This Act is directed to the development of investment activity in
the region and to the creation of the most favourable treatment of
participants in investment activity regardless of their corporate and
legal status.
Chapter I. GENERAL PROVISIONS
Article 1. Subject
This Act is to establish the forms of State support of investment
activity, the procedure of its rendering by the State authorities of
the Ivanovo Region. It is directed to the maintenance and development
of investment activity as well as to the protection of rights, inte-
rests and assets of participants in investment activity regardless of
ownership types.
The State support regulated by this Act embraces investment acti-
vity in relation to facilities and units located in the Ivanovo Regi-
on.
Article 2. Basic Notions and Terms
State Investment Programme of the Ivanovo Region - a body of tar-
get-oriented programmes and projects which have been laid down for
full or partial financing within a respective certain period of time
from the regional budget or which assume other kinds of State support.
Investors - subjects of investment activity, regardless of their
corporate and legal status and ownership type, which invest own, bor-
rowed or induced funds in the form of investments and secure the tar-
get-oriented use thereof.
Investments - cash, target-oriented bank deposits, shares and se-
curities, technology, know-how, machinery, equipment, licenses inclu-
ding trade-mark licenses, credits, any other kinds of property or pro-
perty rights, intellectual values, invested in the objects of entrep-
reneurial or other activities for the sake of acquiring profit/income
or achieving a positive social effect.
Investment activity - making investments (investing) and all
practical arrangements aimed at investment realisation.
Investment project - a body of plans and arrangements for the re-
alisation thereof to achieve a commercial, economic or social effect.
Target-oriented programme (Development programme) - a complex of
projects and separate arrangements joint in a system of socioeconomic
targets, coordinated in terms of resources, responsibility and time,
and providing efficient solutions in the field of the civil, economic,
ecological, social and cultural development of the Ivanovo Region.
Article 3. Forms of State Support of Investment Activity in the
Ivanovo Region
State support of investment activity in the Ivanovo Region shall
be rendered in the following forms:
- investment financed from the State sources in the order estab-
lished by law;
- granting tax privileges to participants in investment activity;
- participation of the State authorities of the Ivanovo Region in
the development, expert examination and realisation of target-oriented
programmes and separate investment projects;
- granting State guarantees to participants in investment activi-
ty at the expense of the regional budget;
- protection of investors' interests;
- extensions and installments on taxes and fees, and tax credits
within the amounts payable to the regional budget, granted to partici-
pants in investment activity;
- investment-aimed tax credits within the amounts payable to the
regional budget, granted to participants in investment activity on the
grounds and conditions established by the Russian Federation Tax Code
and the Ivanovo regional law. (As amended by Regional Act No. 33-OZ of
13.06.2000.)
The above-mentioned forms of State support shall be rendered for
the implementation of target-oriented programmes and separate invest-
ment projects included in the State Investment Programme of the Ivano-
vo Region. Specific forms of State support for every target-oriented
programme and investment project shall be determined by the Regional
Administration.
Chapter II. FORMATION OF THE STATE INVESTMENT PROGRAMME OF THE IVANOVO
REGION AND COORDINATION OF ITS EXECUTION
Article 4. Pattern of the State Investment Programme
The State Investment Programme of the Ivanovo Region consists of
the Social Part and the Commercial Part.
The Social Part consists of nonprofit target-oriented programmes
and separate investment projects aimed at achieving a positive social
effect.
The Commercial Part consists of profitable target-oriented pro-
grammes and separate investment projects.
The Social Part shall be financed from the regional budget, in
particular, out of the funds acquired by realisation of regional secu-
rities and other kinds of borrowings, as well as out of state nonbud-
getary funds, charitable gifts and other sources.
The Commercial Part shall be financed primarily by the investors,
with State support as established in this Act.
Article 5. Procedure of the Formation of the State Investment
Programme
The State Investment Programme of the Ivanovo Region shall be
formed on a competitive basis in accordance with the guidelines of the
region's socioeconomic policy.
Target-oriented programmes and separate investment projects shall
be included therein by resolutions of the Head of the Regional Admi-
nistration.
Expert examination of a target-oriented programme or a separate
investment project as per Article 8 of this Act and conclusion of an
agreement between the investor and the Head of the Regional Administ-
ration shall be compulsory requirements for including the investment
projects in the State Investment Programme of the Ivanovo Region.
The State Investment Programme of the Ivanovo Region shall be
formed and approved by the Head of the Regional Administration no la-
ter than a month before the expiry of a current fiscal year.
For a given fiscal year, the State Investment Programme of the
Ivanovo Region in the part executed at the expense of the regional
budget shall be financed by decision of the Legislative Assembly of
the Ivanovo Region passed at approval of the regional budget for the
next fiscal year.
