With a view to encourage entrepreneurship the Ministry for the Development of the Russian Far East and Arctic has drafted a resolution on providing subsidies to compensate for the cost of social insurance contributions paid by resident companies in the Russian Arctic. The reduction will bring it down to 7.6 percent.

Deputy Prime Minister and Presidential Plenipotentiary Envoy to the Far Eastern Federal District Yury Trutnev, who heads the State Commission for Arctic Development, has issued a relevant instruction.

"The mechanism consists in subsidizing the management company, i.e. the Far East Development Corporation in the Arctic area, which will subsequently reimburse resident companies' social insurance contributions. It means that the Corporation will pay for the investor the difference between the amount charged and the established 7.6-percent threshold," explained Deputy Minister Alexander Krutikov.

He also said that 7.6 percent is the sum of mandatory deductions for pension contributions equal to 6 percent, social insurance — 1.5 percent, and medical insurance — 0.1 percent. To this end the business persons should not only be registered as residents of the Arctic area, but also submit to the management company confirmation that they have paid their portion of the charged amounts.

The draft resolution is available via site.