RBC: The Ministry of Construction has prepared a draft law on the creation of a free economic zone in new regions

The Ministry of Construction of Russia has developed a draft law on the creation of a free economic zone (FEZ) in the Donetsk and Lugansk People’s Republics (DNR and LNR), Zaporozhye and Kherson regions. On March 20, the document was approved at a meeting of the government commission on legislative activities, writes RBC with a link to the source. The law is expected to come into force on January 1, 2024.

The SEZ on the territory of the DPR, LPR, Zaporozhye and Kherson regions will operate until the end of 2050. At the same time, RBC notes, the period of operation of the SEZ in the Crimea and Sevastopol is until the end of 2039. The Ministry of Construction expects that the adoption of the bill will contribute to “ensuring the sustainable socio-economic development of new entities.”

In order to become a member of the SEZ, it is necessary to be registered in the territory of new regions or have branches there. The volume of capital investments of a resident in the first three years must be equal to at least 3 million rubles. for small and medium-sized businesses, for other companies – at least 30 million rubles. However, if a FEZ participant implements an investment project in the field of computer technology and software development, research and development, the required amount of investment will be less, namely, at least 1 million rubles.

A special business regime in the SEZs in the new regions will include a special taxation procedure and the possibility of providing subsidies for reimbursement of interest rates on loans – up to 100% of the refinancing rate of the Bank of Russia. A free customs zone will also be established. Thus, foreign equipment imported into the territory of the FEZ for the implementation of the investment project will be exempted from paying import customs duties.

In addition, a separate draft law is planned to set a zero rate for tax on profits to the federal budget received from the implementation of the project for ten years from the tax period when the first profit was received for the participants of the SEZ. The income tax rate to the budget of the subject can be set from 0 to 13.5%. The rate may vary depending on the type of activity. It also provides for exemption from property tax for ten years for property on the balance sheet of a FEZ participant, as well as from land tax for three years.

October 5, 2022 Ministry of Economy announced adoption of a law on the creation of a single free economic zone on the territory of the DPR, LPR, Zaporozhye and Kherson regions. All four regions can exempt from paying income tax to the federal budget for ten years. From January 1 in four regions operate special tax regimes.

Milena Kostereva