Measures of state support

Forms of state support and protection of investments in the Kursk region

The legal and economic conditions of investment activity in the territory of the Kursk Region are regulated by the legislation of the Russian Federation, Kursk Region Law No. 37-ZKO of 12.08.2004 «On Investment Activities in the Kursk Region», other laws and regulatory legal acts of the Kursk Region.

Kursk Region Law No. 37-ZKO «On Investment Activities in the Kursk Region» dated 12.08.2004 provides for the following forms of state support for investors:

 

 

The right to enter the most-favored-nation regime can be used by investors registered in the territory of the Kursk Region and implementing investment projects that envisage the creation and (or) development of industries related to the All-Russian Classifier of Economic Activities OK 029-2014 to the following sections:

a) «A. Agriculture, forestry, hunting, fishing and fish-breeding«, as for codes  of economic activities 01.4″Livestock production»; 01.13.12 «Growing vegetables in protected soil»; 01.13.6 «Mushrooms and truffles  Growing»;

b) «C. Manufacturing industries«, except for the grouping code for economic activities 24.10.13 «Production of direct reduction products of iron ore and sponge iron».

The volume of investment in fixed assets for investment projects that aspire to enter the most-favored-nation regime should be at least 100 million rubles (including value-added tax), and for investment projects providing for the creation and (or) development of industries related to the All-Russian Classification of Economic Activities OK 029-2014 as for the code of groupings of economic activities 10 «Food Production» — not less than 50 million rubles (including value-added tax ). Investment projects can be classified as the most-favored-nation projects under the following conditions:

1) the investment project must have commercial and budgetary efficiency;

2) the average salary in the organization implementing the investment project should not be lower than the average statistical salary of workers in this industry, and in the absence of data on the industry — not lower than the average wage in the Kursk Region;

3) on the date of application to the Administration of the Kursk region,  organizations should  have paid taxes  to the budgetary system of the Russian Federation.

The mechanism for entering the most-favored-nation regime is determined by the resolution of the Governor of the Kursk region of February 29, 2008, No. 102 «On measures for the implementation of Article 101 of the Kursk Region Law» On Investment Activities in the Kursk Region. «

 

An investor who implements an investment project that meets the requirements of Article 101 of the Kursk Oblast Law «On Investment Activities in the Kursk Region» shall, not later than six months from the date of putting on the balance sheet of the immovable property created during the implementation of the investment project, apply to the Kursk Region Economy and Development Committee (Kursk, Krasnaya square, 6, room 309, Department of Investment Policy and Public-Private Partnership) and provides a package of documents determined by the decree of the Governor of Kursk Region asti from February 29, 2008 № 102 «On measures to implement Article 101 of the Kursk Region» On investment activity in the Kursk Region.

The procedure for reviewing documents by the executive authorities of the region is established by the said resolution. If the investment projects evaluation commission, which has reviewed the documents submitted by the investor, approves the positive decision on granting the most-favored-nation treatment, an investment agreement is concluded with the approximate form of which was established by the resolution of the Governor of the Kursk region of February 29, 2008, No. 102 «On measures for implementation of article 101 of the Kursk region Law «On investment activities in the Kursk Region.» The investment agreement is the basis for the application by the investor of the tax exemption on the property of organizations (in accordance with the Kursk Oblast Law of 26.11.2003 No. 57-ZKO «On the property tax of organizations»), or 4.5 percentage points lowered the interest rate of the tax on profit organizations in the part credited to the regional budget (in accordance with the Kursk Region Law of December 14, 2010 No. 112-ZKO «On the reduction of the tax rate of corporate profit tax to be credited to the regional budget, for certain categories of tax payers «), No additional documents or actions are required to obtain tax benefits. The privilege on the property tax for organizations is valid for three tax periods, starting from the tax period in which newly created or acquired fixed assets are put on the balance of the organization.

The lowered profit tax rate of organizations to be credited to the regional budget in the amount of 13.5 percent is established by the Kursk Region Law No. 112-ZKO of December 14, 2010 «On the Lowering of the Tax Rate of Corporate Profits Tax to be Transferred to the Regional Budget for Individuals categories of taxpayers «for organizations formed after 1 January 2011 and implementing investment projects in the most-favored-nation regime.

