Lipetsk Region -...
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Lipetsk Region presentation of the region Dear Sirs, Let me present Lipetsk region and to express hope that the acquired information will expand your conception about the possibilities and working conditions in our region Lipetsk region is one of the leaders of Russian regions in the volumes of attracted investments. Increase of the efficiency of investment process is key value for the future of the country and its regions. Our goal is to create the system of conditions which determine the favorable investment climate, to assist the investment and general culture of business, and also to assist reaching the best information security and safety of investment activities. Lipetsk region is open for realization of new ideas and new forms of cooperation. О. P. Korolev, Governor of Lipetsk Region Geography The Lipetsk Region is situated in the center of European Russia at the crossing of the major traffic arteries connecting the capital of the Russian Federation with South Russia and North Caucasus, and western areas of Russia with the territories along the Volga. Lipetsk has a moderate continental climate. The Region’s territory is about 24 thousand sq.km, that is, 0.14% of the Russian Federation (a little larger than the area of Israel but less than that of Albania). The Region stretches 200 km from north to south and 150 km from west to east. The population is 1.2 million people. The Region is divided into 20 administrative territories: two urban districts and 18 municipalities. The administrative center of the Region is the city of Lipetsk situated on the banks of the Voronezh River with population over 500 thousand people. The Region is a high plain with heights up to 262 m in the West and flat lowland plain in the East. It has mineral deposits of limestones, dolomites, sand, clay and raw cement materials and leads in raw carbonate materials stock in the Russian Federation. There are substantial peat deposits in the Region. Thick black earth occupies approximately 40% of the total territory of the Region while forests occupy about 9% of the same. The Region’s flora counts around 1,200 species including 40 tree and bush species. The territory of the Lipetsk Region includes areas with the preglacial relic vegetation such as Galichia Gora, Morozova Gora, Vorgolskie Skaly, Voronov Kamen, Plyushchan and Bykova Sheya. These areas comprise Galichia Gora natural reserve of the Lipetsk Region. The Region has a diverse wildlife represented by over 60 mammal species, 250 bird species, 30 fish species, 8 reptile species and 8 amphibian species. Thanks to its famous mineral springs and therapeutic muds discovered in 1871, Lipetsk has been known as a resort city for a long time. Lipetsk resorts have been operating since 1805. Lipetsk mineral springs were discovered as early as in the time of Peter I. Presently 13 mineral wells are exploited, with total water capacity of over 1,500 cub.m per day. History The Lipetsk Region was formed on January 6, 1954 by joining the outlying areas of the Ryazan, Voronezh, Kursk and Oryol Regions. They are native Russian areas populated hundreds of years ago. After the beginning of the Golden Horde’s invasion in 13 th century, they became deserted as the survived population left ruined towns and moved to the northern and western areas of Russia. Our Region revived rapidly in the 16 th and 17 th centuries due to reforms of Peter I who encouraged iron production as the ship guns for the Azov Fleet were cast here. New plants – Stankostroy (a tractor plant) in 1932 and NLMZ (Novolipetsk Metallurgical Plant, currently OAO NLMK) in 1934 – were established in Lipetsk. Then, machine building plants started operating in Yelets. The government decision to establish extensive iron and steel production in Central Russia and form the Lipetsk Region resulted in a fast development of Lipetsk and other cities. The Novolipetsk Metallurgical Plant was built by efforts of the entire country and the Lipetsk Region in particular. The foundation was laid for a strong construction sector and fast-growing transport infrastructure. Along with the dominating iron and steel industry, the Region strives to develop engineering, chemical, consumer goods, food manufacturing and other industries. The economic potential of the Region was used to boost the agricultural sector, upgrade production facilities and solve social issues. As the years passed, Lipetsk turned from a small country town into a half-a-million population modern city with a well-developed infrastructure. Other cities of the Region have changed as well. Culture
Transcript of Lipetsk Region -...
Lipetsk Region presentation of the region
Dear Sirs,
Let me present Lipetsk region and to express hope that the acquired information will expand your conception about the possibilities and working conditions in our region Lipetsk region is one of the leaders of Russian regions in the volumes of attracted investments. Increase of the efficiency of investment process is key value for the future of the country and its regions. Our goal is to create the system of conditions which determine the favorable investment climate, to assist the investment and general culture of business, and also to assist reaching the best information security and safety of investment activities. Lipetsk region is open for realization of new ideas and new forms of cooperation.
О. P. Korolev, Governor of Lipetsk Region
Geography
The Lipetsk Region is situated in the center of European Russia at the crossing of the major traffic arteries
connecting the capital of the Russian Federation with South Russia and North Caucasus, and western areas of Russia with the territories along the Volga. Lipetsk has a moderate continental climate.
The Region’s territory is about 24 thousand sq.km, that is, 0.14% of the Russian Federation (a little larger than the area of Israel but less than that of Albania).
The Region stretches 200 km from north to south and 150 km from west to east. The population is 1.2 million people. The Region is divided into 20 administrative territories: two urban districts and 18 municipalities.
The administrative center of the Region is the city of Lipetsk situated on the banks of the Voronezh River with population over 500 thousand people.
The Region is a high plain with heights up to 262 m in the West and flat lowland plain in the East. It has mineral deposits of limestones, dolomites, sand, clay and raw cement materials and leads in raw carbonate materials stock in the Russian Federation. There are substantial peat deposits in the Region.
Thick black earth occupies approximately 40% of the total territory of the Region while forests occupy about 9% of the same.
The Region’s flora counts around 1,200 species including 40 tree and bush species. The territory of the Lipetsk Region includes areas with the preglacial relic vegetation such as Galichia Gora,
Morozova Gora, Vorgolskie Skaly, Voronov Kamen, Plyushchan and Bykova Sheya. These areas comprise Galichia Gora natural reserve of the Lipetsk Region.
The Region has a diverse wildlife represented by over 60 mammal species, 250 bird species, 30 fish species, 8 reptile species and 8 amphibian species.
Thanks to its famous mineral springs and therapeutic muds discovered in 1871, Lipetsk has been known as a resort city for a long time. Lipetsk resorts have been operating since 1805. Lipetsk mineral springs were discovered as early as in the time of Peter I. Presently 13 mineral wells are exploited, with total water capacity of over 1,500 cub.m per day.
History
The Lipetsk Region was formed on January 6, 1954 by joining the outlying areas of the Ryazan, Voronezh, Kursk and Oryol Regions. They are native Russian areas populated hundreds of years ago. After the beginning of the Golden Horde’s invasion in 13th century, they became deserted as the survived population left ruined towns and moved to the northern and western areas of Russia.
Our Region revived rapidly in the 16th and 17th centuries due to reforms of Peter I who encouraged iron production as the ship guns for the Azov Fleet were cast here.
New plants – Stankostroy (a tractor plant) in 1932 and NLMZ (Novolipetsk Metallurgical Plant, currently OAO NLMK) in 1934 – were established in Lipetsk. Then, machine building plants started operating in Yelets.
The government decision to establish extensive iron and steel production in Central Russia and form the Lipetsk Region resulted in a fast development of Lipetsk and other cities. The Novolipetsk Metallurgical Plant was built by efforts of the entire country and the Lipetsk Region in particular. The foundation was laid for a strong construction sector and fast-growing transport infrastructure. Along with the dominating iron and steel industry, the Region strives to develop engineering, chemical, consumer goods, food manufacturing and other industries. The economic potential of the Region was used to boost the agricultural sector, upgrade production facilities and solve social issues.
As the years passed, Lipetsk turned from a small country town into a half-a-million population modern city with a well-developed infrastructure. Other cities of the Region have changed as well.
Culture
2 The cultural life of the Lipetsk Region has been fostered throughout all 58 years of its existence. Today
there is: • L.N. Tolstoy State Academic Drama Theater • two municipal theaters • State Regional Puppet Theater • State Regional Philharmonic Hall • The Cossacks of Russia State Dance Ensemble • State Orchestra of Russian Folk Instruments • over 10 municipal bands and dance groups in the towns and districts of the Region • 25 museums, a branch of the State Federal Leo Tolstoy Museum situated in Lev-Tolstoy village and over 100
school, departmental, public and private museums • 38 music and art schools • K.N. Igumnov Lipetsk Regional College of Arts • T.N. Khrennikov Yelets Regional College of Arts • Educational Advanced Training Center for Experts in Arts and Humanities • Lipetskoblkinotsentr (cinema center)
• Lipetsk Regional Exhibition Hall • 489 cultural and leisure institutions (community centers, recreation centers and clubs) • 520 public libraries • 136 cinemas • five art workshops • four independent recreation and entertainment parks and a zoo.
Science and Education
In 2011, the Region had 355 public preschool institutions including three infant schools offering primary education. The preschool institutions are attended by 41,603 children (58.9%) from one to six years old.
• As of January 1, 2012 the Region had 274 general education institutions and 135 branch schools offering affordable primary, basic and secondary education.
The system of elementary and secondary professional education of Lipetsk region is presented by 18 organizations of elementary and 22 organizations of secondary professional education which train students for 62 professions in elementary and 70 professions in secondary professional education. There are 8 resource centers on the basis of organizations of elementary and secondary professional education. As of January 1, 2012, the Lipetsk Region has 18 specialized schools and 22 colleges offering 62 blue-collar professions and 70 mid-level majors to 21.3 thousand students. The educational process is carried out by 613 teachers.
The specialized schools and colleges of the Region have 8 HR centers. Over 1,3 people were involved in research and development in 2011 including current members and
corresponding members of the Russian and international academies. In 2011, over a hundred people received honorary degrees, public awards, diplomas and certificates. The value of research and development projects exceeded RUB 75 million.
Key focus areas of R&D institutions are as follows: • Russian Research Institute of Oilseed Rape carries out research in selection, seed production, genetics and
biotechnology of the rape farming, agriculture and livestock breeding; • Yelets Potato Experimental Station carries out research in selection, seed production and agricultural
engineering of the potato farming; • Foundry Technology Institute develops and implements new process technologies; • Central Construction and Materials Research Laboratory carries out research in new construction materials,
improves their manufacturing processes and utilizes industrial wastes; • OOO GeoTekhProektStroy carries out research in foundation engineering and develops new manufacturing
processes; • Engineering Center of OAO NLMK researches environmental, resource conservation and product quality
improvement issues; • OOO Silan Production Company carries out research in organosilicon manufacturing technology and creates
new paint materials; • Lipetsk State Agrochemical Service Center analyzes soil condition and develops methods for recovering soil
fertility and increasing crop capacity; • Yelets State Agrochemical Service Station performs agrochemical soil monitoring; • Lipetsk Center of Scientific and Technical Information (FGU Lipetsk TsNTI) develops and improves processes
of collection, processing, storage and use of the regional information activity resources and research and development results based on digital means and systems as well as information technologies, maintains purpose-oriented programs, monitors companies’ research and development activities for sectors of the
Region’s economy and performs patent researches; • Galichia Gora Reserve of Voronezh University maintains a reserve environmental data collection and
maintenance system and conducts integrated research and monitoring of the Region’s environment. The core scientific potential of the Region is concentrated in the following three universities:
• I.A. Bunin Yelets State University studies history and archeology of the Central Russian Region, Russian language issues, legal and social issues, etc.
• Lipetsk State Technical University studies and developing new ferrous metals, construction materials and structures manufacturing processes, methods for equipment and tools reliability improvement, energy saving and resource conservation issues, etc., and
• Lipetsk State Pedagogical University studies and monitors the environment and fauna, and continuous pedagogical education, foreign culture teaching methods and regional history and culture issues, etc.
Healthcare
As of 2012, the Lipetsk Region Healthcare System comprises:
3 • 48 medical institutions (hospitals, dispensaries, medical centers); • 60 outpatient clinics (15 independent clinics and 45 clinics being part of the preventive and treatment
institutions); • seven state-owned dental clinics; • two first-aid stations and 26 emergency wards; • Regional Center of Medical Prevention; • Bureau of Forensic Services; • Disaster Medicine Center; • Medical Information and Analysis Center; • two orphanages; • two blood transfusion stations; • four health resorts; • 395 country first-aid stations.
As of January 1st, 2012 the Region employs 4.2 thousand doctors and 12.6 thousand other medical workers, and the primary healthcare sector employs 577 doctors including 133 general practitioners.
Seventy-four medical majors are available to the Region’s population. The regional hospitals may accept a
total of10.5 people, and outpatient clinics’ capacity is 32.5 visits per shift.
Sport and Tourism
The most popular sports activities are football, volleyball, basketball, track-and-field athletics, table tennis,
swimming, cross-country skiing and aerobics. There are 581 functioning gyms, 35 swimming pools and 21 stadiums in the Region. Over the last five
years 16 swimming pools, ice palace in Lipetsk ski lodges in Yelets and Zadonsk, 43 multi-functional playgrounds and two football grounds have been built in the Region’s cities and districts.
Lipetsk athletes are well known for their results at different championships. The year 2011 was famous for: – golden, silver and bronze medals won at European and world championships by Lipetsk shooters, a personal world record of Vitaly Fokeev and a team word record of Tatiana Barsuk; – silver medals won by Vladimir Dyatchin in open water swimming at world and European championships; – bronze medals of the world championship won by athletes Lyudmila Litvinova and Ksenia Vdovina who proved their readiness for relay race at the Olympic Games. In 2011, Lipetsk sportsmen were watched in over 40 countries on five continents. The elite sport of the Lipetsk Region has a sound foundation for further growth and new victories.
Successes of young sportsmen inspire hopes for great prospects of Lipetsk sport. During the World University Games in 2011 the six Lipetsk sportsmen, members of the Russian national team, won seven different medals. Over the last seven years, 14 sportsmen were awarded with the title of Honored Masters of Sports for their outstanding performance.
Sixty-six sports institutions including 25 sports schools are attended by 29 thousand children and teenagers free of charge.
The Region is also known for its well-developed tourism sector. It offers ski tours, water tours and hiking all over the Russian Federation including journeys to ascend the highest peaks of the Pamir and Caucasus Mountains.
The Lipetsk Region is a perfect place for recreation, sightseeing, tourism, fishing and hunting. There are 842 historical and cultural monuments under state protection in the Lipetsk Region.
There are two tourism and recreation economic zones in the Region, Yelets and Zadonshchina. They comprise areas that have the most rich spiritual, historical and cultural potential and have always been attractive to tourists.
Investments into special tourism and recreation economic zones are supported by the government in compliance with the regional legislation.
In 2011, the Lipetsk Region was included in Domestic Russian Tourism Development 2011-2018 Federal Target Program with its investment projects for the creation of two clusters – Zadonshchina car tourism cluster and Yelets tourism and recreation cluster. In 2012–2017, investments from the federal budget into each cluster will reach RUB 590 million and RUB 1,330 million correspondingly.
Besides, both clusters will be financed from the regional budget (RUB 526.4 million) and by private investors (RUB 4,744.0 million).
The clusters are planned to have a complex infrastructure, including accommodation facilities (hotels, mini hotels, etc.), campings, catering facilities, retail and entertainment facilities (theaters, stores, shopping centers, etc.) conference facilities and services (business centers, parking lots, etc.), medical and health facilities (spas, health clubs, tennis courts, etc.), gas stations and service stations.
