New Mechanism for Protecting Large Investments Launched in Russia

The government of the Russian Federation has signed decrees which allow practical application of the "Law on Protection and Encouragement of Investment in the Russian Federation" that had been adopted in April 2020.

Companies investing in strategically important areas of the economy now can conclude an agreement with the Ministry of Economic Development, which guarantees that tax conditions (on income tax, property tax, transport tax, land tax and VAT) will not impair for up to 20 years. In addition, if the amount of capital investments exceeds 10 billion rubles, the amount of non-tax payments (import duties, forest fees, etc.) can also be fixed for a period of up to 3 years. The terms of use of the agreement depends on the volume of investments, and for some industries there is a minimum investment limit.

The "pilot mode" of the project will operate until April 2021, with signing agreements on paper. Further, it is planned to launch a special platform "Investments", which shall become an investment navigator for businesses.

The law does not apply to the gambling industry, production of tobacco and alcoholic beverages, liquid fuel, oil and gas production, as well as projects with foreign jurisdiction.