The lowered tax rate of corporate profit tax is applied for three tax periods in a row, starting from the reporting period of the tax period in which the organization’s taxable base for corporate income tax arises according to tax accounting data, but no later than three years from year of setting the property of a new production facility (in full) to the balance of the organization in accordance with the requirements of the current legislation.

 

An investor who implements an investment project that meets the requirements of Article 101 of the Kursk Oblast Law «On Investment Activities in the Kursk Region» shall, not later than six months from the date of putting on the balance sheet of the immovable property created during the implementation of the investment project, apply to the Kursk Region Economy and Development Committee (Kursk, Krasnaya square, 6, room 309, Department of Investment Policy and Public-Private Partnership) and provides a package of documents determined by the decree of the Governor of Kursk Region asti from February 29, 2008 № 102 «On measures to implement Article 101 of the Kursk Region» On investment activity in the Kursk Region.

The procedure for reviewing documents by the executive authorities of the region is established by the said resolution. If the investment projects evaluation commission, which has reviewed the documents submitted by the investor, approves the positive decision on granting the most-favored-nation treatment, an investment agreement is concluded with the approximate form of which was established by the resolution of the Governor of the Kursk region of February 29, 2008, No. 102 «On measures for implementation of article 101 of the Kursk region Law «On investment activities in the Kursk Region.» The investment agreement is the basis for the application by the investor of the tax exemption on the property of organizations (in accordance with the Kursk Oblast Law of 26.11.2003 No. 57-ZKO «On the property tax of organizations»), or 4.5 percentage points lowered the interest rate of the tax on profit organizations in the part credited to the regional budget (in accordance with the Kursk Region Law of December 14, 2010 No. 112-ZKO «On the reduction of the tax rate of corporate profit tax to be credited to the regional budget, for certain categories of tax payers «), No additional documents or actions are required to obtain tax benefits.

The privilege on the property tax for organizations is valid for three tax periods, starting from the tax period in which newly created or acquired fixed assets are put on the balance of the organization. The lowered profit tax rate of organizations to be credited to the regional budget in the amount of 13.5 percent is established by the Kursk Region Law No. 112-ZKO of December 14, 2010 «On the Lowering of the Tax Rate of Corporate Profits Tax to be Transferred to the Regional Budget for Individuals categories of taxpayers «for organizations formed after 1 January 2011 and implementing investment projects in the most-favored-nation regime.

The lowered tax rate of corporate profit tax is applied for three tax periods in a row, starting from the reporting period of the tax period in which the organization’s taxable base for corporate income tax arises according to tax accounting data, but no later than three years from year of setting the property of a new production facility (in full) to the balance of the organization in accordance with the requirements of the current legislation.

 

Granting subsidies on reimbursement of part of the cost of paying interest on loans engaged in credit organizations for the implementation of investment projects, lessor investors to recover part of the cost of paying interest on loans attracted to pay lease payments or to reimburse the lessee for part of the costs of paying lease payments is carried out on a competition basis.

Selection of investment projects of investors (investors-lessees) claiming subsidies is carried out by the commission for the evaluation of the effectiveness of investment projects, acting in accordance with the resolution of the Governor of the Kursk Region of 11.08.2005 № 590 «Issues of organizing and conducting competitive selection of the most effective investment projects «On the criteria for the recognition of investment projects by the winners of the competitions established by the Kursk Region Law of 12.08.2004 No. 37-ZKO «On Investment Activities STI in the Kursk Region». 

The winners of the competition receive subsidies in accordance with the procedure established by the resolution of the Kursk Region Administration on July 22, 2011 No. 324-p «On Approving the Procedure for Granting Subsidies from the Regional Budget to Investors to Reimburse Part of the Costs for Paying Interest on Loans Involving Credit Organizations to Implement Investment projects, investors-lessees to recover part of the costs of paying interest on loans attracted to pay lease payments or to reimburse the lessee  part of the cost of payment of leasing payments». Subsidies are provided for the project payback period, but not more than five years.

In the case of announcing a competitive selection of investment projects for which winners are given subsidies, the investor applies to the Kursk Region Economy and Development Committee as the organizer of the tender (Kursk, Red Square, 6, room 309, Investment Policy and Public-Private Partnership Division ), and presents a package of documents established by the resolution of the Governor of the Kursk region of 11.08.2005 No. 590 «Issues of organizing and conducting competitive selection of the most effective investment projects».

