This Act is to determine the legal and economic principles of in-
vestment activity carried out in the form of capital investment in the
Ivanovo Region, as well as to establish guaranties for equal protecti-
on of the rights, interests and property of subjects of such invest-
ment activity.
Chapter I. GENERAL PROVISIONS
Article 1. Basic Notions
The following basic notions are used for the purposes of this
Act:
- investments - cash, securities, other assets including property
rights, other rights evaluated in money and invested in items of ent-
repreneurial and/or other activity for the sake of acquiring profit
and/or achieving some other useful effect;
- investment activity - making investments and undertaking prac-
tical arrangements for the sake of acquiring profit and/or achieving
some other useful effect;
- capital investments - investments in fixed capital (fixed as-
sets) including spendings on new construction, on extension, recons-
truction, technological re-equipment of existing businesses, purchase
of machinery, equipment, tools and implements, construction survey,
and other spendings;
- investment project - substantiation of the economic feasibili-
ty, amount and term of capital investments, including necessary design
documents and cost estimates developed in accordance with the legisla-
tion of the Russian Federation and properly approved standards (norms
and regulations), as well as description of practical arrangements ai-
med at making investments (business plan).
Article 2. Relations Regulated under This Act
1. The effect of this Act shall embrace the relations connected
with investment activity in the form of capital investment.
2. State support regulated under this Act shall embrace invest-
ment activity in regard to facilities located in the Ivanovo Region
and owned by legal or natural persons officially registered in the
Ivanovo Region, regardless of industries they relate to.
Article 3. Capital Investment Items
1. Various property articles being newly created and/or moderni-
sed, owned by private persons, the State, municipalities, etc., shall
be regarded as capital investment items, with exceptions foreseen by
federal acts.
2. Capital investment in items the creation and employment of
which is not in conformity with the legislation of the Russian Federa-
tion and properly approved standards (norms and regulations) shall be
prohibited.
Article 4. Subjects of Investment Activity in the Form of Capital
Investment
1. Investors, customers, contractors, users of investment items,
and other persons shall be regarded as subjects of investment activity
in the form of capital investment (hereinbelow referred to as subjects
of investment activity).
2. Investors shall make capital investments in the Ivanovo Region
with the use of own and/or induced funds in accordance with the legis-
lation of the Russian Federation. The investors may appear as natural
persons, or legal persons founded on the basis of a joint cooperation
agreement, or legal persons associations which themselves are not re-
garded as legal persons, or municipal authorities, or foreign business
entities (hereinbelow referred to as foreign investors).
3. Customers - natural or legal persons authorised by investors
to implement investment projects. The customers shall not interfere in
business and/or other activities being conducted by other subjects of
investment activity, unless a different provision is made in a con-
tract between them. Investors may also be customers.
A customer being not an investor shall enjoy the rights of
possession, use and disposal of capital investments for a period and
within authority established in a contract or a State contract in ac-
cordance with the legislation of the Russian Federation.
4. Contractors - natural or legal persons that carry out works
following a contract or a State contract concluded with customers in
accordance with the Russian Federation Civil Code. The contractors
must have a license for the types of activity subject to licensing by
the federal law.
5. Users of capital investment items - natural or legal persons
including foreign ones, as well as State authorities, municipal autho-
rities, foreign States, international associations and organisations,
for which the above facilities are created. Investors may also be
users of capital investment items.
6. A subject of investment activity may perform the functions of
two or more subjects unless a different provision is made in a cont-
ract between them.
Article 5. Foreign Investors
The relations connected with investment activity in the form of
capital investment exercised by foreign investors in the Ivanovo Regi-
on shall be regulated by international treaties signed by the Russian
Federation, the Russian Federation Civil Code, other federal acts,
this Act, and other legislative instruments of the Russian Federation
and Ivanovo Region. Should there be different regulations provided for
in an international treaty participated by the Russian Federation,
then the regulation established by such an international treaty shall
be applied.
