Within this article, we shall commence a new series of articles exploring “How To Conduct Economic Activities” in the Far Eastern and Siberian region of Russia!

The Free Port of Vladivostok (FPV) is a territory with special regimes of customs, tax, investment and additional regulations in accordance with the federal law of 13.07.2015 “Free Port Vladivostok”.

  • Within the FPV, tax incentives and administrative preferences apply for residents.
  • The resident connects itself to the required infrastructure.

The economic development of the Far Eastern region is recognized as one of the priority areas in Russia and with that in mind a whole range of measures are being taken to create a favorable economic, investment and business climate in the region.

The experiment to create a free port in the territory of Vladivostok has thus far been recognized as incredibly successful, so much so that the

In the Far Eastern region, the FPV regime extends to 22 municipalities in 5 regions, inclusive of:

  • Kamchatka Krai
  • Khabarovsk Krai
  • Primorsky Krai
  • Sakhalin region
  • Chukotka Autonomous Okrug

(Notice *) After the adoption of the FPV law, foreigners are entitled to visa-free travel for 16 days in any of the abovementioned regions. You can check the residents of which countries can use the visa-free entry via the link: https://evisa.kdmid.ru/en-US/Home/Index

China, Japan, the Republic of Korea, Mongolia and the DPRK are connected with the Russian Far Eastern region by land and sea.

 

SO, WHAT PRIVILEGES MAY FPV RESIDENTS RECEIVE?

1). Tax Privileges
(Notice*) Each region has its own tax privileges.

  • Income tax

For the first 5 years – 0%

For the subsequent 5 years – 12%
The preferential rate in respect of the regional component of the tax is established by the constituent entity of the Russian Federation

  • Land tax

For the first 3 years – 0%

The preferential rate is established by the municipality

  • Corporate property tax

For the first 5 years – 0,5%

For the subsequent 5 years – no more than 2,2%

The preferential rate is established by the constituent entity of the Russian Federation

  • Unified social tax

For 10 years – 7,6%

Contributions to the Pension Fund, the Social Insurance Fund and the Federal Compulsory Medical Insurance Fund have been reduced from 30% to 7.6%

(Notice*) Each of the five regions have introduced their own tax incentives. Inquire with our professionals in order to better understand the intricacies of the taxation environment.

2).  Administrative preferences
(Notice*) All residents receive preferences for the implementation of their projects

  • Exemption from quotas when employing foreign employees
  • Help desk service for investors
  • Possibility of applying the free customs zone (FCZ) procedure
  • Right of the management company to defend the resident in court

3). Additional preferences

  • Shortened terms of obtaining permits for capital construction projects – (less than 40 days.)
  • Duty-free and tax-free regime of the free customs zone for residents:

– Import, storage, consumption (use) of foreign goods.

– Export of goods (equipment).

– Import of foreign goods (equipment).

Expert review:

The tax preferences provided will allow residents to reduce the tax burden by more than 2 fold in the first 5 years of operation.

            HOW TO BECOME A RESIDENT OF THE FPV?

          1) You need to open a legal entity in one of the regions of the FPV!

2) Apply for obtaining resident status on the website: https://applicationform.erdc.ru/

(Notice*) The minimum investment for applicants for benefits for residents of the Free Port of Vladivostok has been reduced from 5 million rubles to 500 thousand rubles.
500 thousand rubles amounts to approximately 7000$

To register a legal entity in the territory of  the FPV, as well as to obtain the status of a FPV resident, please contact D’Andrea & Partners info@dandreapartners.com