Forms ofstate support and protection of investment in the Kursk region

Legal and economic conditions of the investment activity in the Kursk region are regulated by the Constitution of the Russian Federation, legislation of the Russian Federation, the Law of the Kursk regionof 12.08.2004 № 37 "On investment activity in the Kursk region" and other laws and regulations of the Kursk region.

The Law of the Kursk region of 12.08.2004 № 37 "On investment activity in the Kursk region" includes the following forms of state support for investors: 

- creating the most-favoredregime;

- granting a corporate property tax exemption;

- establishing a reduced corporate income tax payable to the regional budget for separate categories of taxpayers;

- providing investment tax credits;

- granting the followingon a competitive basis: 

a) subsidies for partial reimbursement of the interest on loans in credit institutions;

b) state guarantees for investment projects at the expense of the regional budget in accordance with the list of the state guarantees to be provided, approved by the Law of the Kursk region on the regional budget for the  corresponding financial year;

c) favorable conditions for the use of the state property of the Kursk region;

d)pledge of property and property rights of the Kursk region toensure investors' obligations to credit institutions on loans for investment projects, including lease payments for equipment acquired in lease under the terms of subsequent purchase of equipment for the implementation of investment projects;

e)subsidies for partial reimbursement of the lease payments for equipment purchased in lease under the terms of subsequent purchase of the equipment for the investment project, or for partial reimbursement of the interest on loans in credit institutions on leasing payments for equipment purchased in lease under the terms of subsequent purchase of the equipment for the investment project;

f) providing funds of the Investment Fund of the Kursk regionon the terms, set by the Administration of the Kursk region. 

Creating the most-favored regime

The right of entry into the most-favored regimecan benefit investors registered in the Kursk region and implementing investment projects aimed on the creation and (or) development of industries related to the following sections,in compliance with the Russian National Classifier of Economic Activities OK 029-2001:

a) "A. Agriculture, hunting and forestry" in terms of code groupings of economic activity 01.2"Animal breeding";

b) «D. Processing industries", except the code groupings of economic activities 27.12 "Products of direct reduction of iron ore."

The volume of investment in fixed capitalon investment projects applying for entry into the most favorable conditions shall not be less than 100 million rubles (including VAT), and on investment projects involving the creation and (or) development of industries related, in compliance with the National Classification of Economic Activities OK 029-2001 to the code groupings of economic activities 15 "Manufacture of food products, including drinks" - not less than 50 million rubles (including VAT).

Investment projects can be attributed to the most favorable regime, under the conditions:

1)    the investment project should be commercially and budgetary effective;

2)    The average salary in the organization, implementing an investment project should not be lower than the average salary of the workers in that branch, if there is no such data – should not be lower than the average salary in the Kursk region;

3)    the organizations should not have tax arrears to the budgetary system of the Russian Federation when appealing to the Administration of the Kursk region

The mechanism of entering the most-favorable regimewas determined by the Resolution of the Governor of the Kursk regionof 29.02.2008 №102 "On measures to implement Article 101 ofthe Kursk region Law "On investment activity inthe Kursk region." 

The procedure for the applicationto enter the most-favored regime 

An investors, implementing an investment project that meets the requirements of Article 101 of the Law ofthe Kursk region "On investment activity inthe Kursk region", should appeal to the Committee for the economics and development of the Kursk region (Kursk, Red Square, 6, k. 309, department of investment policy) no later than six months from the date of statementof immovable property created in the course of implementation of the investment project on the balance and provides a set of documents, specified in the Decree of the Governor ofthe Kursk regionof 29.02.2008 №102 "On measures to implement Article 101 of the Law ofthe Kursk region "On Investment Activities in the Kursk region."

The procedure for review of the documents by the executive bodies of the region has been set by the mentioned resolution.