Sightseeing, Art and Events
The places of interest of the Lipetsk Region include historical monuments, landmarks, temples, art galleries,
museums, memorials estates and parks of Yelets, Zadonsk, Lebedyan and Chaplygin. There are over 3,000 cultural heritage sites in the Lipetsk Region, with 42 of them of federal importance.
The list of cultural heritage sites is updated every year with new, and sometimes unique, monuments of architecture and archeology.
The most famous Yelets temples are Voznesensky Cathedral designed by K.A. Thon in memory of the Yelets residents killed in the battle with Tamerlane’s troops and Velikoknyazheskaya Church built in commemoration of the 300th anniversary of the House of Romanov.
The Rozhdestvo-Bogoroditsky Monastery keeping relics of St. Tikhon of Zadonsk and Svyato-Tikhonovsky Female Monastery are situated in Zadonsk, an orthodox city of the Lipetsk Region.
A lot of prominent people were born in the Lipetsk Region including writers I.A. Bunin, E.I. Zamyatin and M.M. Prishvin, pianist K.N. Igumnov and composer T.N. Khrennikov, founder of the Social-Democratic movement in Russia G.V. Plekhanov, artists B.M. Kustodiev, K.V. Lebedev, N.N. Zhukov and many others.
4 The Lipetsk Region provides perfect recreation, tourism, fishing and hunting opportunities to its residents
and visitors due its advantageous territorial location. The unique craftworks, famous Yelets lace, Romanov clay toys and lacquer and wooden souvenirs are
always available to the visitors. Key cultural events of the Region are Russian and international festivals and competitions for young
vocalists, musicians, dancers and moviemakers. For example, the traditional Russian Festival named after A.P. Mistyukov has been held in Lipetsk and districts since 1991.
The Region has 521 libraries, 17 museums including eight branches visited by over 214 thousand people per year, four theaters, a philharmonic hall, two concert organizations and five creative teams which performances were attended by 437 thousand people in 2011. In 2011 year more than 120 exhibitions have been held in the regional art galleries.
There are 38 music and art schools in the Region attended by 13 thousand children and teenagers. Over 560 students study at Lipetsk and Yelets art colleges.
The scheduled events of 2012 include: – All-Russian Folk Instruments Festival dedicated to the Slavic Written Language and Culture Day; – II Delphic Games in the Lipetsk Region;
– IV International Festival of the Cossacks of Russia; – V All-Russian Competitions for Young Vocalists named after N.A. Obukhova; – VIII Lipetsk Plein Air of Professional Artists of the Central Federal District; – and events dedicated to the 100th anniversary of V.S. Sorokin, a people's artist.
Small Business Development
For the last ten years, small and medium-size businesses have increased their contribution to the regional
economy. Their GRP share grew 4.2 times; employment with SME increased 3.6 times, and their contribution to the regional budget (taxes paid by SME) went up by 3.2 times.
Today there are over 11.8 small businesses, 136 medium-sized companies and over 33.4 thousand sole proprietors operating in the region. In 2011 alone, SMEs created over 10 thousand working places. As for now, this sector employs over 167 thousand people.
Rapid SME development is facilitated by the regional business support programs which have been implemented since 2001. The range of supporting measures is expanded and adapted to the current needs.
In the last year, total SME financing under the Small and Medium Business Development 2009–2012 regional program exceeded RUB 175 million.
Financial support was provided to 52 investment projects. A total of 441 sole proprietors received financial aid of up to RUB 200,000 to establish their own business. Thirteen municipal initiatives related to SME development were financed which resulted in establishment of 42 companies.
A specific importance is given to measures aimed at increasing competitiveness of small businesses. In 2011, sixteen companies which introduced energy saving measures received government subsidies. The regional government also introduces new measures aimed at innovation development and SME support. Nine companies received subsidies to reimburse advance lease payments. Five small companies also received subsidies to implement innovations.
The Regional SME Support Fund pays much attention to social aspects of its operations. Loan interest rates remain the lowest in Russia – from 1% for agricultural farms and up to 4% for SMEs. These rates are 2.5 times lower than rates offered by micro loan funds from other regions.
In 2011, SMEs received 260 micro loans and 21 companies received guaranties of the Fund. In 2012, its priority will be a deeper involvement into SME development, economic modernization, focus on
the real sector, and a growing share in the non-trade sector.
Consumer Market
The regional consumer market is stable and well satisfied with goods and services. It has a developed network of retail stores, catering facilities and service companies.
As of January 1, 2012, the regional consumer market includes 10.9 thousand companies, including 7 thousand retail stores and shops (64.2%), 1.4 thousand catering facilities (12.8%), 2.5 thousand service companies (22.9%) and 28 retail markets.
The consumer sector of the Lipetsk Region employs 25% of the economically active population. The consumer market forms 10% of the GRP which is the highest indicator among other industries (except for the processing sector).
An indirect indicator of the socio-economic situation in the region is a retail turnover per capita which was RUB 118.3 thousand per capita in 2011.
Lipetsk remains the 1st region in the Central Chernozem District and the 3rd in the Central Federal District
by the retail turnover. Major trends in the retail sector are the same as in other Russian regions. A growing share in the consumer
market belongs to federal and regional retail chain stores. They account for 23.5% of the total sales. Entertainment centers were also developing in the region. Taking into account demand for ready-made
food, large retail stores open their own gastronomy departments. Catering is an important economic sector. Consumer services are provided by 2.5 thousand companies and 2 thousand sole proprietors, which
employ 9,000 people. The service volume per capita was RUB 4,693. An important role in the consumer services sector is played by small businesses which account for 88.9%
of the total services provided (58% out of them provided by sole proprietors).
Lipetsk Chamber of Commerce and Industry
5 Lipetsk Chamber of Commerce and Industry (Lipetsk CCI) is a non-state non-profit organization
promoting the economy of the Lipetsk Region which represents and protects interests of the regional businesses under the Lipetsk CCI Charter and Russian Federation Law “On Chambers of Commerce and Industry in the Russian Federation”.
Lipetsk CCI is a member of the Russian Federation Chambers Network including about 180 territorial chambers and 15 representative offices abroad and of the World Chambers Network established over 400 years ago.
Lipetsk CCI was established in 1992 and consists of 380 enterprises and organizations with different forms of ownership. Today Lipetsk CCI is an effective and multi-functional entity able to support the entire business in the Lipetsk Region.
In 1997 Lipetsk CCI was accredited by the Chamber of Commerce and Industry of the Russian Federation among the first ten regional chambers. The accreditation confirms its high status and level of the services rendered and permits more extensive activities on the Russian and foreign markets to the benefit of the regional business development. Statements and certificates issued by Lipetsk CCI are recognized by the state and other authorities all over the world.
Lipetsk CCI is a member of the Central Federal District Chambers of Commerce and Industry Association
and Black Sea and Caspian CCI Business Councils. Lipetsk CCI concluded over 36 Cooperation Agreements with the regional and federal entities and 24 foreign chambers and organizations.
Due to their membership in Lipetsk CCI the enterprises and organizations of the Lipetsk Region may use a wide variety of services rendered by high-skilled specialists on a first-priority basis, free of charge or at discounts.
In addition, members of Lipetsk CCI may: • together with other businessmen significantly influence the social and economic life of the Region; and • use opportunities and experience of the Russian and international CCI networks to succeed in business.
Lipetsk CCI maintains a number of public committees, among them Small Business Support and Development Committee, Information and Telecommunications Committee, Regional Quality Council, Advertising and Mass Media Relations Committee, Quality Control Managers Association, Regional Subcontract Center, Lipetsk Exporters' Club, and Arbitration Tribunal.
Internet Presence
A complete package of the Internet services is available to the individuals and organizations in all Lipetsk Region areas. The last stage of providing the broadband Internet access to the regional schools is in progress. The project on Internet access provision to each regional library is implemented. The Lipetsk Region is represented in the Web by hundreds of websites including: Official web server of the Lipetsk Region Administration http://www.admlr.lipetsk.ru Website of Lipetsk Region Deputies Council http://www.oblsovet.ru Website of Lipetsk Region Administrative Authorities Office http://uao-lipetsk.ru Website of Lipetsk Region Veterinary Department www.vetlipetsk.ru Website of Lipetsk Region Road Department www.dortranslipetsk.ru Website of Lipetsk Region Civil Registry and Archives Department http://www.uzags.com http://www.arhiv.uzags.com Website of Lipetsk Region Healthcare Department www.uzalo.ru Website of Lipetsk Region Property and Land Relations Department uizo.lipetsk.ru Website of Lipetsk Region Investments and International Relations Department www.invest.region48.ru Website of Lipetsk Region Innovations, Industry and Transport Department www.ippt.region48.ru http://transport-admlr.ru Website of Lipetsk Region Investment and International Relations Department
www.invest.region48.ru Website of Lipetsk Region Culture and Arts Department www.kultura48.ru Website of Lipetsk Region Forestry Department http://www.leslipetsk.ru Website of Lipetsk Region Education and Science Department www.deptno.lipetsk.ru Website of Lipetsk Region SME Development Department http://mb.admlr.lipetsk.ru Website of Lipetsk Region Consumer Market and Pricing Policy Department http://liptorg-cp.ru Website of Lipetsk Region Agriculture Department www.sh48.ru
6 Website of Lipetsk Region Population Social Protection Department http://szn.lipetsk.ru Website of Lipetsk Region Labor and Employment Department www.utiz.lipetsk.ru Website of Lipetsk Region Sports and Tourism Department www.sport48.ru www.liptur.ru Website of Lipetsk Region Environment Department Web-сайт: http://ekolip.ru Website of Lipetsk Region Energy Sector and Tariffs Department http://energy48.ru Regional Special Economic Zones http://www.oezru.ru Lipetsk Special Economic Zone of Federal Level http://www.sez-lipetsk.ru
PRODUCTION CAPACITY
Products
Slide Captions: Steel, Cast Iron, Rolled Iron Pipes Refrigerators, Freezers, Washing Machines Tractors and Other Engineering Products Dairy and Beef Stock Farming Grain Crops, Brewing Barley and Sugar Beet Fruit and Vegetables Juice, Preserves and Concentrates Ice Cream Confectionery Products Sausages and Meat Products Bakery and Macaroni Products Table Mineral Water Craftworks Yelets Lace
Communications
Transport Infrastructure The Lipetsk Region has a well-developed transport infrastructure which includes motor roads, railroads and
airlines network for cargo and passenger transportation seamlessly integrated in the transport system of the Russian Federation.
The Lipetsk Region is one of the ten Russian regions with the largest road density. As of January 1, 2012, the total length of the federal and regional roads is 5,960 km, including 475 km of the federal roads. Several major federal highways cross the Lipetsk Region, including M-4 Don (Moscow – Voronezh – Rostov-on-Don – Krasnodar – Novorossisk), A-133 (Lipetsk – M-4 connecting road), P-119 (Oryol – Livny – Yelets – Lipetsk –
Tambov), and P-193 (Voronezh – Tambov). As of January 1, 2012, fifty-two kilometers of M-4 Don is a toll road. The total railroad network is 757 km. The Lipetsk Region railroad density is six times higher than the
Russian Federation’s average. Three main lines cross the Lipetsk Region which connect Moscow with the South Russian industrial centers such as Voronezh, Rostov, North Caucasus and Donbas as well as Volga Region and several western cities, namely, Oryol, Bryansk and Smolensk. Yelets and Gryazi are the major terminal stations.
Air traffic is handled by Lipetsk Airport which can accommodate airplanes with the takeoff weight of up to 60 metric tons. To improve preflight passenger services the business center, post office and ATM are open day and night. In addition to the scheduled flights the charter flights are arranged accounting for a sizable proportion of the total air traffic.
Communications System
The Region’s modern communications system provides fast and reliable communication with any part of the
world. The telecommunication network develops rapidly and is modernized due to the use of the modern digital communication technologies and fiber-optic links. Demand of the region’s enterprises and population for modern information and telecommunication services are satisfied due to the development of the regional multi-service communication network and use of the modern technologies.
The Region’s major fixed-line telecommunications provider is Lipetsk Branch of OAO Rostelecom providing local and intrazone telephone communication, high-speed Internet access, data transmission, wired and wireless broadcasting and cable TV services. It also provides connection and traffic transmission services to other service providers.
Broadband Internet access is also provided by the following communications providers: – OOO Telemir – OOO INETERA (Lipetsk Branch) – OOO TELECOM TZ (Lipetsk Branch)
7 – OOO Prestige Internet (Rostov Department, Lipetsk Branch) – ZAO BIT Telecom Lipetsk – OOO Incom – OOO Summa Telecom – ZAO ER Telecom Holding (Lipetsk Branch) – Lipetsk Branch of ZAO Investelektrosvyaz – ZAO Yugo-Vostok TransTelekom – OOO Lipetsk Multimedia Networks – OOO MediaSet – OOO Telecom-Service and others.
An integrated network of the mobile radiotelephone communication is represented in the Region by the following four service providers: Lipetsk Branch of OAO VympelCom (Beeline), Branch of OAO MTS in the Lipetsk Region, Lipetsk Autonomous Subdivision of Voronezh Regional Division of the Caucasian Branch of OAO Megafon and ZAO Tele2-Lipetsk. The service providers ensure sustainable development of the existing mobile radiotelephone network by increasing network capacity, extending service range and using 3G capabilities.
Mass Media and Telecommunications
Fifteen federal and local TV channels are broadcast and 22 federal and local radio stations operate in the Lipetsk Region.
The population is informed of the social, economic and political situation in the Region through 65 newspapers, 25 magazines, 3 news agencies, 1 catalog, 1 bulletin, 9 websites registered as Mass Media, and 2 digital periodicals.
Industries
The Lipetsk Region industrial complex is very much diverse and includes about 200 large and medium-sized enterprises. It employs 107 people, or 27% of the total number of employees engaged in the Region’s economy.
Lipetsk is the first region in the Central Federal District and the third in Russia by output of the processing industries per capita. The Region leads among the regions of the Central Federal District and Russian Federation in manufacturing of the concrete mixing machines (38% of the total Russian manufacture), household refrigerators and freezers (36%), washing machines (35%), cultivators (28%), cast iron (20.3%), coke (9%), rolled iron (13.4%), steel (14.1%), electrical-sheet steel (62%) and transformer steel (60%). OAO LMZ Svobodny Sokol is the only manufacturer of the centrifugal-cast ductile iron pipes in Russia and CIS countries. Ya, Fruktovy Sad and Tonus juices produced in Lebedyan are consumed by almost a third of the nation. Lipetsk ice-cream is successfully sold both in Russia and Western Europe.
The core industries are iron and steel production (59% of the total manufacturing output), food production (20%), electric power industry (7%) and machinery production (6.3%). Over 75% of the enterprises are profit-making.
In 2010 the average monthly salary in the manufacturing industry was 24,100 rubles and 30,800 rubles in the iron and steel industry in particular.
The largest industrial enterprises include OAO NLMK, ZAO Indesit International, OAO Svobodny Sokol Lipetsk Metallurgical Plant, OAO Yeletsgidroagregat, OAO Energiya, OAO Lebedyan Construction and Finishing Machinery Plant, OAO Gryazi Cultivator Plant, etc.