Chapter II. LEGAL AND ECONOMIC PRINCIPLES OF INVESTMENT ACTIVITY IN
THE FORM OF CAPITAL INVESTMENT
Article 6. Rights of Investors
Investors shall enjoy equal rights to:
- investment activity in the form of capital investment, with the
exceptions established by federal acts;
- independent decision on the amounts and fields of capital in-
vestments, as well as the conclusion of contracts with other partici-
pants in investment activity following the Russian Federation Civil
Code;
- possession, use and disposal of capital investment items and
the results of the capital investments made;
- transfer, by contract and/or State contract, of their rights to
making capital investments and to the results thereof to legal and na-
tural persons, State and municipal authorities in accordance with the
legislation of the Russian Federation;
- seeing to it that the funds allocated as capital investments
are employed to the target assigned;
- consolidation of the own and induced funds with the funds of
other investors for the purpose of joint capital investment on the ba-
sis of a contract and in accordance with the legislation of the Russi-
an Federation;
- other rights foreseen in a contract and/or a State contract in
accordance with the legislation of the Russian Federation.
Article 7. Duties of Investment Activity Subjects
Investment activity subjects must:
- exercise their investment activity in accordance with interna-
tional treaties partaken by the Russian Federation, federal acts and
other legislative instruments of the Russian Federation, acts and
other legislative instruments of the Ivanovo Region, as well as pro-
perly approved standards (norms and regulations);
- comply with requirements set by State authorities and officials
thereof to the extent that such do not contradict to legal provisions
of the Russian Federation;
- employ the funds allocated as capital investments to the target
assigned.
Article 8. Relations between Investment Activity Subjects
1. The relations between investment activity subjects shall be
regulated by a contract and/or State contract concluded between them
in accordance with the Russian Federation Civil Code.
2. The terms and conditions of contracts and/or State contracts
concluded between investment activity subjects shall retain effect
throughout the term of validity thereof, except for cases foreseen in
federal acts.
Article 9. Capital Investment Financing Sources
Capital investments shall be financed by the investors out of
their own or induced funds.
Chapter III. STATE REGULATION OF INVESTMENT ACTIVITY IN THE FORM OF
CAPITAL INVESTMENT
Article 10. Forms and Methods of State Regulation of Investment
Activity in the Form of Capital Investment
1. State regulation of investment activity in the form of capital
investment shall be exercised by the State authorities of the Ivanovo
Region.
2. State regulation of investment activity in the form of capital
investment may provide for the following:
2.1. The creation of favourable conditions for the development of
investment activity in the form of capital investment, as follows:
- establishing special taxation regimes being not of an individu-
al nature for investment activity subjects;
- protecting investors' interests;
- awarding special terms of the use of land and other natural re-
sources to investment activity subjects as it would not contradict to
the legislation of the Russian Federation;
- wider inducing personal savings and other nonbudgetary sources
to finance the construction of housing, social and cultural faciliti-
es;
- creating and developing a network of information and analysis
centres to regularly hold rating of investment activity subjects and
publish the related rating estimates;
- supporting antimonopoly measures;
- wider use of pledge in crediting;
- developing financial leasing;
- revaluation of fixed assets following inflation;
- encouraging capital investment subjects to build up investment
funds of their own.
2.2. Participation of the regional State authorities in invest-
ment activity in the form of capital investment, as follows:
- development, approval and financing of investment projects to
be implemented by the Ivanovo Region together with foreign States, as
well as financing projects financed from the regional budget;
- drawing up a list of construction and re-equipment items for
government use to finance those from the regional budget. The drawing
procedure shall be determined by the Head of the Regional Administra-
tion;
- on a competitive basis, granting State guaranties in regard to
investment projects at the expense of the regional budget (Regional
Development Budget). The guaranty procedure shall be determined by the
Head of the Regional Administration;
- on a competitive basis, allocation of funds of the regional
budget (Regional Development Budget) to finance investment projects.