In case the Commission on the evaluation of investment projects, having examined the documents on entry the most-favored regime, presented by the investor makes the positive decision and concludes the investment agreement,

established by the Resolution of the Governor of the Kursk region of 29.02.2008 №102 "On measures to implement Article 101 of the Law of the Kursk region"On investment activity in the Kursk region".

The investment agreement is the basis for the use of the property tax privileges (according to the Law of the Kursk regionof 26.11.2003№57"On the corporate property tax"), or the interest rate  of the corporate profit tax decrease by 4.5 percentage points in the share payable to the regional budget (according to the Law of the Kursk regionof 14.12.2010 №112 "On reduced tax rate of the corporate profit tax payable to the regional budget, for certain categories of taxpayers"), or two types of taxes (in the cases stipulated by the legislation). No additional documents or actions to obtain the tax benefits are required.

Corporate property taxexemptionis valid within three tax periods, starting with the tax period when the newly established or acquired fixed assets are taken into the corporate account.

The reduced rate of the corporate income tax payable to the regional budget in the amount of 13.5 percent is setby the Law of the Kursk region 14.12.2010 №112"On reduced tax rate of the corporate profit tax, payable to the regional budget for individual categories of taxpayers" for the organizations established after January 1, 2011, and implementing investment projects on the starting of new enterprises in the processing sector within the most-favored regime.

The reduced rate of the corporate income tax is applied within three consecutive tax periods, starting with the reporting time of the tax period when, according to the tax accounting, the organization gains the tax base for the corporate profit tax, but not later than three years since a new production facility has been set into the corporate account,according to the applicable legislation. 

Granting the investment tax loan

The investment tax loanis granted to the organization due to the statements stipulated in the Article №67 of the Tax Code of the Russian Federation and the Article №11 of the Law of the Kursk regionof 12.08.2004 №37 "On Investment Activity in the Kursk region".                                                                            The procedure for making a decision on granting the investment tax loan to taxpayers was approved by the Resolution of the Administration of the Kursk region of 3.08.2011 №352-pa "On approval of the decision to grant the investment tax loan to taxpayers”. 

The procedure for the application to obtaininvestment tax loan 

Toobtain the investment tax loan, an investor should apply to the Committee on the economy and development of the Kursk region (Kursk, Red Square 6, k. 309, Department of the Investment Policy) with his application and a set of documents established by the Resolution of the Administration of the Kursk regionof3.08.2011 №352-pa"on approval of the decision to grant investment tax loan to taxpayers."

Before the appeal to the Commitee of Economy and Developmentof the Kursk region,an investor makes out the property pledge contract or surety agreement according to the requirements of the Articles №73 and №74 of the Tax Code of the Russian Federation.Certified copies of the documents should be presented within the set of documents.

The procedure of the consideration of the documents submitted by an investor is held by the executive bodies of the region and is established by thementioned resolution. After a positive decision on granting the investment tax loanis made, the Committee on Economy and Developmentofthe Kursk regionsigns up a contract with the investor on the investment tax loan with the scheduled repayment of the investment tax loan and interest payment. 

Granting subsidies from the regional budget to reimburse partially the cost of interest payments on loans from credit institutions for investment projects. Granting subsidies from the regional budget to reimburse partially the cost of interest payments on loans, taken to pay the lease, or to compensate lease payments. 

The subsidies are granted on a competitive basis. Selection of investors’ (lessees’) applying for subsidies is held by the Commission on the evaluation of investment projects that acts according to the Resolution of the Governor of the Kursk region of 11.08.2005№590 "The organizational and carrying out questions of the competitive selection of the most effective investment projects" within criteria for recognition of the best projects established by the Law ofthe Kursk region of 12.08.2004 №37 "On Investment Activity in the Kursk region".

The winners receive subsidies according to the procedure established by the Resolution of the Administration of the Kursk regionof 22.07.2011 №324-pa "On approval of the Procedure for granting subsidies from the regional budget to investors to partially reimburse the cost of interest payments on loans from credit institutions for investment projects,to investors-lessees to partially reimburse the cost of interest payments on loans, taken to pay the lease, or to compensate lease payments".

