments stated in the law "About Priority Development Arear" cause criticism. In the first 3 years of action of this normative document PDAs can be created only in the Far East or in monotowns. It can lead to the fact that Siberian Federal District which is closely connected with regions of the Far East will inevitably begin to lag behind their development and will not be able to provide the increasing economic and logistic requirements of PDAs.

Other disputed issue is restrictions lifting of foreign citizens attends employment in the company, being residents of PDAs. So, such employees do not require obtaining the work permit, and also the Russian quotas on foreign experts entrance do not extend to them. Considering proximity of the region to the Asian countries with cheaper labor, locals are afraid of sparsely populated territories development of the Far East by migrants from the Pacific Rim.

Meanwhile investors show considerable interest to the existing 12 PDAs: at the moment 108 applications from potential residents for the sum of 444 billion rubles have come to the management company "Corporation of the Far East Development" JSC ("CFED" JSC ). In its turn, "CFED" JSC is ready to involve business firms into creation and arrangement of PDAs: on the platform of state procurements tenders for development of documentation on planning of PDA "Komsomolsk" (21,1 million rubles), "Nadezhdinskaya" (101,2 million rubles) and "Khabarovsk" (73,4 million rubles) are placed now. By 2017 4,1 million rubles from the federal budget will be allocated for these territories creation, and on construction of engineering and transport infrastructure at the expense of regional and municipal budgets funds and about 3,5 more billion rubles will be required from private investors.