The State Investment Programme of the Ivanovo Region and amend-
ments thereto shall be published through mass media in the order es-
tablished by law.
The consideration procedure and selection criteria for tar-
get-oriented programmes and separate projects to be included in the
regional State Investment Programme for a respective certain period of
time shall be determined by the Head of the Regional Administration.
Article 6. Exclusion of Target-Oriented Programmes and Separate
Investment Projects from the State Investment Pro-
gramme of the Ivanovo Region and Suspension of State
Support
Target-oriented programmes and separate projects shall be exclu-
ded from the State Investment Programme by resolutions of the Head of
the Regional Administration only in case a target-oriented programme
or a project has been fulfilled.
The resolution on the exclusion of any target-oriented programmes
or separate investment projects from the Investment Programme Social
Part may enter into force at the beginning of a respective certain pe-
riod following the period the resolution was issued, if a term for the
exclusion of a target-oriented programme or a separate investment pro-
ject from the Investment Programme Social Part is not specified by the
Legislative Assembly of the Ivanovo Region.
State support of target-oriented programmes and separate projects
may be suspended (except for State guaranties) by resolutions of the
Head of the Regional Administration for reasons of:
- funds misuse;
- discrepancy in the results of the initial examination and a re-
peated one of an investment programme or project;
- cessation or suspension of investment activity of the executors
of target-oriented programmes or separate investment projects by duly
authorised State institutions in the order established by law;
- the investor's violation of his agreement with the Head of the
Regional Administration;
- reorganisation or dissolution of the investor.
The resolution of the Head of the Regional Administration on the
suspension of State support shall specify the suspension term and the
conditions on which such support may be resumed.
Article 7. Development of Target-Oriented Programmes and Invest-
ment Projects
The target-oriented programmes and investment projects shall be
developed by competent businesses/organisations, including structural
units of the Regional Administration, with or without participation of
specialised organisations and experts.
Correspondence of the target-oriented programmes and separate
investment projects to the requirements set forth herein and to the
criteria established by the Head of the Regional Administration shall
be assessed by respective structural units of the Regional Administra-
tion.
Article 8. Expert Examination of Investment Projects
The expert examination of investment projects shall be accom-
plished by the Expert Council of the Ivanovo Region, a standing con-
sulting institution under the Regional Legislative Assembly and Head
of the Administration.
Article 9. Examination Quality Assessment by the Regional Admi-
nistration
The Administration of the Ivanovo Region has the right to assess
the quality of expert examinations.
In case discrepancy has been discovered in the result of the ini-
tial examination and a repeated one, the State support provided for in
this Act shall be suspended as per item 2 of Article 6 hereinabove.
Litigation involving matters regulated by this article shall be
resolved in court according to the legislation in force.
Article 10. Investment Activity Coordination by the Regional Ad-
ministration
Participants in this activity, enjoying State support, shall be
obliged to submit documents and information necessary for the coordi-
nation of investment activity to structural units of the Regional Ad-
ministration and/or legal persons authorised by the Regional Administ-
ration.
The list of such information and its submission procedure shall
be determined by the Head of the Regional Administration.
Chapter III. INVESTMENTS FROM STATE FINANCIAL SOURCES
Article 11. Financing the Investment Programme Social Part
Investment from State financial sources to implement investment
programmes and projects included in the Social Part of the State In-
vestment Programme of the Ivanovo Region shall be effected from the
regional budget as irretrievable financing of arrangements foreseen in
the said investment programmes and projects.
The concrete amount for the financing of investment programmes
comprised in the Social Part of the State Investment Programme of the
Ivanovo Region must be indicated as a separate item in the regional
budget expenditures for a respective fiscal year in the order and on
the conditions which would not contradict to the Russian Federation
Budgetary Code. (As amended by Regional Act No. 33-OZ of 13.06.2000.)
Article 12. Financing the Investment Programme Commercial Part
Investment from State financial sources to implement investment
programmes and projects included in the Commercial Part of the State
Investment Programme of the Ivanovo Region shall be effected on a com-
petitive basis as follows:
- by granting loans in the order and on the conditions foreseen
by the legislation in force;
- by partaking in founding business partnerships and associations
in the cases and in the order foreseen by the federal and regional le-
gislation;
- by allocating the Ivanovo Region's Government order under the
procedure foreseen by the legislation in force.
In regard to arrangements foreseen in investment programmes and
projects comprised in the Commercial Part of the State Investment
Programme of the Ivanovo Region, irretrievable financing thereof from
the regional budget and nonbudgetary funds of the Ivanovo Region shall
be prohibited.