The largest food processing enterprises are Joint-Stock Companies Lebedyansky, Lipetskkhlebmakaronprom, Dankov Meat Processing Plant, Lipetsk Meat Processing Plant, etc. Almost 1/3 of the Russian population buys Ya, Fruit Garden and Tonus juices manufactured in Lebedyan. Lipetsk ice cream is successfully sold both in Russia and in Western Europe.
Gross Regional Product of the Lipetsk Region
In 2011, the gross regional product of the Lipetsk region amounted to RUB 284.3 billion.
Over two thirds of the total value is added in the real sector (processing industries, agriculture, hunting, forestry, power and gas production, and construction industry). In 2004–2011, the real sector's share decreased from 76.5% to 67.4%, with the share of services growing from 23.5% to 32.6%. This tendency complies with the world post-industrial development.
According to the estimates, in 2011 a major part of the added value was formed in such sectors as processing industry (44.9%), construction (11.5%), wholesale and retail trade (9.8%), agriculture (6.9%), transport and communication (6.1%).
In 2011, the gross regional product amounted to RUB 243.2 thousand per capita (a 9.3% increase against
the pre-crisis year 2008). According to the indicator the Lipetsk region is the forth in the Central Federal District following Moscow, Moscow Region and Belgorod Region.
The industrial production index in 2011 grew by 2.9% year-on-year. The industrial production volume reached RUB 384.6 billion, exceeding the pre-crisis level of 2008 by RUB 46 billion.
The following industries achieved high growth rates: engineering – 115.4%, non-metallic mineral products –
108.2%, chemical industry – 117.6%, pulp and paper production – 109% and steel production – 104%.
8 According to per capita output of the processing industries, the Lipetsk region is the first in Russia and
the third in the Central Federal District. The renewal of the industrial production is determined by not only the restoration of the world economic
situation but also the mobilization of internal growth processes which presuppose intensifying production effectiveness, increasing labour productivity and reducing costs. Some regional enterprises carry out projects for technological upgrading and modernization of production which promote expanding the range of goods, improving the goods quality, increasing labour productivity and output.
Within the framework of the regional Laws and Programs the regional business entities are given the support in the form of:
• tax benefits, • subsidies compensating for a part of expenses, • state warranties, • pledge fund. In 2011, innovative products increased by 14.4% year-on-year and totaled RUB 35.4 billion. Innovative
products account for 9.7% in the total amount of goods sold. Over 77% of them is produced by the steel industry, with 21% produced by the food industry.
A share of investments in the GRP exceeds the Russian average and reaches 41% (19% in Russia on the average).
Agriculture is developing actively. In 2011, growth rates exceeded the Russian average. The gross agricultural product grew by 49% year-on-year (22% in Russia on the average) and made RUB 47 billion.
The Lipetsk Region both ensures its own food security and replaces imported goods in other regions. Lipetsk satisfies its own demand 1.4 times by grain, 1.8 times by potato, 2 times by meat and 10 times by sugar.
Plant breeding managed to fully recover after the drought of 2010 – its output grew by 94% year-on-year and by 14% against 2009 (the year preceding the drought).
The region produced almost 2 million tons of grain, the record figure for the last 11 years, except for 2008 and 2009.
Farmers harvested record high 3.5 million tons of sugar beet (2.8 times against 2010) and 221,000 tons of sunflower seeds (2.6 times against 2010).
Potato production reached 700 thousand tons (1.5-time increase against 2000), with vegetable production exceeding 156,000 tons (1.3 times).
In 2011, animal breeding also kept a positive trend (+3% year-on-year).
Agriculture
The agricultural sector is the basic component of the Lipetsk region economy. It includes about 200 agricultural enterprises, 1.3 thousand farms and more than 200 thousand private ones, above 700 private entrepreneurs dealing with agriculture, 375 food production enterprises and 174 agricultural consumers' cooperative societies.
The agricultural land has an area of more than 1.9 million hectares (75% of the total area) including 1.5 million hectares of croplands (80% of the area) and 35 thousand hectares of perennial plant lands. Black earth is a prevailing type of soil comprising more than 85% of the agricultural land. Using 1.5% of the total cropland in Russia the region produces 3% of the national volume of grain, meat and meat products, 4% of macaroni and confectionery products, 6% of mineral water, 8% of sugar, 26% of canned fruits and vegetables and juices.
The production of cereals crops, sugar beet, potatoes, cattle rearing, hog breeding and poultry farming are the main branches of farming industry.
The production of such heavy feeders as rape, maize and grain, is developing. A special attention is paid to the development of beef and dairy cattle rearing and the establishment of small family dairy farms. Establishing small family farms is a new tendency in the development of Russian agriculture. In the Lipetsk region a special program on creation of family dairy farms has been worked out.
The regional farmers introduce the latest technological innovations such as precision agriculture. The technology consists in transmitting signals from space satellites to computers installed on agricultural vehicles and allows fertilizing the land strips which need it badly.
As it is primarily important to tackle the problem of import substitution, remain independent from import of foreign selection seeds and increase the volume of domestic production, the regional seed farming has become a separate industry and the basis for crop production. In the Lipetsk region selection of seeds is carried out by All-Russian Scientific Research Institute of Rape dealing with special and stock seeds. The improvement and selective breeding of new foreign cereals varieties and crosses, which comply with Russian natural conditions and demand, is implemented by OOO Soufflet Zerno-RUS (France) and OOO KWS-RUS (Germany). KWS has created an experimental station which is the information center spreading advanced technologies of cereals growing. The center combines modern experience and special courses for Russian and East European agricultural managers and experts.
In the region there are farms producing seeds of the highest reproduction. There is also a testing station in Lipetsk which is a subsidiary of the State Commission of Russian Federation for Selection Achievements Tests and Protection and a research center for innovative technologies belonging to the Swiss company Syngenta. In 2010 there appeared the worldwide acknowledged leader in the field of selection and production of various crosses of cereals seeds. It is Pioneer Hi-Bred. The company has the largest bank of rare breeding material and deals with working out, delivery and technical support of various products which are necessary the needs of the advanced high-technology agricultural production.
The Astapovo regional agriculture special economic zone is successfully functioning. Its investors’ boosting is supported by reducing the income tax rate, exempting from property and transport taxes and subsidizing loan interest rates.
Application of intensive European technologies helped the region to become the second in the Central Federal District by pork output.
In Yeletsprom Industrial SEZ (Special Economic Zone), OAO Cherkizovo Group has started a large-scale investment project which will promote establishing a complete production cycle in hog breeding and poultry
9 farming sectors and ensuring a steady dynamics of production, processing and sales of integrated competitive products. The project envisages application of the latest technologies, such as new methods of waste processing. It is going to be a major project in Russia which will contribute to food security on both the regional and national levels.
In 2011, production of cattle and poultry for slaughter (live weight) amounted to 211.1 thousand tons (+6% year-on-year). A share of agricultural enterprises constituted 177.2 thousand tons (+8%).
The ratio between the total power of agricultural machinery and lands amounts to 178 h.p. per 100 ha which is by 10% more than in 2010.
Food and processing industry is a strategic focus of the region as it aims at providing the population with all necessary food products of good quality.
Replacement and modernization of fixed assets, implementation of resource saving technologies, improvement of cooperation between agricultural producers facilitate an industry turnover which has been steadily growing over the recent years. The goods produced by food and processing companies increased by 5% year-on-year and totaled RUB 76.4 billion (net of VAT and excise, in current prices).
The innovative goods produced by food and processing companies totaled RUB 7.5 billion which makes about 10% of the total goods produced.
In 2011, Lipetsk organized 62 regional trade fairs, 9 exhibitions in Moscow, and 20 retail agricultural fairs in Lipetsk and Yelets to support and develop domestic sale of agricultural products.
Construction
Construction is one of the key economic branches and determines the fulfillment of social, economic and
technical tasks of the region in many respects. At the moment the regional construction sector includes above 500 enterprises and organizations having
different forms of ownership and being licensed to carry out construction, reconstruction and basic repair which is the basis for the security of capital construction sites. Among these enterprises and organizations there are more than a hundred of large and medium construction entities.
At the moment the Lipetsk region is completely provided with such construction materials of domestic production as cement, precast concrete, walling’s, (lime-sand brick, gas-silicate and slag blocks), concrete products (paving tile, curing and others), construction lime, sand, macadam and clay. The regional capacity of wallings production reaches the volume of more than 750 million pieces of brick, above 500 thousand cub. m of precast concrete and 1,600 thousand tons of cement annually. There is also a wide range of raw materials needed for construction products manufacture.
On the whole the volume and quality of output products satisfy constructors’ and people’s demands. To comply with the RF Urban Development Code the Lipetsk region populated localities are being steadily
provided with urban planning documentation. The basic planning projects have been worked out for each town and center of all 18 municipal districts of
the region. Each municipal district prepared and approved its planning schemes. Lipetsk Region strives to improve its architectural look, and its success was awarded at the Zodchestvo
(Architecture) International Festival in Moscow. In 2005, Lipetsk Region won the third prize. In 2009, the region was the first in the Russian Regions and Cities category and took the first prize for its achievements in urban development and architecture among other Russian regions. In 2011, Lipetsk Region once again received an award in the same category (this time – the third prize).
In 2005–2010, about five million sq m of housing facilities were constructed and commissioned in the region. In 2011 alone, private construction companies commissioned 462.4 thousand sq m out of 761.7 thousand sq. m of housing facilities built in the region (a 0.4% increase year-on-year).
In 2010 the amount of housing per capita comprised 0.65 sq m per head what proves the region to be the fifth among other subjects of the Russian Federation.
In consideration of the current housing construction rate and the expected level of the sector the amount of housing per capita it is supposed to reach the amount of one sq. m per head by 2015.
List of Businesses
INVESTMENT OPPORTUNITIES
Investment
At the investment market, the region offers high investment safety and well developed infrastructure as its competitive advantages.
Capital investment is the core driver of regional economy development. Investments in the region have experienced solid growth of over 120% per year on average since 2000. For
the last few years, volume of capital investment has been exceeding the budget revenues of the region twofold. The region has 350 foreign-invested businesses operating in its territory.
In 2011, the estimated capital investments increased by 6.9% year-on-year and totaled RUB 117.8 billion. Capital investments per capita amounted to RUB 100 thousand (+24% y-o-y). The region leads by this indicators in the Central Russia and is the 19th place in Russia.
Equity capital remains the key source of financing and makes 65% of total investments. Foreign investments in 2011 comprised USD 530 million. Foreign investments were generally channeled
into the manufacturing industry for retrofit and modernization. In 2011, investments were made from 14 countries.
10Almost 99.2% of foreign investments were concentrated in the manufacturing industry, including:
95.8% in iron and steel production and processing, 1.6% in food, beverages and tobacco industry, and 1.1% in rubber and plastic production. Power, gas and water production and supply, retail and wholesale trade account for 0.2% of the total foreign investments.
To further improve the regional investment climate, the Lipetsk Region has adopted 2020 Investment Strategy.
The strategy is designed to improve the investment appeal of the region; facilitate the mobilization of home and foreign investment and attraction of new technologies into the regional economy; enhance the investment sources and improve their effectiveness; develop the regional infrastructure on the platform of private-public partnerships; equalize the socio-economic development throughout the region.
Regional industries are supported through: • tax incentives • credit interest rate subsidies • direct financing from the budget • access to government guarantees and regional pledge fund.
Investment Climate Improvement 2012–2014 regional program was developed to introduce a consistent
policy aimed at improving the local investment climate, investment mechanisms and efficiency. Lipetsk hosts annual international investment conferences and business meetings aimed at setting future
prospects and creating an investment climate favorable for attracting potential partners in the region. Enhancement of its international business relations facilitates integration into the world economy, science and culture.
Lipetsk Federal Special Economic Zone is another example of investment success. It offers access to all essential infrastructure; its residents are 22 companies from five countries with the total investments of RUB 55 billion. As of 2011, eight resident companies operated in the Lipetsk SEZ.
Lipetsk Region is the first in Russia to launch 8 regional special economic zones. As of 2011, they have 31 registered residents with the total investments of RUB 60 billion.
Another tool to improve investment climate in the region is establishment of industrial parks. The Lipetsk Region has developed a clear legal basis for such parks, and identified their key tasks and government support for their residents and management companies.
After January 01, 2012, industrial park residents and management companies will enjoy property tax and income tax incentives for the period of 5 years.
In 2011, three industrial parks were officially registered in the region. They are: – Kuznechnaya Sloboda Industrial Park based on the premises of Stroymash Company in Lebedyan
(mechanical engineering, components for home appliances, car components, and construction machinery);
– Gryazi Industrial Park based on the premises of OAO Gryazi Cultivator Plant; – Technokom Industrial Park based on the premises of OOO United Machinery and Hydraulics Plant in
Yelets (agricultural and special purpose machinery). Another industrial park is planned to be established in Usman District. Lipetsk has become one of six pilot
regions to implement the Executive Branch Standards prepared by the Strategic Initiatives Agency founded by Prime-Minister V. Putin. A road map was drafted to introduce the Standard in the region.
The regional authorities have approved the Investment Memorandum which officially declares key principles of investor relations.
The Lipetsk Region meets innovation development standards introduced by the Russian Innovative Region Association. Lipetsk plans to become a full member of the Association in 2012.
The Lipetsk Region has signed a non-commercial agreement with the Russian National Business Angels Partnership to commercialize innovative projects and ideas in the region and cooperate with other Russian regions in this sphere.
Ratings of Lipetsk Region
For the past few years, the region has been top rated among other Russian regions in different ratings. International rating agencies have ranked the Lipetsk Region both on international and national scales since
2003. In 2011, the Lipetsk Region received a 'BB' long-term credit rating and 'ruAA' national rating. The rating outlook is 'stable'. It is maintained by the high liquidity index of the Lipetsk Region and balanced financial and debt management. Reputable rating agencies confirm the region's favorable socio-economic climate by assigning it credit and liquidity scores every year.
According to Expert RA rating agency, the region became one of the leaders which had had the lowest investment risk for seven preceding years and was the 3rd among other Russian regions in 2011.
Investment-Related Regulatory Legal Acts of Lipetsk Region
Regulatory Legal Acts Investment Support
Lipetsk Region Law No. 59-OZ (59-ОЗ) dated February 25, 1997 “On providing support for investment in the economy of the Lipetsk Region” (as amended on April 28, 2010)
- corporate property and profit tax breaks granted in compliance with tax legislation of the region; - government guarantees for capital investment projects granted for a maximum of 15 years.