Subsidies are provided during the payback period of the project, but not longer than five years. 

The procedure for the application to the competitive selection of the most effective investment projects in order to obtain the subsidies 

In case the competitive selection of investment projects takes place, the investor applies to the Committee on Economy and Developmentof the Kursk region as the organizer of the competition (Kursk, the Red Square 6, k. 309, department of the investment policy), and submits the set of documents specified in the Resolution of the Governor of the Kursk regionof 11.08.2005 №590, "The organizational and carrying out questions of the competitive selection of the most effective investment projects".The announcement about the competitive selection of projects is published in the newspaper "Kurskaya Pravda", is posted on the website of the Administration of the Kursk region and on the investment portal of the Kursk region.

The procedure for the consideration,held by the executive bodies of the region, is established by the mentioned resolution. The treaty is concluded with the winner of the competition. 

Pledging property of the Kursk region to secure the obligations of investors on loans attracted for investment projects 

Providing property of the Kursk region is competitive and is regulated by the Law of the Kursk region of 12.08.2004 №37 "On Investment Activity in the Kursk region",the Law of the Kursk region№ 36 of 17.07.2008, "On mortgaging fund ofthe Kursk region", the Resolution of the Governor ofthe Kursk regionof 11.08.2005 №590"The organizational and carrying out questions of the competitive selection of the most effective investment projects", the Resolution of the Administration of the Kursk regionof 20.10.2008№324 "On Approval of the Procedure and the rules of  giving property of the Kursk region in pledge.". 

The procedure for the application to the competitive selection of the most effective investment projectsin order to obtain a state support in the form of pledging property of the Kursk regionto secure the obligations of investors on loans attracted for investment projects 

In case the competitive selection of investment projects takes place, the winner obtains state support in the form of pledging property of the Kursk regionto secure his obligations on loans attracted for investment projects. The investor applies to the Committee on Economy and Developmentofthe Kursk region as the organizer of the competition (Kursk, the Red Square 6, k. 309, department of the investment policy) and submits the set of documents specified in the Resolution of the Governor of the Kursk regionof 11.08.2005 №590"The organizational and carrying out questions of the competitive selection of the most effective investment projects".The announcement about the competitive selection of projects is published in the newspaper "Kurskaya Pravda", is posted on the website of the Administration of the Kursk region(adm.rkursk.ru) and on the investment portal of the Kursk region (kurskoblinvest.ru).

The procedure of the consideration,held by the executive bodies of the region, is established by the mentioned resolution. The selection is held by the Commission on evaluation of investment projects.

The treaty on obtaining a state support in the form of pledging of property of the Kursk region to secure the obligations of investors on loans attracted for investment projectsis concluded with the winner of the competition.

Property Management Committee of the Kursk region concludes a treaty with credit institutions on pledging of property of the Kursk region to secure the obligations of investors - the winners of the competitive selection of investment projects for the funds raised to implement investment projects. 

Granting state guarantees of the Kursk region 

Granting state guarantees of the Kursk regionto investorsis providedon a competitive basis according to the statements of the Law of the Kursk regionof 12.08.2004 №37, Article 14 "On Investment Activity inthe Kursk region" under the terms and conditions stipulated in the Article 115.2 of the Budget Code of the Russian Federation.