The allocation of such funds shall be made on a fixed-date refundable
basis, either at an interest rate determined by the Regional Budget
Act for a respective year, or on the condition that a portion of sha-
res of the company being set up should pass to the State property and
be sold in a certain period of time on the securities market so that
the return is entered in the budget incomes. The competitive fund al-
location procedure shall be determined by the Head of the Regional Ad-
ministration;
- expert examination of investment projects in accordance with
the legislation of the Russian Federation;
- protection of bodies corporate from the supply of obsolescent,
material- and energy-consuming, non-intelligent technologies, equip-
ment, designs and materials;
- issue of funded loans, guarantied target-oriented loans;
- capital inducement to suspended or laid up State-owned con-
struction sites and facilities;
- upon tenders, granting concessions to Russian and foreign in-
vestors in accordance with the legislation of the Russian Federation.
3. State regulation of investment activity in the form of capital
investment may be exercised with the use of other forms and methods in
accordance with the legislation of the Russian Federation.
Article 11. Decision-Making Procedure for State Capital Invest-
ment
1. Decisions on making State capital investments shall be taken
by the State authorities of the Ivanovo Region.
2. State capital investments expenditure shall be foreseen in the
regional budget, provided such expenditure is part of spendings on the
realisation of respective regional target-oriented programmes, as well
as by proposals of the Head of the Regional Administration.
3. The development, consideration and confirmation of investment
projects financed from the regional budget shall be performed in ac-
cordance with the legislation of the Ivanovo Region in the order es-
tablished for regional target-oriented programmes. Lists of investment
projects financed from the regional budget shall compose a regional
target-oriented programme.
4. The procedure of financing investment projects from the regio-
nal budget shall be determined by the Head of the Regional Administra-
tion.
5. Orders for contracted construction works for government purpo-
ses at the expense of the regional budget and in the course of respec-
tive investment projects shall be distributed by State customers on a
competitive basis in accordance with the legislation of the Russian
Federation.
6. The Regional Legislative Assembly shall see to it that the re-
gional budget funds are utilised efficiently and to the target assig-
ned.
Article 12. Expert Examination of Investment Projects
1. All investment projects regardless of the financing sources
and ownership types of the investment items shall be subject to expert
examination prior to confirmation.
The expert examination of investment projects is intended to pre-
vent the creation of investment items the operation of which would
violate the rights of natural and legal persons and the Ivanovo Region
or would fail to meet the requirements of properly approved standards
(norms and regulations). Besides, it is intended to provide efficiency
assessment in regard to the capital investments being made.
2. Investment projects financed from the regional budget or those
of important economic significance regardless of the financing sources
and ownership types of the investment items shall be subject to expert
examination by duly authorised State institutions.
The examination procedure shall be determined by the Head of the
Regional Administration.
3. Investment projects shall be subject to ecological examination
in accordance with the legislation of the Russian Federation.
Chapter IV. STATE GUARANTIES OF THE RIGHTS OF INVESTMENT
ACTIVITY SUBJECTS AND PROTECTION OF CAPITAL INVESTMENT
Article 13. Guaranties of the Rights of Investment Activity Sub-
jects
1. In accordance with the federal and regional law, the State
authorities of the Ivanovo Region hereby grant the following guaranti-
es to all investment activity subjects regardless of ownership types:
- equal rights in exercising investment activity;
- transparency of project discussion;
- stability of rights. Should there be adopted any legislation
establishing regulations different from those in force at the conclu-
sion of contracts between any investment activity subjects, then the
terms and conditions of the contracts shall retain validity, except
for cases when such an act provides that its effect extend to relati-
ons arising from earlier contracts.
2. Insurance of investment activity in the form of capital
investment shall be provided in accordance with the legislation in
force.
Article 14. Responsibility of Investment Activity Subjects
1. In case of violation of legal requirements of the Russian Fe-
deration or the terms and conditions of a contract and/or a State
contract, the investment activity subjects shall bear responsibility
in accordance with the legislation of the Russian Federation.
2. Litigation involving investment activity in the form of capi-
tal investment shall be resolved in the order established by the le-
gislation of the Russian Federation and international treaties signed
by the Russian Federation.