Lipetsk Region Law No. 151-OZ (151-ОЗ) dated May 29, 2008 “On applying the regional corporate profit tax discount” (as amended on October 31, 2011)
The corporate profit tax rate is cut by 4.5 percentage points for: - winners of investment project competitions in compliance with the Lipetsk Region Law “On providing support for investment in the economy of the Lipetsk Region”. The discount is applied to the profit gained from investment project implementation for the actual payback period of the investment project but no more than
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Regulatory Legal Acts Investment Support
5 years; - residents of the federal special economic zone of industrial type located in the Lipetsk Region. The incentive applies to the income from operations in the special economic zone (provided that income (expenses) from operations in the special economic zone and income (expenses) from operations outside the special economic zone are booked separately) for a period of 5 years after such income is received for the first time or for a period of 7 years after such income is received for the first time provided that such resident produces export-oriented and/or import-substituting goods and its revenues from the sales of such goods accounts for at least 50% of total revenue; - residents of the regional special economic zones in compliance with the Lipetsk Region Law “On Regional Special Economic Zones”. The incentive applies to the income from operations in the special economic zone (provided that income (expenses) from operations in the special economic zone and income (expenses) from operations outside the special economic zone are booked separately) for a period of 5 years after such income is received for the first time or for a period of 7 years after such income is received for the first time provided that such resident produces export-oriented and/or import-substituting goods and its revenues from the sales of such goods accounts for at least 50% of total revenue; - businesses investing in the development of infrastructure (water supply, drainage and treatment facilities) in the territory of the special economic zones in compliance with the Lipetsk Region Law “On regional special economic zones”. The incentive applies to the income from operations in the special economic zone (provided that income (expenses) from operations in the special economic zone and income (expenses) from operations outside the special economic zone are booked separately) for a period of 5 years after such infrastructure facilities are booked as fixed assets for the first time;
- organizations whose innovative projects are included in the regional register in compliance with the Lipetsk Region Law "On Innovative Development of the Lipetsk Region". The incentive applies to income from the innovative project implemented in the Lipetsk Region (provided that income and expenses from the project and from other operations are booked separately) for the project period but no more than for five years. - residents of industrial parks in compliance with the Lipetsk Region Law "On Industry in the Lipetsk Region". The incentive applies to income from operations in the industrial park (provided that income and expenses from operations in and outside the industrial park are booked separately) for five years after such income is received for the first time; - management companies of industrial parks in compliance with the Lipetsk Region Law "On Industry in the Lipetsk Region". The incentive applies to income from operations in the industrial park (provided that income and expenses from operations in and outside the industrial park are booked separately) for five years after such income is received for the first time.
Lipetsk Region Law No. 80-OZ (80-ОЗ) dated November 27, 2003 “On the corporate property tax of the Lipetsk Region” (as amended on October 31, 2011)
The following economic entities are exempted from the tax: - winners of investment project competitions in compliance with the Lipetsk Region Law “On Providing Support for Investment in the Economy of the Lipetsk Region”. The incentive applies to the property under reconstruction, extension or re-equipment, and the property purchased under such investment projects in the Lipetsk Region (provided that at least 90% of the annual business plan is completed as measured by investments into the project, revenue from sales, taxable income, number of work places created) for an actual payback period of the investment project but no more than 8 years for agricultural sector and 5 years for other industries; - residents of the federal special economic zone of industrial type located in the Lipetsk Region. The incentive applies to the property booked on the balance sheet of the organization and purchased to carry out operations in this special economic zone, and the property used and located in this special economic zone, for seven years after such property is booked for the first time; - residents of regional special economic zone. The incentive
applies to the property booked on the balance sheet of the organization and purchased to carry out operations in this special
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Regulatory Legal Acts Investment Support
economic zone, and the property used and located in this special economic zone, for seven years after such property is booked for the first time; - management companies and administrations of special economic zones in the Lipetsk Region. The incentive applies to the real estate booked on the balance sheet of the organization purchased for operation of the special economic zone, the real estate located in this zone and adjacent territory and related to it; - organizations investing in the development of infrastructure of special economic zones (water supply, drainage and treatment facilities) in compliance with the Lipetsk Region Law No. 316-OZ dated August 18, 2006 “On Regional Special Economic Zones”. The incentive applies to the property booked on the balance sheet of the organization purchased for operation of the special economic zone, the real estate located in this zone and adjacent territory and related to it, for seven years after such property is booked for the first time; - residents of industrial parks approved in compliance with the Lipetsk Region Law No. 144-OZ (144-ОЗ) dated June 14, 2011 "On Industry in the Lipetsk Region". The incentive applies to the property booked on the balance sheet of the organization used and located in the industrial park, for five years after the information of the residents is entered in the register of the Lipetsk Region industrial parks; - the organizations engaged in the agricultural production and recognized as such according to the clause 346.2 of the Tax Code of the Russian Federation, as well as the organizations performing the processing of agricultural products, primary treatment and storage of grain, engaged in the building of the cattle-breeding complexes (farms), sugar factories, capacities for primary treatment and storage of grain, objects of deep processing of the high-protein agricultural crops (soya, wheat, rye, corn, rape, nut and sorghum), on the specified objects of capital investments concerning the property used for production, processing and
storage of agricultural goods, - for the term of actual recoupment, but not longer than 8 years; - the organizations engaged in the agricultural production and recognized as such according to the clause 346.2 of the Tax Code of the Russian Federation, as well as the organizations performing the processing of agricultural products, primary treatment and storage of grain, engaged in the reconstruction and (or) modernization of the cattle-breeding complexes (farms), sugar factories, capacities for primary treatment and storage of grain, objects of deep processing of the high-protein agricultural crops (soya, wheat, rye, corn, rape, nut and sorghum), on the specified objects of capital investments concerning the property used for production, processing and storage of agricultural goods, for the term of actual recoupment, but not longer than 8 years; - organizations that implement innovative projects in accordance with the Law of the Lipetsk region from October 27, 2010 № 425-OZ "On innovation activity in the Lipetsk region", concerning the property considered on the balance sheet of the organization used for the realization of an innovative project included to the regional register of innovation projects for the period of five years from the date of the realization to the innovation project. A tax rate of 1,1% applies to the property booked on the balance sheet of the management companies of industrial parks, purchased for operation of the special economic zone and located in this park, for 5 years after the information of the management companies is entered in the register of the Lipetsk Region industrial parks.
Lipetsk Region Law No. 20-OZ (20-ОЗ) dated November 25, 2002 “On the transport tax of the Lipetsk Region” (as amended on August 18, 2011)
residents of the special economic zone and residents of the regional special economic zones are exempted from paying transport tax on the vehicles being on the books of such residents or members for a period of 10 years from the moment when such transport vehicles are entered in the books for the first time.
Lipetsk Region Law No. 127-OZ (127-ОЗ) dated September 29, 2004 “On the pledge fund of the Lipetsk Region” (as amended on October 27, 2010)
regional pledge fund is used to secure loans issued to investors running the investment projects in the region.
Lipetsk Region Law No. 425-OZ (425-ОЗ) dated October 27, 2010 “On the innovation activity in the Lipetsk Region” (as amended
Government support is provided to individual and corporate innovators employing no more than 2,000 people and with output of no more than three billion rubles for the previous year. The
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Regulatory Legal Acts Investment Support
on September 07, 2011) support provided takes the following forms: - regional government guarantees for innovative projects; - preferential rates for the rent of buildings, premises and facilities owned by the regional government; - innovation subsidies; - tax breaks granted in compliance with the regional tax and levy legislation; - informational support for innovators who run the projects included in the regional register of innovative projects.
Lipetsk Industrial Development 2009–2012 regional program adopted by the Decree No. 265 of the Lipetsk Region Administration dated October 8, 2008 (as amended on December 30, 2011)
- credit and rental subsidies to aid the restructuring and financial rehabilitation of industrial enterprises with regard to the technical re-equipment, greenfield and brownfield development of manufacturing facilities; - subsidies to compensate for the expenses on technology transfer with regard to the development, implementation and follow-up of enterprise restructuring and financial rehabilitation plans; - credit subsidies to aid the modernization of manufacturing facilities, purchase and assembly of equipment, execution of construction, installation and commissioning works; - subsidies to compensate for some expenses on the development, implementation and certification of quality management systems in compliance with international standards; - subsidies to compensate for the expenses on the rent of exhibition spaces in Moscow, regions of Russia and abroad; - credit subsidies to aid the innovative activity.
Regional Special-Purpose Program “Development of innovative activity in the Lipetsk Region in 2011–2015” adopted by the Decree No. 43 of the Lipetsk Region Administration dated February 17, 2011
- subsidies to the business of the region to compensate for some expenses on the implementation of projects included in the regional register of innovative projects aimed at the development of innovative, Nano technological and energy-saving products and technologies; - credit subsidies to the business of the region to aid the implementation of projects included in the regional register of innovative projects on the introduction of innovative technologies, enhancement of energy and resource efficiency, development of non-waste and clean manufacturing facilities; - subsidies to the business of the region to compensate for some expenses on research & development works, energy performance audit and design and development of new innovative product specimen carried out within the projects included in the regional register of innovative projects; - subsidies to the business of the region to compensate for the expenses on personnel training in innovative development, enhancement of energy and resource efficiency and clean production; - subsidizing of expenses of innovative companies on registration of patents, licenses, trademarks and other intellectual property; - subsidies to the business of the region to compensate for the expenses on the participation in innovation exhibitions and competitions held inside and outside Russia.
SME Business Development in Lipetsk Region 2009–2012 regional program adopted by the Decree No. 243 of the Lipetsk Region Administration dated September 18, 2008 (as amended on November 18, 2011)
- credit and rental subsidies to the small and medium-sized business to aid the implementation of investment projects in foreground areas. The support is provided during the validity period of a loan agreement (rental agreement) but no more than 2 years; - subsidies to the small and medium-sized business to compensate for the initial payment paid under an agreement of
leasing of equipment, devices, engines, vehicles (excluding passenger cars), machinery and other means and technologies; - establishment of a regional fund for the small and medium-sized business meant for providing guarantees and microloans to the small and medium-sized businesses and operators of the small and medium-sized business support infrastructure; - partial subsidizing of expenses of credit consumer cooperatives and agricultural credit consumer cooperatives for interest paid on loans issued by the Russian lending organizations to the members of cooperatives being small and medium-sized companies for business activity. - subsidizing of expenses of small-sized companies starting their business activity (sole proprietor under the age of 30 and legal entities in which 50% of authorized capital is owned by persons under the age of 30) for the development of business conducted in key sphere for the region; - subsidizing of expenses of small and medium-sized companies
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Regulatory Legal Acts Investment Support
for development, implementation and certification of quality management system in compliance with the international standards; - partial subsidizing of expenses of small and medium-sized companies, organizations providing support to small and medium-sized companies for power saving measures. - partial subsidizing of expenses of small and medium-sized companies for payment of the services related to compliance with the Law of the Russian Federation and/or of an importing country which shall be followed to export the goods (services); - partial subsidizing of expenses of small and medium-sized companies for payment for services related to development of tools for the legal entity identification and identification of goods (services) subject to export; - partial subsidizing of expenses of small innovative businesses on: - payment under agreements on examination and development of new products, services and production methods (distribution), of new production processes; - purchase of new technologies (incl. patents; licenses for the use of inventions; industrial prototypes and useful models); - purchase of software; - training of employees related to innovations; - rent of premises necessary for business operations (max. 3 months); - purchase of machines and equipment related to innovations; - marketing research; - certification and patenting; - production planning, design and other developments (not related to scientific examination and developments) of new products, services and production methods (distribution), of new production processes; - participation in trade fairs and exhibitions, business meetings of
innovative companies related to promotion to regional and international markets of products and services, and meetings that stipulate exhibition of the goods; - partial subsidizing of expenses of small and medium-sized companies for training received under the State Plan For Management Training.
Agriculture Development in Lipetsk Region 2009–2012 regional program adopted by the Decree No. 275 of the Lipetsk Region Administration dated September 10, 2008 (as amended on January 17, 2011)
- subsidizing of expenses to purchase breeding pigs; - subsidizing of expenses to keep breeding pigs; - partial subsidizing of expenses on production of pork; - subsidizing of expenses on bio products sale; - subsidizing of expenses on cattle breeding; - partial subsidizing of expenses to keep cows in households; - subsidizing of expenses to connect power units to power systems in dairy farms; - subsidizing of expenses to purchase compound feeds and/or ingredients for their preparation by the enterprises engaged in eggs production for food; - partial subsidizing of expenses on production of eggs; - partial subsidizing of expenses on production of poultry meat; - subsidizing of expenses on repairing and renovation works to put into operation unused ponds; - partial subsidizing of expenses on sale of fish seeds; - partial subsidizing of expenses to keep fish; - partial subsidizing of expenses on sale of produced goods; - partial subsidizing of expenses on mineral fertilizers; - subsidizing of expenses on irrigation and drainage measures; - partial subsidizing of expenses on soil chemical analysis of agricultural lands; - subsidizing of expenses on development and cultivation of perennial plants; - subsidizing of expenses on purchase of elite seeds; - subsidizing of expenses on purchase of means of chemical protection; - partial subsidizing of expenses on interests paid on loans issued for 1 year by Russian lending agencies and loans received from agricultural lending consumer cooperatives for seasonal works;
- partial subsidizing of expenses on interests paid on investment loans issue by Russian lending agencies and loans received from
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Regulatory Legal Acts Investment Support
agricultural lending consumer cooperatives; - partial subsidizing of expenses on interests paid on loans issued by Russian lending agencies and loans issued by agricultural lending consumer cooperatives to agricultural consumer cooperatives; - subsidizing of expenses on interests paid on loans issued by Russian lending agencies and loans issued by agricultural lending consumer cooperatives to farms; - partial subsidizing of expenses on interests paid on loans issued by Russian lending agencies and loans issued by agricultural lending consumer cooperatives to households; - partial subsidizing of expenses on interests paid on loans issued by Russian lending agencies and loans issued by agricultural lending consumer cooperatives to households, loans issued for tourism development in rural areas including folk craft development, trade in rural areas, provision of utility and public services for rural population, picking and processing of wild fruits and berries, medical herbs and other food resources and non-timber forest products; - partial subsidizing of expenses on interests paid on loans issued by Russian lending agencies and loans issued by agricultural lending consumer cooperatives agricultural consumer cooperatives for construction and reconstruction of agricultural markets and agricultural cooperative markets, trading places, for sale of agricultural products; - partial subsidizing of expenses on insurance of crop yield, perennial plants and their yield.
Development of Beef Cattle Breeding in Lipetsk Region 2009-2012 regional program was adopted by the Decree No. 249 of the Lipetsk Region Administration dated July 13, 2009 (as amended on December 02, 2011)
- subsidies to compensate for some expenses on the technological modernization of meat production farms; - partial subsidizing of expenses on sale of beef well-bred and/or young cattle; - partial subsidizing of expenses on keeping of breeding stock (cow with calf); - subsidies to compensate for some expenses on the purchase of pure-bred and/or mongrel young meat stock.
Development of Dairy Cattle Breeding in Lipetsk Region 2011–2012 regional program was adopted by the Decree No. 258-a of the Lipetsk Region Administration dated July 21, 2011 (as amended on October 05, 2011)
-partial subsidizing of expenses on purchase of dairy cattle stock; - partial subsidizing of expenses on sale of milk.
The Lipetsk Region Law No. 316-OZ (316-ОЗ) dated August 18, 2006 “On regional special economic zones” (as amended on October 27, 2010)
- regional corporate profit tax discount, corporate property tax break and transport tax break granted in compliance with the tax legislation of the region; - credit subsidies for the residents of the regional special economic zones running the investment projects; - subsidies for the residents of the regional special economic zones to aid the territory landscaping projects.