The announcement of a competitive selection of projects is published in the newspaper «Kurskaya Pravda», posted on the website of the Administration of the Kursk region and the investment portal of the Kursk Region. The procedure for considering the documents submitted to the competition by the executive authorities of the region is established by the said resolution. With the winner of the competition, an agreement on granting a subsidy is concluded.

Provision of property of the Kursk region is carried out on a competitive basis and is governed by the Kursk Region Law No. 37-ZKO «On Investment Activities in the Kursk Region» dated 12.08.2004, Kursk Region Law No. 36-ZKO of 17.07.2008 «On the Kursk Region Deposit Fund», by the resolution of the Governor of the Kursk Region of 11.08.2005 № 590 «Issues of organizing and conducting a competitive selection of the most effective investment projects», the resolution of the Administration of the Kursk Region of 20.10.2008, No. 324 «On approval of the Regulations on the procedure and rules provision of property of the Kursk Region in pledge». The order of the investor’s appeal for participation in the competitive selection of the most effective investment projects in order to obtain state support in the form of pledging property of the Kursk Region to secure the obligations of investors on loans used for the implementation of investment projects.

In the case of announcing a competitive selection of the most effective investment projects, state support in the form of securing the obligations of investors on attracted loans granting loans to mortgage organizations of the property of the Kursk Oblast Mortgage Fund, the investor applies to the Kursk Region Economy and Development Committee as the organizer of the tender (Kursk, Red Square, 6, room 309, Investment Policy and Public-Private Partnership Division); and presents a package of documents established by the resolution of the Governor of the Kursk Region of 11.08.2005 No. 590 «Issues of organizing and conducting a competitive selection of the most effective investment projects». The announcement of a competitive selection of projects is published in the newspaper «Kurskaya Pravda», posted on the website of the Administration of the Kursk region (adm.rkursk.ru) and the investment portal of the Kursk Region (kurskoblinvest.ru). The procedure for considering the documents submitted to the competition by the executive authorities of the region is established by the said resolution.

The selection is carried out by the commission to assess the effectiveness of investment projects. An agreement is concluded with the winner of the tender, on the provision of state support in the form of securing collateral property of the Kursk Region of its obligations to the credit institution for attracting credit resources for the implementation of the investment project. The Property Management Committee of the Kursk Region concludes agreements with credit institutions on the pledge of property of the Kursk Region to secure the obligations of investors — winners in the competitive selection of investment projects for credit resources involved in the implementation of investment projects.

Provision of state guarantees to the Kursk Region by investors is carried out on a competitive basis in accordance with Article 14 of the Law of the Kursk Region of 12.08.2004 No. 37-ZKO «On Investment Activities in the Kursk Region» in the manner and under the conditions provided for in Article 115.2 of the Budget Code of the Russian Federation. The competitive selection of projects, the winners of which are provided with the state guarantees of the Kursk Region, is carried out in accordance with the resolution of the Governor of the Kursk Region of 11.08.2005 № 590 «Issues of organization and conducting competitive selection of the most effective investment projects». The order of the investor’s appeal for participation in the competitive selection of the most effective investment projects in order to obtain state support in the form of state guarantees of the Kursk Region. In case of announcing a competitive selection of the most effective investment projects, the winners of which are provided with state support in the form of securing the obligations of investors on attracted loans by providing credit institutions state guarantees of the Kursk Region, the investor appeals to the organizer of the competition (Kursk, Krasnaya square, 6, room 309, department of investment policy and public-private partnership), and presents a package of documents established by the resolution of the Governor of the Kursk Region of 11.08.2005 on the economy and development of the Kursk Region as the organizer of the competition № 590 «Issues of organization and conducting competitive selection of the most effective investment projects». The announcement of a competitive selection of projects is published in the newspaper «Kurskaya Pravda», posted on the website of the Administration of the Kursk region (adm.rkursk.ru) and the investment portal of the Kursk region (kurskoblinvest.ru). The procedure for considering the documents submitted to the competition by the executive authorities of the region is established by the said resolution. The selection is carried out by the commission to assess the effectiveness of investment projects. Contracts are concluded with the winner of the competition and the credit organization, in accordance with the Budget Code of the Russian Federation.