Article 15. Termination or Suspension of Investment Activity in
the Form of Capital Investment
Termination or suspension of investment activity in the form of
capital investment shall be effected in the order established by the
legislation of the Russian Federation.
The procedure of the reimbursement to investment activity sub-
jects of losses resulting from the termination or suspension of in-
vestment activity in the form of capital investment shall be determi-
ned by legislation of the Russian Federation and contracts and/or Sta-
te contracts signed.
Chapter V. PRINCIPLES OF MUNICIPAL REGULATION OF INVESTMENT
ACTIVITY IN THE FORM OF CAPITAL INVESTMENT
Article 16. Forms and Methods of Municipal Regulation of Invest-
ment Activity in the Form of Capital Investment
1. Municipal regulation of investment activity in the form of ca-
pital investment may provide for the following:
1.1. The creation of favourable conditions for the development of
investment activity in the form of capital investment in the municipal
communities, as follows:
- granting local tax privileges to investment activity subjects;
- protecting investors' interests;
- awarding special terms of the use of municipally owned land and
other natural resources to investment activity subjects as it would
not contradict to the legislation of the Russian Federation.
1.2. Direct participation of municipal authorities in investment
activity in the form of capital investment, as follows:
- development, approval and financing of investment projects to
be implemented by the municipal communities;
- on a competitive basis, allocation of funds of the municipal
budgets to finance investment projects. The allocation of such funds
shall be made on a fixed-date refundable basis, either at an interest
rate determined by legislative instruments regarding the municipal
budgets, or on the condition that a respective portion of shares of
the company being set up should pass to the municipal property and be
sold in a certain period of time on the securities market so that the
return is entered in the incomes of local budgets. The competitive
fund allocation procedure shall be approved by the representative mu-
nicipal authority in accordance with the legislation of the Russian
Federation;
- expert examination of investment projects in accordance with
the legislation of the Russian Federation;
- issue of municipal loans in accordance with the legislation of
the Russian Federation;
- capital inducement to suspended or laid up municipally owned
construction sites and facilities.
2. On a competitive basis, municipal authorities may grant muni-
cipal guaranties in regard to investment projects at the expense of
the local budgets. The guaranty procedure shall be approved by the
representative municipal authority in accordance with the legislation
of the Russian Federation.
3. Municipal capital investment expenditure may be foreseen in
local budgets. Institutions authorised by municipal authorities shall
see to it that the municipal budget funds allocated as capital invest-
ment are utilised efficiently and to the target assigned.
4. Should municipal authorities take part in financing investment
projects being implemented by the Russian Federation and subjects the-
reof, the development and confirmation of such investment projects
shall be coordinated with the municipal authorities.
5. While carrying out investment projects, municipal authorities
may maintain coordination with the authorities of other municipal com-
munities, in particular, by consolidating their own and induced funds
on the grounds of a respective agreement and in accordance with the
legislation of the Russian Federation.
6. Municipal regulation of investment activity in the form of
capital investment may be exercised with the use of other forms and
methods in accordance with the legislation of the Russian Federation.
Article 17. Municipal Guaranties of the Rights of Investment
Activity Subjects
In accordance with the federal acts and other legislative instru-
ments of the Russian Federation, acts and other legislative instru-
ments of the Ivanovo Region, municipal authorities within the limits
of their powers may grant the following guaranties to all investment
activity subjects:
- equal rights in execising investment activity;
- transparency of project discussion;
- stability of rights.
Chapter VI. TAX PRIVILEGES RELATIVE TO INVESTMENT ACTIVITY
IN THE FORM OF CAPITAL INVESTMENT
Article 18. Entities Subject to Tax Privileges
Within the framework of investment projects included in the State
Register of Investment Projects of the Ivanovo Region, State support
of investment activity shall be granted in the form of tax privileges
to legal and natural persons, regardless of industries they relate to,
which own capital investment items and/or facilities created as a re-
sult of capital investment.
Article 19. State Register of Investment Projects of the Ivanovo
Region
1. The State Register of Investment Projects of the Ivanovo
Region (hereinbelow referred to as the State Register) is a list of
investment projects being implemented as capital investments and en-
titled to support in the form of tax privileges and other forms in ac-
cordance with this Act.