Resolutions of District (Municipal) Deputies Committee of the Lipetsk Region
The residents of regional special economic zones are exempted from land tax for the lands located in the regional special economic zones after the title to land is registered. A 0.1% rental rate for the land rented by the residents of the regional special economic zones and located in special economic zones is applied for the period of the sites construction; and a 1% rental rate is applied for lands rented to carry out the business operations.
The special economic zones are managed on the one-stop-shop principle.
Reasons to Invest in the Lipetsk Region
This politically stable region is one of the most dynamic regional economies of Russia showing a strong
socio-economic performance. The region has the following strengths:
• favorable geographical location in the centre of European Russia; • federal railways and motorways; • government support for investors in the Lipetsk Region; • investor-friendly administration;
• established practice of interaction with investors in their best interests; • consulting services for investors;
16• skilled labor and management resources; • extended banking infrastructure; • extended communications infrastructure; • high-technology manufacturing business, including that with foreign capital; • soil and climate conditions favorable for agricultural and processing activities; • ample accommodation infrastructure; • convenient hotels and apartments, balneotherapeutic health resort with deposits of mineral waters and therapeutic muds.
Major Investment Projects being Implemented or to be Implemented in the Lipetsk Region
No.
Investment Project Volume of Investment,
RUB bn
1. Infrastructural development of the Lipetsk Special Economic Zone of industrial-manufacturing type The SEZ key areas are engineering, metalworking, electric and power-plant engineering, and production of construction materials. The total Lipetsk SEZ territory amounts to 1,024 ha. Infrastructural facilities occupy about 320 ha. It is planned to expand the Lipetsk SEZ to 2,000 ha. In 2025, about 45 residents will invest more than RUB 120 billion and create 15,000 work places, with tax expenses of RUB 24 billion. Construction of infrastructure for the first stage of the SEZ development has been completed
17.8
2. Infrastructural development of the regional special economic zones The priority is export-oriented, import-substituting and innovative products in metalworking, construction and food production, transportation and primary and secondary warehousing, food processing, agriculture, tourism and recreation. The total territory of the SEZ is 196,921 ha. Over 38,000 work places will be created. Projected total taxes amount to RUB 6,800 million per annum. The work and cost sheets, including a feasibility report, have been prepared. Facilities of RUB 1,535.5 million have been commissioned.
16.5
3. Construction of ZAO Rafarma antibiotics and anticancer drugs plant Production of 58 FPP, 101,167 thousand antibiotics per annum and 869 thousand cytostatic drugs. Vnesheconombank (the State Corporation Bank for Development and Foreign Economic Affairs) has started boosting EUR 66 million into the project. The land plot of 24 ha has been leased. There have been built the administrative facilities and a warehouse. In June 2011, the first line of the plant was commissioned.
3.6
4. Construction of the cement plan Construction of OOO Doncement cement plant with capacity of 1.5 million tons per year The plant will use energy-saving “dry-type” technologies. According to the plant and mining pit design, it is planned to use modern and high-efficiency resource-saving technologies developed under the EU and World Bank standards. A license on mining of Cherkassy mineral deposit of cement limestones has been applied for to the Subsoil Management Department for the Russian Central Federal District. Prospective investors are being searched for.
12
5. Development of Kuznechnaya Sloboda, Industrial Park (Lebedyan District) The park is developed as a part of OAO Stroymash. The infrastructure is expanded and the workshops are reconstructed to locate the facilities and place the foreign investors' orders. The managing company is registered. The relevant authorities have approved the industrial park concept. Both national and foreign companies are involved.
0.3
6. Development of Gryazi Industrial Park (Gryazi District) The park is developed as a part of OAO Gryazi Cultivator Plant. The infrastructure is expanded and the workshops are reconstructed to locate the facilities and place the foreign investors' orders. The managing company is registered. The relevant authorities have approved the industrial park concept. Both national and foreign companies are involved.
0.25
7. Construction of the Lipetsk industrial area eastern bypass road in the Gryazi District of the Lipetsk Region II technical grade 1.7 km long It is a regional public road which connects Lipetsk and the SEZ with other regions' and territories' municipalities and serves as the international traffic artery due to its crossing with M4 and M6 highways (also known as the Don and Caspian Highways). The first 12.95 km long part of the road has been completed.
7.9
17
8. Lipetsk airport reconstruction and enhancement under the following federal target programs: Russian Transport System Modernization 2002–2010, Russian Transport System Development 2010–2015, Uniform Air Traffic in Russia 2009–2015 and State Border of the Russian Federation 2011–2016 Capital investments exclude the expenses for development of the Russian check point and modernization of the ATM system equipment. The project documents have been prepared, with the report of the federal state agency General Board of State Expert Review received.
1.2
9. Construction of OOO Sigma small aircraft plant hi-tech mass production of aircraft GA aircraft repairs and maintenance center an all-year entertainment and sports center, with skydiving training courses and flights. A pilot school provides the GA private pilot training including air tunnel and jump Construction of hotel facilities of seven two-storey private houses and an assembly plant.
0.3
10. Construction of the Romanovo satellite town to accommodate the employees of the residents of the Lipetsk Special Economic Zone of industrial-manufacturing type The town occupies the area of 5.7 thousand ha, with population of 130 thousand people. The total residential area amounts to 6 million sq m. The project is aimed at providing people, including the Lipetsk SEZ employees, with more available and better housing. The first part of housing amounting to 1.3 thousand ha has been let out.
222.3
11. Construction of a multi-purpose sports center in Molodiozhny Park, Lipetsk The sports center occupies the area of 10 ha. It includes a swimming pool of 50 m, a skating-rink of 60х30 m, a fighting gym, a gym for team sports, a family aquatic center, and a hotel for 150 people. 5 thousand people may be housed at the same time. The project documents have been prepared. The tender documents for construction of a sports center are being prepared at the moment.
2.5
12. Construction of a surgical department of the regional oncology clinic Project-research works are carried out.
1.3
13. Development of the Yeletsky Residential Area According to the project, it is planned to construct 2 schools for 2,220 pupils, 2 kindergartens for 420 children, several hospitals, a pool, a cinema and a music hall, libraries, shops, a hypermarket, consumer and utility service centers, parking lots and other facilities. The project is aimed at improvement of housing. Construction of utilities
15.8
14. Construction of Roshen Chocolate Factory The output is expected to reach 253 thousand tons of confectionery products per annum. The plant will occupy 23 ha in the village of Kosyrevka and include a chocolate product plant and a distribution center. Upon signing the relevant agreement the first stage of construction has been approved.
In February 2012, the Additional Agreements with General Contractor and other contracts on further project operations were signed.
7.4
15. Development of agribusiness in the Lipetsk Region (Yeletsprom Regional Special Economic Zone) Poultry slaughter and process plant – 24,000 birds per hour. Feed factory with a storage capacity of 80 tons per hour and 150 thousand tons of grain. Incubator – 150 million eggs per annum. 128 poultry yards for young and parent flocks of 900 thousand animals. Annual pork output will grow to 248,000 tons (live weight), and the final pork products amount to 174,000 tons. In January 27, 2011, it was registered as the Regional SEZ, The Land Plot Rental Agreement was signed. In June 28, 2011, the construction was launched.
21
16. Construction of a sugar plant with processing capacity of 12,000 tons of sugar beet per day The plant aims at the processing capacity of 1.1 million tons of sugar beet and 100 thousand tons of raw sugar per annum. The annual normal output of beet sugar reaches 157.8 thousand tons, of raw sugar – 96 thousand tons, granular dried beet pulp with 6.62% of moisture – 54 thousand tons and molasses with 5.6% of moisture – 61.75 thousand tons. There are work and cost sheets prepared. The approval of the General Board of State Expert Review and the construction permit are received. OOO Korni Terbuny Sugar Plant has signed an agreement on joint implementation of the investment project with Vnesheconombank, the Russian Ministry of Agriculture, and Lipetsk Regional Administration.
7.7
17. Construction of OOO Ecolife rendering plant (100 tons per day) The latest technologies are used to dispose bio wastes. The project works are almost completed.
0.3
18
18. Lipetsk industrial beef production model of OOO Albeef The project includes reaching the beef output of 30,000 tons, organizing forage resources, constructing two young stock finishing sites with a capacity of 13,000 animals per each, processing beef at the specialized advanced enterprises with a capacity of 21,000 tons per annum. It also presupposes organizing breed reproducing conditions for particular meat stock of 3,000 animals, 50 small family farms for breeding and finishing cattle of 20,000 animals. A finishing site with the capacity of 13,000 animals has been put into operation. The stock amounts to 2,600 cows and heifers of the Aberdeen-Angus breed. The project also includes processing beef in a new modern plant and selling it in the sales pavilions.
1.460
19. OOO Lipetskoye moloko (Khlevnoye District): Cattle breeding farm, 1,200 cows According to the project, it is planned to organize a hi-tech agricultural plant with a closed-cycle milk production, processing and selling. The project includes construction of 8 dairy farms for 1,200 cows, a dairy plant and a trade network of 20 car shops. The capacity of the dairy plant – 50 tons per day. The output of dairy products – 32–38 tons per day. Four farms – completed in 2010, other 4 farms – construction in progress.
0.931
20. OOO Motorinvest The project is development of car component production facilities. In February 2012, the production facility will be finished and equipped.
6.7
Total: 347.2
Foreign Economic Activity
In 2011, region's foreign trade turnover made up USD 6.2 billion (+26% year-on-year). The region exports ferrous materials and products, engineering products and foodstuff to the foreign
markets. The region imports mainly engineering products. Main trade partners in export activities are: Italy, Germany, Denmark and Turkey. Principal share in the
import geography belongs to Ukraine, Germany, USA, China and Italy. Growing number of regional businesses involved in foreign trade activity has export trade partners in over 80 countries all over the world.
Export increased by 23% and amounted to USD 4.8 billion. Import grew by 39% and reached USD 1.4 billion.
International Operations The region enhanced the cooperation with its investment partners from Japan. The cooperation with the
Japanese Culture Association resulted in the Japan World Heritage exhibition of photographs in Lipetsk and Yelets. The region strengthened its contacts with Italy. The region's cooperation with Hungary was also expanded. Primary attention was paid to developing the CIS contacts. Many visitors from all over Russia came to the region. The region participated in the Russian and German exhibitions.
Special Economic Zones
Lipetsk Special Economic Zone
Under the Federal Law “On special economic zones in the Russian Federation”, the Lipetsk Special
Economic Zone of industrial-manufacturing type was established in the Lipetsk Region by virtue of the Russian Government Decree No. 782 of December 21, 2005.
The special economic zone was established in order to attract home and foreign investment in the region, to develop high-tech production capable to meet the requirements of Russian economy and international standards, and to promote export of goods.
As of January 1, 2011, there are 18 residents registered in the zone: 1. OOO Chagoda Glassworks – Lipetsk, production of lightweight glass containers for the food and medical
industries. Total area – 12.5 ha; Estimated investments – RUB 1,331.3 million; actual investments – RUB 4,272.142 million.
2. OOO SEST LUVE, production of evaporators and condensers for refrigerating equipment. Total area – 3 ha; Estimated investments – RUB 360 million.
3. OOO Bekaert Lipetsk (Belgium), production of metal cord and bead wire. Total area – 20 ha; Estimated investments – RUB 3,496.68 million.
4. OOO ALU PRO (Italy), production of aluminum window frames. Total area – 1.97 ha; Estimated investments – RUB 370 million.
5. OOO Fenzi (Italy), production of compressors used in glass making. Total area – 3.93 ha; Estimated investments – RUB 550 million.
6. L.L.C. YOKOHAMA R.P.Z. (Japan), tyre production. Total area – 24 ha; Estimated investments – RUB 11,733 million.
7. OOO RATIONAL Industrial Enterprise (OOO PK RATIONAL, Russia), production of heat and power equipment and pipe fittings. Total area – 11.5 ha; Estimated investments – RUB 1,797.995 million.
198. OOO LZSK Okonniye sistemy (Russia), production of plate glass translucent structures (incl. window
frames, safety glass, heat-strengthened glass), plate glass forming and processing. Total area – 5.9 ha; Estimated investments – RUB 477 million.
9. OOO Lipetsk Offset Printing Plant (OOO LIOKOM, Russia), production of large-circulation print media. Total area – 8 ha; Estimated investments – RUB 3,979 million.
10. OOO Grazhdanskiye pripasy (Russia), production of plastic capsulated catridges. Total area – 8 ha; Estimated investments – RUB 2,690.678 million.
11. OOO Mondial Group East (Italy), production of commercial refrigerating equipment. Total area – 6 ha; Estimated investments – RUB 763 million.
12. ZAO Russian Centre for Nanotechnology (ZAO RCNT, Russia), production of fullerenes and nanodispersed materials. Total area – 7.6 ha; Estimated investments – RUB 1,296.438 million.
13. OOO Solar Industrial Company (OOO SOLINCOM, Russia), production of multicrystalline silicon ingots and wafers for solar power engineering. Total area – 3.21 ha; Estimated investments – RUB 1,371.816 million.
14. OAO Energotechnologii Lipetsk (Russia), production of electric and heat energy. Total area – 24.6 ha; Estimated investments – RUB 17,045.808 million.
15. OOO Belon-Metakon (Russia), production of metalware, sandwich panels and mineral wool heat insulators.
Total area – 6 ha; Estimated investments – RUB 522.268 million; actual investments – RUB 1,331.2 million. 16. OOO RosMedTechnology-Lipetsk (Russia), production of pharmaceuticals. Total area – 2 ha; Estimated
investments – RUB 2,200 million. 17. OOO AWT (Russia), production of metal wire, strip and tape. Total area – 10.79 ha; Estimated investments
– RUB 2,000 million. 18. OOO LUNCSES Lipetsk (Germany), production of components and tools for car tyres and other industrial
rubber products. Total area – 1 ha; Estimated investments – RUB 208.7 million. 19. OOO Silicon Carbide Technologies (Russia), production of micropowders and ceramics for various application
in hi-tech. Total area – 10 ha; Estimated investments – RUB 2,100 million. 20. OOO Intelpro (Russia), production of modern metal processing machines and a small-scale output of specific
components. Total area – 1.5 ha; Estimated investments – RUB 465.5 million. 21. ZAO Avtocrater (Russia), production of special vehicles and machinery. Total area – 3.5 ha; Estimated
investments – RUB 486 million. 22. OOO Garda Nitting (Russia), production of consumer products. Total area – 2 ha; Estimated investments –
RUB 242.9 million. Total area occupied by residents is 177 ha out of 1.024 ha.