Article 13. Financing from Nonbudgetary Funds
Financing from nonbudgetary funds of the Ivanovo Region shall be
effected by the managing bodies of the funds in accordance with the
tasks assigned and the budgets approved.
Should there be included in the State Investment Programme of the
Ivanovo Region any target-oriented programmes or separate investment
projects corresponding to the scope of activity of the region's non-
budgetary funds, the Head of the Regional Administration shall apply
to the boards of respective nonbudgetary funds for consideration of
their participation in financing these programmes.
Chapter IV. TAX PRIVILEGES FOR INVESTORS
Article 14. Entities Subject to Tax Privileges
In regard to investment-inducing businesses, privileged taxation
may be applied thereto as provided for in this Act, within the amounts
payable to the regional budget. (As amended by Regional Act No. 33-OZ
of 13.06.2000.)
The tax privileges provided for herein shall be granted to econo-
mic entities for the costs recoupment term (or for some other term
foreseen in this Act) as determined in the investment project, but not
in excess of the term set forth in the agreement between the investor
and the Head of the Regional Administration.
Substantiation of the right to tax privileges shall be laid upon
the tax payer.
Creation of new jobs, increase in the tax base, and separate ac-
counting of the costs and results of investment projects shall be com-
pulsory conditions to obtain the tax privileges provided for in this
Act.
Economic entities located in the Ivanovo Region and making lea-
sing operations therein may be exempt from the property tax for each
leasing project as to the amounts payable to the regional budget. Any
privileges concerning profit taxation may only be applied to such en-
tities in the order and on the conditions established by the Russian
Federation Tax Code, Part One. (As amended by Regional Act No. 33-OZ
of 13.06.2000.)
Investors partaking in the implementation of investment pro-
jects/programmes included in the State investment Programme of the
Ivanovo Region shall be hereby entitled to tax privileges.
The investors entitled to tax privileges by this Act shall be
entered in the List of Regional Budget Profit Tax Full-Rate Payers.
The tax privileges granted in accordance with this Act shall be disco-
unted in the regional budget for a current fiscal year.
Article 15. General Conditions for Tax Privileges
Investors partaking in investment activity in the Ivanovo Region
shall be granted the tax privileges in accordance with the federal and
regional tax legislation in force.
Specifically, the tax privileges shall be granted to each inves-
tor by respective legislative instruments of the Regional Legislative
Assembly.
The provisions of this article do not extend to organisations be-
ing dissolved or reorganised.
Should the requirements provided for herein and/or the conditions
of project realisation have not been met, the privilege granted shall
be withdrawn, and the amount of payment in the form of financial reso-
urces, material property and products made out as mortgage shall be
payable to the regional budget for the whole term within which the
privilege was used, with the imposition of fines according to the le-
gislation in force for the budget tax delay.
Article 16. Profit Tax Privilege
Exempt from the profit tax in accordance with this Act within the
amounts payable to municipal budgets shall be granted by respective
municipal institutions.
The profit tax privileges provided for herein shall only be gran-
ted to economic entities in the order and on the conditions establis-
hed by the Russian Federation Tax Code, Part One. (As amended by Regi-
onal Act No. 33-OZ of 13.06.2000.)
Article 17. Property Tax Privilege
Investment-inducing business entities may be exempt from the tax
on the property involved in the execution of an investment project du-
ring the period of the realisation thereof, within the amounts payable
to the regional budget.
Article 18. Riding Tax Privilege
The tax privilege regarding the tax on automobile road users (he-
rein referred to as the riding tax) provides for the application of
the minimum tax rates established by the federal law during the first
two years after the realisation starts of the products/works/services
produced at the facilities built up/purchased within the framework of
an investment project or by the technologies introduced therewithin.
In regard to goods-producing investors, there may be applied the-
reto a tax base reduction equal to the price of the products manufac-
tured within the accountable period due to the investment induced.
Article 19. Tax Privilege Procedure for Investors Engaged in the
Realisation of Investment Projects / Target-Oriented
Programmes Included in the State Investment Programme
of the Ivanovo Region
To obtain a tax privilege in accordance with this Act, it shall
be sufficient to notify in writing the tax authorities at the place of
the business entity's registration, enclosing the following documents:
- a copy of the resolution of the Head of the Regional Administ-
ration on the confirmation of the list of projects included in the
State Investment Programme of the Ivanovo Region;
- a letter of commitment to keep separate books on the operations
within the project included in the State Investment Programme of the
Ivanovo Region.