Provision of funds at the expense of the budgetary appropriations of the Investment Fund of the Kursk region to co-finance capital investments in state and (or) municipal property necessary for the operation of the investor’s production facilities. Provision of funds from the budget appropriations of the Kursk Region Investment Fund to co-finance capital investments in state and (or ) of municipal property necessary for the functioning of the investor’s production facilities is carried out on a competitive basis in accordance with the provisions of the Law of the Kursk Region of 12.08.2004 No. 37-ZKO «On investment activity in the Kursk Region», Law of the Kursk Region of October 29, 2013 № 101-ZKO «On the Investment Fund of the Kursk Region», the resolution of the Administration of the Kursk Region of December 8, 2014 No. 799-pa «On Approving the Procedure for the Formation and Use of Budgetary Appropriations of the Investment Fund of the Kursk Region». The competitive selection of projects whose winners receive the right to implement an investment project using the funds of the Investment Fund of the Kursk Region is carried out in accordance with the resolution of the Administration of the Kursk Region dated 08.12.2014 No. 799 pa «On Approving the Procedure for the Formation and Use of Budgetary Appropriations of the Investment Fund of the Kursk Region «And the resolution of the Governor of the Kursk Region of 11.08.2005 № 590 «Issues of organizing and conducting competitive selection of the most effective investment projects».

The procedure of applying the investor to participate in the competitive selection of the most effective investment projects in order to obtain state support in the form of using funds at the expense of the Investment Fund of the Kursk Region to co-finance capital investments in state and (or) municipal property necessary for the operation of the investor’s production facilities. In case of announcements of competitive selection of the most effective investment projects, to whose winners State support is provided in the form of provision of funds from the Investment Fund of the Kursk Region to co-finance capital investments in state and (or) municipal property necessary for the operation of the investor’s production facilities, the investor applies to the Kursk Region Economic and Development Committee as the organizer competition (Kursk, Red Square, 6, room 309, Department of Investment Policy and Public-Private Partnership), and presents a package of docking established by the resolution of the Administration of the Kursk Region of December 8, 2014 No. 799-pa «On Approving the Procedure for Forming and Using the Budgetary Appropriations of the Investment Fund of the Kursk Region». The announcement of a competitive selection of projects is published in the newspaper «Kurskaya Pravda», posted on the website of the Administration of the Kursk region (adm.rkursk.ru) and the investment portal of the Kursk region (kurskoblinvest.ru). The procedure for considering the documents submitted to the competition by the executive authorities of the region is established by the said resolution.

The selection is carried out by the commission to assess the effectiveness of investment projects. Based on the results of the competitive selection for the joint implementation of the investment project between the Administration of the Kursk Region, the municipal entity on the territory of which the investment project will be implemented (in the case of granting a subsidy to the municipal entity for the creation of municipal property, including within the concession agreements). Investors implementing investment projects in the territory of the Kursk Region get only one form of state support for the same investment project, with the exception of investors implementing investment projects aimed at achieving the goals and objectives of the Kursk Region State Program «Agricultural Development and Regulation of Agricultural Markets products, raw materials and food in the Kursk Region», priority investment projects with the volume of investments in fixed assets more than 2 billion rubles, investment projects aimed to produce innovative products, as well as investment projects in the industrial parks.

Investments protection is provided for in Article 17 of the Kursk Region Law «On Investment Activities in the Kursk Region». The bodies of state power of the Kursk Region in accordance with the legislation of the Russian Federation and the Kursk Region guarantee to all subjects of investment activity regardless of the form of ownership:

  • ensuring equal rights in the implementation of investment activities;
  • publicity in the discussion of investment projects;
  • the right to appeal against decisions and actions (inaction) of the Kursk Region state authorities, local self-government bodies of the Kursk Region and their officials;
  • protection of capital investments;
  • equal participation in open auctions and competitions held by the Kursk Region State authorities and local self-government bodies in the relevant territories of the Kursk Region.

 

Newly enacted laws and (or) other regulatory legal acts of public authorities of the Kursk Region in part, worsening the financial and economic conditions for the implementation of investment activities in comparison with the financial and economic conditions for investment activity, acting in accordance with the laws and (or) other normative acts of the Kursk Region on the day of the beginning of financing of the investment project, including increasing the total amount of money to be paid in the regional budget in the form of taxes and fees, imposing new responsibilities, rules and regulations do not apply to investors during the period for which the state support is given to the investment project.