Residents of the special economic zone receive government support: - at the federal level:
− higher (doubled) rate of depreciation (residents have the right to apply special factor, which shall not exceed 2, to the rate of depreciation with regard to their own fixed assets);
− no restrictions to carry forward losses to future years; − writing-off of R&D costs (including those with no positive result) during R&D period; − no regulatory changes (excluding excisable goods taxation regulations) are applied to the residents of the
zone during the whole period of agreement; − tax breaks (free customs zone): − foreign goods are imported free of customs duties and VAT; − Russian goods are treated under export customs policy, excise paid, free of export duties; − when exporting goods from the special economic zone to a destination outside Russia, no entrance duties
and taxes are levied, export duties are paid same as for common export procedure, excluding foreign goods that enter and leave the zone without any change. - at the regional level:
− corporate profit tax discount of 4.5 percentage points is applied to the profit gained from operations carried out in the territory of the special economic zone in case of separate accounting of income (costs) gained (incurred) from (on) operations carried out in the territory of the special economic zone and income (costs) gained (incurred) from (on) operations carried out outside the territory of the special economic zone for a period of 5 years from the moment when such profit is gained for the first time, and for a period of 7 years from the moment when such profit is gained for the first time in case of production of export-oriented and/or import-substituting goods, if the income from sales of such goods accounts for at least 50% of total income from sales of goods (services).
− exemption from corporate property tax for a period of seven years from the moment when the property is entered in the books for the first time;
− exemption from land tax for a period of five years from the moment when the right of ownership accrues; − exemption from transport tax for a period of ten years from the moment when a transport vehicle is
entered in the books for the first time;
− maximum rental rate for land plots is 2% of their cadastral value per year. − non-financial government support: − one-stop-shop approach; − no town-planning requirements applied to the land plots located within the special economic zone; − no member of the special economic zone may be deprived of its residential status other than judicially.
The Lipetsk Special Economic Zone offers the access to essential infrastructure: branch railway, access ways, power station, high pressure gas pipelines and treatment facilities. More facilities are under development: utility networks, water supply and drainage systems, transformer substations. Along with land plots, residents of the special economic zone receive access to essential production infrastructure.
Regional Special Economic Zones
20The Lipetsk Region Law No. 316-OZ (dated August 18, 2006 “On regional special economic zones” lays
a foundation for faster economic development of regional municipalities, expand the income base of their budgets, and create an attractive investment climate.
Functions of each regional zone are defined by its purpose and operations. The Lipetsk Region has 8 regional special economic zones of different types, i.e. 4 industrial, 2 tourist
zones, and 2 agricultural and innovative special economic zones. At present, the total area of the regional SEZ amounts to 196,845.4 ha. It includes the territories of Lipetsk, Yelets, Terbuny, Chaplygin, Dankov and Zadonsk Districts. The main benefit of these territories is that they ensure a closer location to federal and regional highways and have a developed engineering infrastructure.
The purposes of regional SEZ are as follows: • diversification of the regional economy; • replacement of imported goods by domestic products, development of modern processing industries,
tourism and resorts; • integrated development of the municipalities.
As of January 01, 2012, the regional SEZ have 31 residents from 5 countries (Russia – 26, Germany – 2, Austria – 1, Czech Republic – 1, China – 1). Investments into SEZ reached RUB 64,263 million, the output of
goods and services – RUB 8,063 million, tax expenses – RUB 335 million, number of jobs – 1,150. Construction of engineering infrastructure in the regional SEZ was financed through different sources
including regional and municipal budgets, OAO Regional SEZ, OAO MRSK Tsentra – Lipetskenergo, OAO Lipetskoblgas, OAO Rostelecom and by the regional SEZ residents. Total investments amounted to RUB 1,556 million including RUB 184 million of 2011.
Terbuny Regional Special Economic Zone of Industrial Type The total territory of the SEZ is 992 ha. The estimated jobs are 10,000. One of the residents of Terbuny SEZ is Terbunskiy Gonchar brick factory with the annual capacity of 40
million bricks. The SEZ has seven residents. The investments reached RUB 3,436 million rubles. 201 new jobs were
created. Terbunskiy Gonchar brick factory already functions. Its total capacity is 40 million pieces per year. In 2011, ZAO Rafarma commissioned the first production line of antibiotics and anticancer medicines. Total
investments: RUB 2,050 million; number of jobs: 82. It is planned to construct agricultural processing and freezing factories, animal feed factory, and an
elevator, a vegetable warehouse and a sugar plant in the regional SEZ. To provide the future residents of SEZ with an adequate engineering infrastructure the SEZ has already
prepared work and cost sheets for the water supply and sewage system, and a part of it has already been constructed. A 110/10 kW power substation with two 25 MVA transformers has been commissioned. The SEZ has already constructed a distribution unit and a 2 km long overhead power line with the capacity of 10 kW, a gas pressure pipe line, fiber glass communication lines, internal roads and an overhead railway crossing. Total investments into Terbuny SEZ reached RUB 1,016 million.
Chaplygin Regional Special Economic Zone of Industrial Type The total territory of the SEZ is 473 ha. The estimated jobs are 3,000. He SEZ focuses on steel making, engineering and chemical industries. The SEZ has 5 residents. Total investments amounted to RUB 1,042.4 million; number of jobs – 70. In 2011, the first stage of the Hawle plant (Austria) producing valves and fittings was completed. Total
investments amounted to RUB 425 million, number of jobs – 25. Another resident, Ropa-Rus (Germany) assembles, sells and maintains beet harvesters. Total investments
amounted to RUB 147 million, number of jobs – 28. Investors finance construction of the designed facilities, with a drip irrigation equipment plant established
by ZAO Novyi Vek Agrotechnologiy and a plant constructed by OOO Khorsh-Rus to assemble soil processing machinery for beet growing. The first production lines of the enterprises will be commissioned in 2012.
The SEZ has completed installation design of power supply and sewage systems. There is a car gas fuel station, water pipeline, fiberglass communication line, a high-pressure gas pipeline
with the annual capacity of 300 million cub.m of gas constructed in the SEZ. The first part of the sewage system, a distribution unit, a 10 kW overhead power line and an internal road have already been completed. Total investments into Chaplygin Regional SEZ reached RUB 195 million.
Dankov Regional Special Economic Zone of Industrial Type
The total territory of the SEZ is 355 ha. The estimated jobs are 3,000. The SEZ focuses on food, processing, construction and chemical production. In 2011, OOO Dankov Sugar Plant became a resident of Dankov SEZ. Its estimated investments amounted
to RUB 6,298 million, number of jobs – 180. It is planned to construct facilities for the secondary processing of tires, the wood pellets production, potato
and sunroot processing and greenhouse facilities. The residents are provided with the water supply and sewage system and a reconstructed road along the
SEZ. A 110/10 kW substation with two 40 MVA transformers, a 1.5 long cable line and the second distribution unit for the WPS power supply have already been designed. Total investments into Dankov SEZ reached RUB 59 million.
In 2012, the storm sewage system and power and communication lines will be constructed in the SEZ. Yeletsprom Regional Special Economic Zone of Industrial Type
21The total territory of the SEZ is 270 ha. The estimated jobs are 5,000. The SEZ focuses on food, processing, construction and consumer production. In 2011, OAO Kurinoe Tsarstvo became a resident of Yeletsprom SEZ. A cornerstone ceremony marked the
investment project launched by OAO Cherkizovo Group in Yeletsprom Regional Special Economic Zone of Industrial Type.
A 5-year investment project includes construction of pork and poultry slaughter and process plants, a feed factory, an elevator with the storage capacity of 420,000 tons of grain, public transportation companies for 300 refrigerator trucks, logistics center, housing facilities for high-qualified employees and poultry breeding facilities including an incubator, poultry yards for young stock and parents, poultry yards for broilers.
The project will increase the pork and poultry output to 250 thousand tons and 230 thousand tons respectively. Total investments will amount to RUB 19.5 billion. 4,000 jobs will be created in the SEZ.
The project of OAO Kurinoye Tsarstvo will be the largest in Russia. It is supported by the Russian Agricultural Ministry and will contribute much to food security both of the region and the country.
Astapovo Regional Special Economic Zone of Agricultural Type The SEZ occupies 96,820 ha and covers the whole territory of Lev-Tolstoy district. The estimated jobs are
3,000. The SEZ focuses on agricultural, food, processing, industrial and construction production. Astapovo SEZ is a meat processing center of the Lipetsk Region. OAO Cherkizovo Group has successfully
launched the pork production project in the SEZ. Total investments of OAO Lipetskmyasoprom amounted to RUB 375 million, number of jobs – 782.
A mushroom growing factory is now constructed. Investments in the project will amount to RUB 1.7 billion. Astapovo SEZ has turned Lev-Tolstoy district into a financially independent municipality.
Regional Special Economic Zones of Tourist Type Yelets and Zadonshchina are two SEZ of tourist type established by Lipetsk Regional Administration under
Resolution No. 195 dated December 29, 2006. It is planned to construct over 250 tourism facilities in the Regional SEZ of tourist type. The construction
plans include hotels and hotel complexes, restaurants, cafes, open-air stages, modern sports centers, shopping malls, tennis courts, parking areas with car service stations, club cottages, entertainment centers, recreation centers, housing and infrastructural facilities. It is also planned to restore historical and architectural sites including old mansions and organize tourist routes and sightseeing tours for guests and residents of the region.
There are 8 tourist routes in Yelets and 13 routes in Zadonshchina in the design plans of the SEZ. Development of these SEZ will be based on the adequate infrastructural facilities existing in both of them.
Zadonshchina Special Economic Zone of Tourist Type The total territory of the SEZ is 97,000 ha. Zadonshchina SEZ is located beside the Don River on the
territories of Skornyakovskiy, Doskoy, Butyrskiy, Kasharskiy, Kazachenskiy, Ksizovskiy, Kamyshevskiy, Kamenskiy, Bolkhovskiy, Khmelinetskiy, Yurievskiy.
The estimated jobs are 4,000. The SEZ includes tourist, sports and recreation facilities. It has 10 residents, RUB 235 million of total investments and 31 jobs. Investors of the SEZ plan to finance construction of an all-year entertainment center, hotel, sports
facilities, fun parks, residential area and a water bottling plant. Historical sites, such as Mansion of Muraviev-Karskiy, are now renovated.
Construction of Zadonsk entertainment center and Skit recreation facility in Kashary settlement is almost completed.
Yelets Regional Special Economic Zone of Tourist Type The total territory of the SEZ is 931 ha. It is located in the central part of Yelets and on the territory of six
separate areas. Area No.1 is Yelets central part. Area No.1A lies in the Monostyrskaya Settlement district in the northern part of Yelets, on the southern
hillside beside the Yelchik river and border the estate area down Tselykovka Street. Areas No.2, 3, 4 are located at the crossing of M4 highway and Kommunarov Street. Area No.5 lies to the northwest from the city center and borders the forest near the skiing lodge.
Area No.6 is planned to replace obsolete two-story residential houses at Kommunarov Street. The estimated jobs are 10,000. The SEZ includes tourist, sports and recreation facilities. It has 4 residents, RUB 47.1 million of total investments and 55 jobs. Residents of the SEZ plan to finance construction of hotels, a shopping mall housing a cafe and family
entertainment facilities. It is also planned to modernize Petrovskiy Park and turn it into an entertainment center, and to construct a
hotel complex.
Lipetsk Tekhnopolus Regional Special Economic Zone of Innovative Type It is established by Lipetsk Regional Administration under Resolution No. 470 dated December 22, 2010. It occupies an area in the Lipetsk city district. The total territory of the SEZ is 4.4 ha. The estimated jobs are 300.
22The SEZ of Innovative Type is a progress sector based on individual initiatives and motivated
development and introduction of inventions. It allows to identify the most efficient government incentive programs for inventors, and determine whether there is a consumer demand for R&D products and sufficient intellectual and technological potential to meet it.
The SEZ territory is divided into two parts. The plans are to establish a nanotechnology center near the Lipetsk State Technical University focused on development and implementation of innovative technologies in metal processing, energy saving and construction. Prototypes will be tested and prepared for batch production in the technology park which will be situated on the left bank of the Voronezh River.
The innovative SEZ will create a unique environment for innovative entrepreneurship to commercialize the regional scientific and inventive potential. It will help to make a new step in technology development and increase production capacity, both in science intensive industries (steel making, engineering, energy saving, IT, industrial chemistry, designing of new materials, nanotechnologies) and related sectors. Besides, it will increase the number of small and medium businesses and their employees and improve investment climate to establish innovative-industrial clusters in Lipetsk.
Investment Memorandum of Lipetsk region for the year2012
1. General Provisions 1.1. Investment memorandum of Lipetsk region (hereinafter - the Memorandum) establishes the main priorities for the development and support of investment activity in the Lipetsk region. 1.2. Point of accountability for the implementation of the provisions of this Memorandum is the Department of Investment and International Relations of the Lipetsk region (hereinafter - the Coordinator). 1.3. Monitoring of the implementation of the Memorandum is provided by the Coordinator. 1.4. The text of the Memorandum is included in the list of public information resources of the Lipetsk region.
2. The main directions of investment policy
The main directions of investment policy of the Lipetsk region are:
• creation a favorable investment climate in the area; • improving the legal framework governing the investment activities; • transition into innovative development mode; • improving the mechanism for attracting investment; • increasing efficiency of investment activity state support use; • active support efficient investment projects for production of competitive products; • introduction of environmentally friendly (no waste) technologies, the use of modern high performance systems of water purification, air pollution, waste disposal - the greening of industrial production; • intensification of investment's attraction in high-tech industry, based on the "economy of knowledge",
producing competitive products that meet international standards (with a high level of productivity and added
value);
• energy-saving technologies, information and communications technology and electronics, implementation
of new materials and chemical technologies;
• creating conditions for mobilizing domestic and increasing the flow foreign investment resources and new technologies in the region's economy; • expanding the sources of investment; • implementation of measures on information coverage of area capacities and proposals for the resource and tourism industries development; • alignment of the initial conditions for the investment processes in municipalities with different levels of development; • development and dissemination of information about investment opportunities in selected areas of the
Lipetsk region; • improvement the system of information-analytical support of innovation activity, creation and updating of the database of innovations made in the region, in the Russian Federation and abroad, which are of interest to companies in the region; • improvement of the complex cluster-based approach to:
- development of special economic zones of the federal and regional level; - creation and development of industrial parks; - development of public-private partnership; - active work of the Administration of the Lipetsk region with development institutions at the federal level
(Investment Fund of RF, Vnesheconombank, JSC "RUSNANO" etc.), venture capital funds, departments and agencies to develop an innovative economy and efficient infrastructure-business environment; • use of mechanisms to promote investment projects through the possibilities of Chamber of Commerce and Industry of the Russian Federation; • information and staff support of investment activity.
3. The priorities of investment policy
23 Priority areas of investment policy of the region - development of investment activity infrastructure, strengthening measures to reorientation of investments flow to high technology industry, as well as information, personnel support of investment activities.
Priority directions for investment attractions to Lipetsk region based on existing competitive strengths of the region, as well as the target set for the modernization of traditional industries and develop of new types of economic activities: • mechanical engineering, electrical engineering, power engineering - the creation of modern high technology science-oriented industries, producing competitive products that meet international standards; • metalworking - projects aimed at integration into the international process chains; • production of building materials (manufacture of other nonmetallic mineral products) - ensuring production of the modern competitive building materials in quantities that meet the needs not only of the Lipetsk region, but also neighboring regions; • agricultural sector of the economy - providing release of environmentally friendly products, taking into account the climatic conditions and territorial characteristics; • food and processing industry; • production and distribution of electricity, gas and water;
• logistics infrastructure; • tourism and recreation projects in the creation of tourism clusters in the Lipetsk region; • investment projects aimed at developing the mineral resources base of the region; • aircraft industry (general purpose aviation); • production of agricultural, vehicles and automotive components.