Article 20. Tax Privileges for Banks and Credit Institutions
Granting Investment Credits for the Realisation of
Investment Projects / Target-Oriented Programmes In-
cluded in the State Investment Programme of the
Ivanovo Region
Tax privileges for banks and credit institutions which offer in-
vestment credits may provide for complete exempt from the tax on the
profit acquired as a result of granting investment credits for the re-
alisation of investment projects / target-oriented programmes included
in the State Investment Programme of the Ivanovo Region, within the
amounts payable to the regional budget, in the order and on the condi-
tions established by the Russian Federation Tax Code, Part One. (As
amended by Regional Act No. 33-OZ of 13.06.2000.)
The exempt from the profit tax in accordance with this Act within
the amounts payable to municipal budgets shall be administered by res-
pective municipal institutions.
Article 21. Tax Privilege Procedure for Banks and Credit Institu-
tions Granting Investment Credits for the Realisation
of Investment Projects / Target-Oriented Programmes
Included in the State Investment Programme of the
Ivanovo Region
To obtain a tax privilege in accordance with this Act, it shall
be sufficient to notify in writing the tax authorities at the place of
the bank's or credit institution's registration, enclosing the follo-
wing documents:
- the investment credit contract;
- a copy of the resolution of the Head of the Regional Administ-
ration on the confirmation of the list of projects included in the
State Investment Programme of the Ivanovo Region.
Article 22. Tax Privileges Amount
The total amount of the tax privileges granted shall not exceed
the amount of investments made in realisation of an investment pro-
ject.
Article 23. Responsibility for Privilege Utilisation
Tax-paying businesses and institutions must ensure funds accoun-
ting and writing off following the target orientation. In case any bu-
siness entities should utilise the induced funds otherwise, they shall
not enjoy the tax privileges foreseen in this Act.
Chapter V. STATE GUARANTIES OF INVESTMENT ACTIVITY
Article 24. Granting State Guaranties
In regard to projects comprised in the Commercial Part of the
Ivanovo Region Investment Programme, the Head of the Regional Admi-
nistration may come out as a guarantor within the limits established
by the Legislative Assembly.
While granting such guaranties, the Regional Administration may
require that the investments be insured.
Should there be adopted any regional legislative enactments to
restrict the amount of State support furnished in accordance with this
Act to investment activity, the relative restrictions shall not embra-
ce any investment projects included in the State Investment Programme
of the Ivanovo Region prior to the adoption of such enactments.
Article 25. Protection of Investments
In the Ivanovo Region, the protection of investments shall be gu-
aranteed regardless of investors' legal status, ownership forms and
nationality. The protection of investors and investments is secured by
the effective legislation of the Russian Federation and the Ivanovo
Region.
In the Ivanovo Region, the investments foreseen in this Act shall
not be subject to nationalisation nor violent requisition or confisca-
tion, except for the cases foreseen by the legislation of the Russian
Federation.
Corporate shares redeemed, exchanged by or transferred to foreign
investors shall be the property thereof not subject to withdrawal.
Should there be adopted in the Ivanovo Region any acts or other
legislative instruments to worsen an investor's situation, the effect
of such shall not embrace those investors who have invested before the
instruments mentioned come into force, and so until the full recoup-
ment of the costs foreseen by the investment project, but no longer
than the term established by agreement between the investor and the
Regional Administration.
Should any changes be introduced in the tax legislation of the
Russian Federation, the provisions of this Act shall be corrected ac-
cordingly.
The State authorities of the Ivanovo Region and officials thereof
shall have no right to impose limitations upon investors' right to se-
lect investment items.
Should there be issued by the State authorities of the Ivanovo
Region any legal instruments violating the rights and interests of in-
vestors and other participants in investment activity, any losses inf-
licted on them because of such legal instruments shall be reimbursed
by the above-mentioned authorities on the grounds of a court judge-
ment.
At dissolution of a business engaged in investment projects, the
privileges granted to and the losses inflicted upon the investors
shall be reimbursed by that business in accordance with the legislati-
on.
Chapter VI. CONCLUSIVE PROVISIONS
Article 26. Entering into Force
The tax privileges hereby introduced shall not be retroactive.
The State guaranties shall be granted and accounted as a separate
item in the regional budget expenditures for a respective fiscal year.
This Act enters into force on the day of its official publicati-
on.
The Ivanovo Region Investment Support Act No.8-OZ of 25.04.97
shall lose effect as of the day the present Act enters into force.
The Head of the Regional Administration must have the legal ins-
truments of the regional executive authorities in the field of invest-
ment activity brought into accordance with this Act within two months
since this Act has come into force. Until brought into accordance he-
rewith, the above-mentioned instruments shall be applicable in the
provisions which do not contradict to this Act.
V.TIKHOMIROV
Head of the Administration
of the Ivanovo Region
At the City of Ivanovo
November 6, 1998
No. 73-OZ
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