2. The State Register shall be kept by the Economics and Prognos-
tication Office of the Regional Administration.
3. An investment project shall be entered in the State Register
by resolution of the Head of the Regional Administration. The resolu-
tion must indicate in roubles or a hard currency the capital invest-
ment amount liable to reimbursement via tax privileges in accordance
with this Act.
An investment project entered in the State Register shall have an
individual registration number.
4. The resolution of the Head of the Regional Administration on
entering an investment project in the State Register shall be duly
published.
Article 20. General Conditions for Tax Privileges
1. Tax privileges hereby shall only be provided on the condition
that the recipient thereof keeps separate books on the operations
within investment projects.
2. Tax privileges shall only be granted after the investment has
been actually made in full or in part and confirmed with the privilege
recipient's accounting books.
3. At any moment, the amount of tax privileges cannot exceed the
actual investment amount.
Article 21. Investment Amount Accounted at Tax Privilege
Provision
The investment amount accounted at the provision of a tax privi-
lege shall be regarded as the capital amount actually invested by the
investors in the fixed capital and properly confirmed with necessary
documents and indicated in the accounting books of the privilege reci-
pient with regard for the requirements of this Act.
Article 22. Tax Privilege Validity Term
Tax privileges hereby shall be granted at the commencement of ac-
tual investment and remain in force till the actual capital investment
amount has been refunded via the tax privileges, but no longer than
the estimated recoupment term of the investment project as specified
in its feasibility report.
Once the total capital investment amount has been refunded via
the tax privileges granted, the validity of the latter shall expire.
Article 23. Tax Privileges
1. Tax privileges accountable in respective budgets may hereby by
provided in regard to the following taxes:
1.1. Taxes payable to the regional budget:
a) profit tax;
b) property tax.
1.2. Taxes payable to local budgets:
a) profit tax;
b) property tax;
v) housing maintenance tax;
g) land tax;
d) police tax;
e) advertisement tax.
The privileges regarding the taxes payable to local budgets shall
be granted by municipal authorities independently.
2. Should there be amendments to the tax law, connected with the
introduction of new taxes to substitute for or in addition to the
taxes mentioned herein, the tax privileges shall be valid in regard to
newly introduced taxes if it does not contradict to the tax legislati-
on.
3. In regard to the taxes mentioned in this Article, the privile-
ge recipients shall hereby pay ten (10) per cent of the existing tax
rates throughout the tax privilege validity term, with the tax privi-
lege amount being within the limit determined according to Articles
20, 21 and 22 hereof. This requirement must be met, if necessary, by a
respective rise in the payment rate.
Article 24. Tax Privilege Procedure
1. To obtain tax privileges hereby, the tax recipient must submit
the following documents to the tax authority at the place of registra-
tion:
- a tax privilege application;
- a copy of the resolution of the Head of the Regional Administ-
ration;
- a calculation of the privilege amount confirmed with relevant
accounting documents.
2. When required, the tax authority may verify the documents sub-
mitted as proof of the actual investment made in conformity with an
investment project. It also may apply other forms of control to check
the reasons for tax privileges.
3. The privilege recipient shall bear responsibility for the cor-
rect calculation of the amount of tax privilege provided hereby in ac-
cordance with the legislation in force.
Chapter VII. CONCLUSIVE PROVISIONS
Article 26. Entering into Force
1. This Act enters into force on the day of its official publica-
tion.
2. The provisions of this Act related by the federal law to the
competence of municipal authorities shall enter into force after res-
pective resolutions have been passed by municipal authorities.
3. The Head of the Regional Administration must have his legal
instruments brought into accordance with this Act within three (3)
months.
Until brought into accordance with this Act, the instruments men-
tioned shall be applicable in the provisions which do not contradict
hereto.
V.TIKHOMIROV
Head of the Administration
of the Ivanovo Region
At the City of Ivanovo
December 22, 1998
No. 85-OZ
|