4. The subjects of investment activity
The subjects of investment activity are investors, customers and performers of works, the users of the investment activity objects, as well as providers, legal entities (banks, insurance companies and intermediaries, investment exchanges) and other members of the investment process.
The subjects of investment activity can be individuals or legal entities, including foreign ones.
5. The interaction of investment activity subjects
The order of investors' interaction is established in the framework of existing legislation and implemented in accordance with international treaties of the Russian Federation, federal laws and regulations of the Russian Federation, laws and regulations of the Lipetsk region, regulations of municipal authorities.
6. Principles of investment policy in the Lipetsk region 6.1. Support of investment activity
Administration of the Lipetsk region is ready to offer investors favorable conditions for realization of investment projects in the area in accordance with applicable law, to provide state support for investment projects.
6.2. Equal conditions for Russian and foreign investors
Administration of the Lipetsk region provides equal opportunities for both Russian and foreign investors, focusing in particular on social, economic and environmental effectiveness of the investment project, opportunity of creation and development of enterprises-satellites.
The Lipetsk region is interested in companies focused on the further expansion of business, regardless of what country they represent.
6.3. Ensuring the investor's right to free choice of the counterparties
Administration of the Lipetsk region strictly adheres to the investor's right to free choice of contractors, suppliers and any other contractors, ensures the non-interference in the administrative and business activities of the investor, which implements the project in the Lipetsk region.
6.4. Reducing administrative barriers
In Lipetsk region the investor are offered sites, which have the necessary infrastructure. In the Investor policy of the Lipetsk region is aimed at reducing administrative barriers, minimize corruption risks, as well as the development of the "single window" system and the transition to the provision of public and municipal services in electronic form.
6.5. Investors' rights protection
Head of Administration of the Lipetsk region is the guarantor of investors' rights protection in the Lipetsk region. The protection of investors from making laws, which could affect investors' position within the competence of the Lipetsk region are guaranteed.
246.6. The development of living environment
Administration of the Lipetsk region considers it important to create a comfortable living environment for residents and visitors to the region. One of the main directions of economic development of the Lipetsk region is the formation of an infrastructure of training, recruitment and retention of highly qualified personnel. This direction includes a program to provide housing qualified professionals, as well as the formation of a comfortable living environment (a comfortable, decent housing for enlisted personnel of the enterprise, social and cultural facilities, including schools, leisure centers), including affordable and high quality transport and logistics system, which allows move freely within the region and in Russia.
7. Work with Investors order
At all stages of the investment project in the Lipetsk region invesor is accompanied by the officials of the certain governmental officials, municipal authorities, who provide the investor by information materials necessary for making decisions, organizing business meetings, ensure the implementation of the necessary legal procedures, coordinating with the investment project development strategy of the area.
The Work with Investors' order includes pre-investment and the investment phase of the project.
7.1. Pre-investment phase of implementation
Basic services provided by administration of Lipetsk region at pre-investment phase of the project implementation: • providing information to potential investors about the possibilities of placing the proposed investment project (investment sites, existing enterprises ready to consider offers of cooperation, etc.), information on socio-economic situation of the region and the municipal district, transport schemes, the personnel potential of the region (districts), natural resources, etc.; • provision of reception and support of the investor in the region to visit investment sites, organizing and conducting the negotiations (with local authorities, with energy companies, potential partners, etc.); • consulting investors on issues related to the implementation of the project, about the potentials that an investor can use to implement an investment project (co-operation with existing businesses that operate in the region, joint ventures etc.; • between the regional administration and the investor may be sighed a memorandum of intentions, which indicates: 1) the general parameters of the project (before selecting the landplot), 2) the obligations of the parties relating to information exchange, assistance to the investor by the regional administration in refining the parameters of the investment project, as well as a number of other factors; • providing a presentation of the investment project for the head of the regional administration, deputy chief of staff, line agencies of the government area.
7.2. The investment phase of the implementation of investment projects
7.2.1. Scheme of the Lipetsk Region Administration work with investors in the investment phase of the implementation of investment projects Administrations of the Lipetsk region, municipal districts, urban districts along with investor make a decision on the location of the investment project. The decision is made based on the requirements of the investor to the investment site, availability of technical infrastructure that can meet the needs of investors in electricity,
natural gas, water, sanitation, as well as the presence of railway and roads. Land available for rent for investors. Municipal authorities must acknowledge the possibility of obtaining land for lease in accordance with applicable law. Obtaining a building permit is provided. The procedure for obtaining a building permit is defined by applicable legislation. Land lease agreement is sighed for the construction period.
Construction of buildings and commissioning of the object is set in accordance with applicable law. After the ownership title of real estate object is registering the investor has the right to buy out the land or
formalize the long term lease.
7.2.2. The procedure for obtaining government support for investment projects
Organization, implementing an investment project has the opportunity to apply for some form of state support in accordance with applicable law. Department of Investments and International Relations is the organizer of the selection of investment projects for state support in the form of exemption from property tax, reduce tax rate on profits, the provision of state guarantees of the Lipetsk region, as well as providing facilities for regional collateral fund to enforce the obligations of investment entities activities, implementing investment projects in the region, credit and financial lending institutions. List of documents required for a decision on granting state support to these forms, defined by the Law of Lipetsk region "On the support of investments in the Lipetsk region" dated by February 02,1997, N 59-oz. The package of documents necessary for a decision on granting state support in other forms shall be submitted to the appropriate branch executive authorities of Lipetsk region. Executive authorities of Lipetsk region except applications, prepare the certificate of compliance application with
current legislation, passes the set of documents to the commission for selection of investment projects for the provision of government support.
25The Commission considers the investor's application to receive support and takes a decision on such support within the set terms. Terms of providing subsidies from the regional budget for 2012 to legal entities (except for subsidies to state (municipal) institutions), individual entrepreneurs and individuals - producers of goods, works and services are set by the law of the Lipetsk region "On the regional budget for 2012 and for the planning period of 2013 and 2014" dated by December 08, 2011 № 579-OZ (App. 35).
8. Forms of state support of investment activity
8.1. Exempted from property tax:
- organization - the winners of investment projects competition in accordance with the Law of the Lipetsk region on February 25, 1997 № 59-OZ "On the support of investments in the Lipetsk region" - concerning to property subject to reconstruction, expansion or modernization of production, as well as created or acquired as a result of these investment projects in the Lipetsk region, provided the actual execution of at least 90 per cent per annum for each of the financial and economic performance of business-plan: the investment in the project, the proceeds from the sale of products (works, services ), taxable income, the number of jobs created, - the actual payback period of the project, but not more than eight years in agriculture, and five years in other sectors of the economy; - Residents of the federal special economic zone of industrial type in the Lipetsk region - concerning to the property booked on the balance of the organization, created or acquired in order to conduct activities in the territory of special economic zones, as well as used and located in the territory of special economic zones, for the period for seven years from the date of registration of the property; - participants of the special economic zones at the regional level - concerning to the property booked on the balance of the organization, created or acquired in order to conduct activities in the territory of special economic zones, as well as used and located in the territory of special economic zones, for a period of seven years from the date of recording of the property; - organizations carrying out the functions of management companies of special economic zones, as well as the
administration of special economic zones in the Lipetsk region - in respect of real property, booked on the balance of the organization that was created for the functioning of special economic zone, located within a special economic zone and adjacent territory and directly associated with it; - organizations investing in the infrastructure construction of special economic zones (water, wastewater, wastewater treatment plants), in accordance with the Law of the Lipetsk Region of August 18, 2006 № 316-OZ "On special economic zones at the regional level" - concerning to property accounted for balance of the organization that was created for the functioning of special economic zone, located within a special economic zone and the adjacent territory, a period of seven years from the date of registration of the property; - residents of industrial parks, recognized as such in accordance with the Law of the Lipetsk region on June 14, 2001 № 144-OZ "On industrial policy in the Lipetsk region", in relation to the property booked on the balance of the organization to be used and located at the industrial park, a period of five years from the date when the information resident in the register of industrial parks in the Lipetsk region;
- the organizations engaged in the agricultural production and recognized as such according to the clause 346.2 of the Tax Code of the Russian Federation, as well as the organizations performing the processing of agricultural products, primary treatment and storage of grain, engaged in the building of the cattle-breeding complexes (farms), sugar factories, capacities for primary treatment and storage of grain, objects of deep processing of the high-protein agricultural crops (soya, wheat, rye, corn, rape, nut and sorghum), on the specified objects of capital investments concerning the property used for production, processing and storage of agricultural goods, - for the term of actual recoupment, but not longer than 8 years;
- the organizations engaged in the agricultural production and recognized as such according to the clause 346.2 of the Tax Code of the Russian Federation, as well as the organizations performing the processing of agricultural products, primary treatment and storage of grain, engaged in the reconstruction and (or) modernization of the cattle-breeding complexes (farms), sugar factories, capacities for primary treatment and storage of grain, objects of deep processing of the high-protein agricultural crops (soya, wheat, rye, corn, rape, nut and sorghum), on the specified objects of capital investments concerning the property used for production, processing and storage of agricultural goods, - for the term of actual recoupment, but not longer than 8 years;
- organizations that implement innovative projects in accordance with the Law of the Lipetsk region from October 27, 2010 № 425-OZ "On innovation activity in the Lipetsk region", concerning the property considered on the balance sheet of the organization used for the realization of an innovative project included to the regional register of innovation projects for the period of five years from the date of the realization to the innovation project.
For managing companies of Industrial Parks additionally determined rate of 1.1%, concerning to the property booked on the balance of management companies used to operate an industrial park, located at the industrial park, for a period of 5 years from the date of entry of data on management companies to register industrial parks in the Lipetsk region.
8.2. Tax rate on profits is reduced by 4.5 percentage points for:
- organization - the winners of investment projects contest in accordance with the Law of the Lipetsk region on February 25, 1997 № 59-OZ "On the support of investments in the Lipetsk region" concerning to profits earned from the investment project in the Lipetsk region, in condition of separate accounting of revenues and expenses incurred in the implementation of the project, and revenues and expenses from other activities, and actual performance is not less than 90 per cent per annum for each of the financial and economic performance of business-plan: the investment in the project proceeds from the sale of products (works, services), taxable income, the number of jobs created, - the actual payback period of the project, but not more than five years;
- residents of the federal special economic zone of industrial type in the Lipetsk region concerning to profits earned from activities in the special economic zone, provided that separate accounting income (expenses)
26received (incurred) from activities in the special economic zone, and income (expenses) received (incurred) in carrying out activities outside the special economic zone for a period of five years from the date of making a profit, but in case of issuance of export and (or) import substituting production, if the total income from sales of goods (services), the share of income from the sale of these products is not less than 50 percent, for a period of seven years from the date of making a profit;
- participants of special economic zones at the regional level in accordance with the Law of the Lipetsk Region of August 18, 2006 № 316-OZ "On special economic zones at the regional level" concerning to profits earned from activities in the territories of special economic zones at the regional level, provided for separate of income (expenses) received (incurred) from activities in the territories of special economic zones at the regional level, and income (expenses) received (incurred) in activities outside the territory of special economic zones at the regional level, for a period of five years from the date of profit, and in case of issuance of export and (or) import substituting production, if the total income from sales of goods (works, services), the share of income from the sale of these products is not less than 50 percent, for a period of seven years from the date of making a profit;
- organizations that are making investments in infrastructure construction of special economic zones (water, wastewater, wastewater treatment plants), in accordance with the Law of the Lipetsk Region of August 18, 2006 № 316-OZ "On special economic zones at the regional level" concerning to profits earned from activities
carried out in areas of special economic zones at the regional level, provided that separate accounting income (expenses) received (incurred) from activities in the territories of special economic zones at the regional level, and income (expenses) received (incurred) in carrying out activities for outside the territory of special economic zones at the regional level, for a period of five years from the date of production on these accounting infrastructure as the fixed assets;
- organizations that implement innovative projects included in the register of regional innovation projects, in accordance with the Law of the Lipetsk region from October 27, 2010 № 425-OZ "On innovation activity in the Lipetsk region", concerning to profits earned from an innovative project in the Lipetsk region subject of separate accounting of revenues and expenses, arising in the implementation of innovative projects, and revenues and expenses from other activities - on the actual period of implementation of the innovation project, but not more than five years;
- Residents of industrial parks in accordance with the Law of the Lipetsk region from June 14, 2001 № 144-OZ "On industrial policy in the Lipetsk region" concerning to profits earned from activities at the industrial park, subject to separate accounting income (expense), received (incurred) on the activities at the industrial park, and income (expenses) received (incurred) in activities outside the industrial park, for a period of five years from the profit;
- management companies of industrial parks according to the Law of the Lipetsk region on June 14, 2001 № 144-OZ "On industrial policy in the Lipetsk region" concerning to profits earned from activities at the industrial park, subject to separate accounting income (expense) received (incurred) on the activities at the industrial park, and income (expenses) received (incurred) in activities outside the industrial park, for a period of five years from the date of making a profit.
8.3. Organizations, which are exempted from vehicle tax duties – the residents of special economic zones and organizations - participants of the special economic zones at the regional level concerning vehicles accounted for on the balance of the organization - special economic zone resident and organizations - participants of special economic zones at the regional level, within ten years from the time of vehicle registration. 8.4. On a competitive basis, the state guarantees of the Lipetsk region for investment projects for companies and organizations in attracting credit resources for investment in the form of capital investments are provided, as well as the opportunity to use the regional collateral fund is provided to guarantee the performance of the subjects of investment activities, implementing investment projects in the region, on loans set by financial and credit institutions. 8.5. The provision of grants from the regional budget of the Lipetsk region is carried out under the conditions specified by the law of the Lipetsk region on the regional budget, in accordance with the regional target programs in which state support of investment and innovation activity is provided and in accordance with the approved orders:
«The development of industry of the Lipetsk region for 2009-2012»: - Providing subsidies to compensate the part of the cost of interest payments on credit agreements aimed at modernization, purchasing of equipment, installation, construction and commissioning. - Providing subsidies to compensate for part of the cost of the development, implementation and certification of quality management systems in accordance with international standards. - Providing subsidies to compensate for part of the cost of interest payments on credit agreements aimed at innovation activity. «Development of innovative activity in the Lipetsk region for 2011-2015.»: - Providing subsidies to enterprises and organizations of the region on compensation the part of the costs for realizing projects included in the regional register of innovative projects aimed at creating innovative, nanotechnology or energy-saving products and technologies. - Providing subsidies to enterprises and organizations of the region to compensation of expenses to pay interest on bank loans, aimed at the implementation of the projects included in the regional register of innovative projects, to implement innovative technologies that improve energy efficiency and resource-saving, creating waste-free, environmentally friendly industries. - Providing subsidies to enterprises and organizations of the region on compensation of the part of the costs on the projects included in the regional register of innovative projects, works and services for conducting research and development activities, energy-survey, development and design of new types of innovative products.
