Law on benefits for businesspeople in the Arctic to see revision
© RIA Novosti. Evgeniy Samarin

Law on benefits for businesspeople in the Arctic to see revision

The Ministry for the Development of the Russian Far East and Arctic will prepare amendments to the law on benefits for investors in the Arctic, which are to improve its implementation.

"We have begun to monitor the enforcement of the law very closely and can see some aspects that create difficulties for the investors. We will respond promptly, including by making relevant amendments to the legislation," said Deputy Minister for the Development of the Russian Far East and Arctic Alexander Krutikov at the roundtable discussion arranged by the Project Office for the Development of the Arctic and the Delovaya Rossiya national public organization.

He gave the example of the provision that obliges investors to register in the municipality where they perform their core business activities.

"The provision is intended to increase local budgets. However, we can see that it creates difficulties for those who operate simultaneously in several municipalities. We are going to improve this provision. The relevant amendments are in the pipeline," added the deputy minister.

Krutikov also noted that Arctic incentives are in great demand among investors. According to him, about a hundred businesspersons with projects worth almost 200 billion rubles claim the status of a Russian Arctic resident.

He also said that in addition to monitoring the law's enforcement and adjusting certain provisions subject to their operation, the ministry will not be confined to basic incentives and will soon produce a new draft law, which would enable a number of single-industry cities in the Arctic to extend the life of existing enterprises and upgrade them.

Krutikov stated the importance of the earlier adoption of a document on subsidizing insurance payments that made it possible to reduce the rate of such payments to 7.5 percent, and to 3.75 percent for small businesses.

"The law provides that we should also set up a mechanism of subsidizing interest rates on loans for Arctic projects. The mechanism involves subsidizing 6.75 percent of the annual interest. If, for instance, your bank rate is 12 percent, then you deduct 6.75 percent and get your final rate. We are going to apply this mechanism to small projects not associated with mineral production, roundwood harvesting or unprocessed fish exports. This mechanism will be adopted before the end of the year following on the laws' adoption," said the deputy minister.

He also said that another mechanism, that of infrastructural support, should become effective starting in 2021 under the new law. It has already been adopted, and the first seven projects have been selected. The investors will be able to get a subsidy and build the requisite infrastructure starting next year. Project selection will continue.