27- Providing subsidies to enterprises and organizations of the region to compensate the cost of training specialists in innovative development programs, rising energy efficiency and resource conservation, environmental industries. - Providing subsidies to enterprises and organizations of the region on compensation the costs of registration of patents, licenses, trademarks and other intellectual property rights. - Providing subsidies to enterprises and organizations of the region on compensation the costs associated with participation in exhibitions and competitions in innovation, held in the Russian regions and abroad. «Development of small and medium-sized businesses in the Lipetsk region for 2009-2012»: - The provision of subsidies to small and medium-sized businesses to compensate the cost of making the first payment under a contract of financial lease (leasing) equipment, devices, machinery, motor vehicles (except for cars), instruments, apparatus, equipment, facilities, machinery, tools and technologies . - The provision of subsidies to small business beginners (individual entrepreneurs at the age of 30 years and legal entities which authorized capital share belonging to persons under the age of 30 years, inclusive, shall be not less than 50 percent) for reimbursement by the organization and development of businesses, implemented on priority areas for activities.
- The provision of subsidies to small businesses engaged in innovation activities, for compensation the part of costs on following: - payment agreements for research and development of new products, services and methods of production of transmission), new production processes; - acquisition of new technologies (including patent rights, licenses for the use of inventions, industrial designs, utility models); - acquisition software; - education and training of personnel associated with innovation; - rental of premises used for the activity (no more than 3 months); - purchase of machinery and equipment associated with technological innovation; - marketing research; - certification and patenting; - industrial design, graphic design and other (non-R & D) researches of new products, services and methods for their production (transfer), new production processes; - participation in exhibitions and fairs, "business missions of innovative companies" associated with the promotion of the regional and international markets, products, goods and services, designed to exhibit and demonstration (demo in action). - The provision of subsidies to small and medium-sized businesses, organizations, forming the infrastructure to support small and medium enterprises, to compensate for part of the costs associated with the implementation of energy-saving measures. - The provision of subsidies to small and medium-sized businesses to compensate for part of the cost of interest payments on loans received from credit institutions, and part of the lease payments on leasing operations aimed at the realization of investment projects in priority types of activities. Support is provided during the term of the loan (lease) agreement , but no more than two years. - The provision of subsidies to credit consumer cooperatives and agricultural credit consumer cooperatives for compensation of expenses on payment of interest on loans borrowed from Russian lending institutions, for issuance of loans to members of cooperatives who are the subjects of small and medium-sized businesses for conducting business. - The provision of subsidies to small and medium-sized businesses to recover the costs of the development, implementation and certification of quality management systems in accordance with international standards. - The provision of subsidies to small and medium-sized businesses, organizations, forming the infrastructure to support small and medium enterprises, to compensate the part of the costs associated with the implementation of energy-saving measures. «The development of agriculture and regulation of markets for agricultural products, raw materials and foodstuffs of the Lipetsk region in 2009-2012.»: - The provision of subsidies for reimbursement the purchase of breeding piglets. - The provision of subsidies for reimbursement the cost of pedigree breeding a livestock of pigs. - The provision of subsidies for reimbursement of the cost of production of pork. - The provision of subsidies for reimbursement of the cost for the implementation of bio-products. - The provision of subsidies for reimbursement of the cost of pedigree breeding a livestock of cattle. - The provision of subsidies for reimbursement of costs for the cows in private farms. - The provision of subsidies for reimbursement of the cost for technological connection of power dairy systems equipment to the electric networks. - The provision of subsidies for reimbursement for the purchase of feed and (or) of the ingredients for their
processing to the enterprises engaged in producing eggs for human consumption. - The provision of subsidies for reimbursement of the cost of production of chicken eggs edible. - The provision of subsidies for reimbursement of the cost of poultry production. - The provision of subsidies for reimbursement of the cost on repair work for the commissioning of unused pond area. - The provision of subsidies for reimbursement of costs of the fish-breeding material. - The provision of subsidies for reimbursement of costs of the produced commodity products. - The provision of subsidies for reimbursement of expenses for purchase of chemicals, including fertilizers. - The provision of subsidies for reimbursement of irrigation and drainage activities. - The provision of subsidies for reimbursement of costs of agrichemical examination of agricultural land. - The provision of subsidies for reimbursement for a planting, and work to care for perennials. - The provision of subsidies for reimbursement for the purchase of elite seeds. - The provision of subsidies for reimbursement for the acquisition of chemical defense.
28- The provision of subsidies for reimbursement of the cost of interest credits from Russian banks, and loans received in agricultural credit consumer co-operatives to carry out seasonal work for up to 1 year. - The provision of subsidies for reimbursement of the cost of interest on investment loans from Russian banks, and loans received in agricultural credit consumer cooperatives. - The provision of subsidies for reimbursement of the cost of interest on loans obtained in Russian organizations, loans received in agricultural credit consumer cooperatives by agricultural consumer cooperatives. - The provision of subsidies for reimbursement of the interest on loans from Russian banks, and loans received in agricultural credit consumer cooperatives by farmers. - The provision of subsidies for reimbursement of the cost of interest on loans obtained in the Russian credit institutions and loans received in agricultural credit consumer cooperatives by citizens having private farms. - The provision of subsidies for reimbursement of the cost of interest on loans obtained in the Russian credit institutions and loans received in agricultural credit consumer cooperatives by citizens having private farms, for the development of tourism in rural areas, including the development of handicrafts, trade, rural, domestic and socio-cultural services for the rural population, harvesting and processing of wild fruits, berries, herbs and other dietary and non-timber resources. - The provision of subsidies for reimbursement of the cost of interest on loans obtained in the Russian credit
institutions and loans received in agricultural credit consumer cooperatives in agricultural consumer cooperatives for construction and reconstruction of agricultural and agricultural cooperative markets, booths for agricultural products. 8.6. By the decisions of local authorities for SEZ RL participants the preferential rates for land tax and rents for the land are set.
9. Development of public-private partnership
In Lipetsk region with direct support of the administration a special coordinating body for the development of public-private partnership (PPP) in the region has been established to serve as a regional operator and Consulting Center - NP "Regional Center of PPP development of Lipetsk region." The objectives of the partnership is to conduct activities for the adoption of regional legislation on public-private partnership, as well as the pooling the resources between business and government for pilot infrastructure projects on PPP models in the field of energy-saving and HCS.
To organize the work on attracting investments into the economy of municipalities through Public-Private Partnership mechanisms a list of the municipal property: unfinished and unused industrial sites, housing and communal services, education, health and welfare projects, as well as free land has been prepared.
10. Creation of special economic zones and industrial parks
In order to enhance the potential of municipalities in the Lipetsk region, creating new high-tech
industries, growth in employment and quality of life in the Lipetsk region special economic zones and industrial parks are created.
The objectives of the establishment of special economic zones and industrial parks in the Lipetsk region are simplifying the initial stages of implementation of investment projects, elimination of administrative barriers, creating new jobs.
10.1. How to become a resident of a special economic zone "Lipetsk"
In accordance with federal law "On special economic zones" of 22 July 2005 N 116-FZ of the special
economic zone is determined by the Government of the Russian Federation, part of the Russian Federation territory, on which the particular mode of doing business is in effect.
An individual entrepreneur or business entity are recognized by residents of special economic zone from the date of making an appropriate entry in the register of residents of special economic zones.
The Resident of industrial production special economic zone is recognized business entity, except a unitary enterprise, incorporated under the laws of the Russian Federation on the territory of the municipality, within which is a special economic zone, and entered into with the authorities of special economic zones agreement on exercising industrial-production activity in the manner and conditions stipulated by the Federal law "on special economic zones" dated by July 22, 2005 N 116-FZ.
A person, intending to obtain the status of special economic zone resident shall submit to the authority of
special economic zones - the Department of Special Economic Zones and Project Finance Economic Development of Russia - a request for an agreement on exercising industrial-production activity, which should contain:
information about the proposed activities of the applicant, the appropriate type of special economic zone; information about the area of land required for the proposed activities of the applicant; information about the expected amounts of capital investment, including capital expenditures during the
year from the date of the agreement on exercising industrial-production activity. Special economic zone resident is obligated to make capital investments in rubles, the equivalent of at least three million euros (excluding intangible assets) at the rate of Central Bank of Russian Federation on the day of submission of an agreement on exercising industrial-production activity.
29The applicant shall attach to the application for an agreement on conducting industrial-production
activity: a copy of the incorporation certificate; a copy of the tax registration certificate; a copy of constituent documents; a business plan in the form approved by Order No. 75 issued by the Russian Ministry of Economic
Development on March 23, 2006; an unqualified opinion on the business plan expressed by the bank or credit institution in accordance with
the criteria set out in Order No. 158 issued by the Russian Ministry of Economic Development on April 29, 2010. Within ten business days after the receipt of the above mentioned documents, the Department for
Special Economic Zones and Project Financing with the Russian Ministry of Economic Development takes one of the following decisions and informs the applicant thereof:
to submit the application and business plan to the production type SEZ expert council; to refuse the application. Powers of legal regulation, the establishing and managing of special economic zones on the territory of
Russian Federation is provided by the Department of Special Economic Zones and Project Finance of Ministry of
Economic Development of the Russian Federation. JSC "Special economic zone of industrial-productive type" Lipetsk" is the management company, which is
a subsidiary of a JSC "Special Economic Zones". The main objectives of the Company are: • ensuring the implementation of the Agreement dated January 18, 2006. "On creation a special
economic zone of industrial type ' on the territory Griazinsky district of Lipetsk region"; • creation of infrastructure objects and other facilities designed to ensure the functioning the special
economic zone of industrial type, located in the Griazinsky district of Lipetsk region; • management of special economic zone's facilities and their maintenance.
10.2. How to Become a Participant of a Regional SEZ
Lipetsk Regional Law No. 316-OZ "On Regional Special Economic Zones" dated August 18, 2006 (as amended on October 27, 2010) defines the regional special economic zone as:
a territory with fixed borders (except for tourist, innovative and agricultural zones) offering a favorable environment for businesses.
An entity intending to become a resident of any regional SEZ files an application with the
authorized governing body which includes:
1) description of intended business operations in compliance with the SEZ type; 2) land area required for intended operations of the applicant; 3) estimated capital investments, including investments to be made within a year after the date of
agreement. Together with the application, the applicant submits the following documents: 1) a copy of the incorporation certificate; 2) a copy of the tax registration certificate; 3) a copy of constituent documents; 4) an investment project (business plan) approved by the applicant; this document must comply with the
requirements set out in Appendix 1 to Order No. 75 "On Approval of Business Plan Forms Submitted to Conclude Production (Innovation) Agreements; Selection Criteria for Banks and Other Credit Institutions to Express their Opinion on Business Plans, Business Plan Assessment Criteria to Be Applied by Expert Panel on Innovative Special Economic Zones" issued by the Russian Ministry of Economic Development on March 23, 2006, and include a time-limit for filing project documents and engineering surveys to be audited by the federal authorities;
5) an unqualified opinion on the business plan expressed by the credit institution which will finance the project;
6) an extract from the state register of legal entities issued by the tax authorities; 7) documents confirming availability of proprietary funds (at least 20% of the investment project costs
broken down by project year).
Within thirty calendar days after receipt of the above mentioned documents, the respective SEZ
governing body makes a positive or negative decision to conclude an agreement with the applicant. Sectors of economy executive bodies of state authority, authorized to carry out the functions of
managing special economic zones at the regional level: Department of innovation, industrial policy and transport of the Lipetsk region; Department of agriculture of the Lipetsk region; Department of Physical Culture, Sport and Tourism of the Lipetsk region. Administration of SEZ RL: JSC "Special economic zones at the regional level".
10.3. The order of assignment the territory to an industrial park area of Lipetsk region.
Industrial Park of the Lipetsk region - specifically organized to accommodate the new production area located on land designated for industrial activities, provided by energy, engineering, infrastructure, industrial buildings and structures necessary for the implementation of industrial activity.
In order to assign the territory to the industrial park the owner (lessee) of the industrial park assets shall submit to the executive body of state power in the area of innovation, industrial policy and transport (hereinafter - the executive body) the application with the following documents:
301) project of the industrial park development; 2) copies of cadastral passports of land, certified by the owner (lessee) the assets of the industrial park; 3) list of owners (tenants) of the property, including land, located at the industrial park, as well as
information about the rights of third parties on the property; 4) copies of property lease agreements, including land, located at the industrial park; 5) information about the management company and the existing residents: - copies of the constituent documents; - copies of accounting forms N 1, N 2 with a mark of tax authority and statistical observation forms N P-1
or N PM marked by statistical body, certified by the management company and residents. Executive authority within 30 calendar days from the date of the registration statement and
accompanying documents verifies documents and prepares the certificate of compliance or non-compliance of documents to the requirements of the Order.
The Executive Authority within 5 calendar days from the date of preparation of the following conclusion sends to the Commission on economic development and modernization of the Lipetsk region (hereinafter - Commission) a certificate of compliance of documents with the requirements of the Order.
The Commission within 10 calendar days from the date of receipt of documents from the executive body
makes a decision about classifying or refusing in assigning the territory to the industrial park, which is registered by protocol of the Commission.
Within 20 calendar days from the date of the Commission's decision of classifing the territory of the industrial park, the executive body shall enter the particulars in the register of industrial parks in the Lipetsk region, the form and procedure of which shall be approved by executive order.
11. The list of regional target programs in which state support of investment activity.
1. The regional target program "Improving the investment climate in the Lipetsk region, 2012 - 2014 years"
2. The regional target program "Development of the Industry of Lipetsk region for 2009-2012 years" 3. The regional complex target program "Development of innovative activity in the Lipetsk region for
2011-2015 years" 4. The regional target program "Development of Small and Medium Enterprises in the Lipetsk region for
2009-2012 years" 5. The regional target program "Development of agriculture and regulation of markets for agricultural
products, raw materials and foodstuffs of the Lipetsk region in 2009-2012 years" 6. The regional target program "Development of beef cattle in the Lipetsk region in 2009 - 2012 years" 7. The regional target program "Development of dairy cattle and increasing milk production in the Lipetsk
region in 2011 - 2012 years" 8. The regional target program "Development of tourism in the Lipetsk region (2011 - 2018 years)»
12. The list of legal acts regulating investment activity in the Lipetsk region in 2012. 1. Law of the Lipetsk region "On supporting investments in the Lipetsk region" dated by February
25,1997, N 59-OZ 2. Law of the Lipetsk region "On the application of a reduced tax rate on profits, subject to the regional
budget" dated by May 29, 2008, N 151-OZ 3. Law of the Lipetsk region "On the property tax of Lipetsk region organizations " dated by November
27, 2003, N 80-OZ 4. Law of the Lipetsk region "On the transportation tax in the Lipetsk region" dated by November 25,
2002, N 20-OZ 5. Law of the Lipetsk region "On special economic zones of the regional level" dated by August 18, 2006,
N 316-OZ 6. Law of the Lipetsk region 'On mortgaging fund of the Lipetsk region " dated by September 29, 2004,
№ 127-OZ 7. Law of the Lipetsk region "On innovation activity in the Lipetsk region" dated by October 27, 2010, №
425-OZ 8. Law of the Lipetsk region "On the regional budget for 2012 and for the planning period 2013 and
2014" dated by December 08, 2011, № 579-OZ