Competitive selection of projects is carried out according the Resolution of the Governor of the Kursk regionof 11.08.2005 №590"The organizational and carrying out questions of the competitive selection of the most effective investment projects" 

The procedure for the application to the competitive selection of the most effective investment projectsin order to obtain a state support in the form of state guarantees of the Kursk region                                                                                         

In case the competitive selection of investment projects takes place, the winner obtains state support in the form of state guarantees ofthe Kursk regionto secure his obligations on loans attracted for investment projects. The investor applies to the Committee on Economy and Developmentof the Kursk region as the organizer of the competition (Kursk, the Red Square 6, k. 309, department of the investment policy), and submits the set of documents specified in the Resolution of the Governor of the Kursk region № 590 of 11.08.2005 "The organizational and carrying out questions of the competitive selection of the most effective investment projects".The announcement about the competitive selection of projects is published in the newspaper "Kurskaya Pravda", is posted on the website of the Administration of the Kursk region (adm.rkursk.ru) and on the investment portal of the Kursk region (kurskobkinvest.ru).

The procedure of the consideration,held by the executive bodies of the region, is established by mentioned resolution. The selection is held by the Commission on evaluation of the effectiveness of investment projects.

The treaty is concluded with the winner of the competition and the credit institution according to the Budgetary Code of the Russian Federation. 

Granting budgetary allocations through the Investment Fund of the Kursk region for co-financing of capital investments in public and (or) municipal property necessary for the production facilities of the investor 

Granting fund at the expense of the budgetary allocations through the Investment Fund of the Kursk region for co-financing of capital investment in public and (or) municipal property necessary for the production facilities of the investor is carried out on a competitive basis according tothe statements of the Law of the Kursk regionof 12.08.2004№37"On investment activity in the Kursk region", the Law of the Kursk regionof 29.10.2013 №101 "On Investment Fund ofThe Kursk region", the Resolution of the Administration ofthe Kursk region08.12.2014 799-pa "On the rules for formation and use of the Investment Fund of the Kursk region".

Competitive selection of the projects, giving to the winner the right to implement the investment project using the budgetary allocations of the Investment Fund of the Kursk region, is carried out according to the Resolution of the Administration of the Kursk region of 12.08.2014№799-pa "On the rules for formation and use of the Investment Fund of the Kursk region” and the Resolution of the Governor of the Kursk region № of 11.08.2005 №590, "The organizational and carrying out questions of the competitive selection of the most effective investment projects". 

The procedure for the application to the competitive selection of the most effective investment projects in order to obtain a state support in the form of granting budgetary allocations through the Investment Fund of the Kursk region for co-financing of capital investments in public and (or) municipal property necessary for the production facilities of the investor. 

In case the competitive selection of investment projects takes place, the winner obtains state support in the form of granting budgetary allocations through the Investment Fund of the Kursk region for co-financing of capital investments in public and (or) municipal property necessary for the production facilities of the investor. The investor applies to the Committee on Economy and Developmentofthe Kursk region as the organizer of the competition (Kursk, the Red Square 6, k.309, department of the investment policy), and submits the set of documents specified in the Resolution of the Administration of the Kursk region08.12.2014 №799-pa of "On the rules for formation and use of the Investment Fund of the Kursk region".The announcement about the competitive selection of projects is published in the newspaper "Kurskaya Pravda", is posted on the website of the Administration of the Kursk region (adm.rkursk.ru) and on the investment portal of the Kursk region (kurskoblinvest.ru).

The procedure of the consideration,held by the executive bodies of the region, is established by mentioned resolution. The selection is held by the Commission on evaluation of the effectiveness of investment projects.

As a result, of the competitive selection of the projectfor the cooperative implementation by the Administration of the Kursk region, a municipality where the investment project should be implemented(in the case of granting subsidies to create a municipal property, including concession agreements) and an investor, there should be a treaty concluded.

An investor implementing investment projects in the Kursk region may pretend to obtain only one form of state support, except the investors implementing investment projects aimed to reach the scores of the state program of the Kursk region"Development of agriculture and regulation of agricultural products market, raw materials and food in the Kursk region", investors implementing investment projects in the industrial parks, as well as investors, implement investment projects with total investment in fixed assets of more than 2 billion rubles for one project, who can be provided with all the forms of support provided by the legislation

An investor within one investment project is provided with one form of support,except the investors implementing investment projects in the framework of the state program of the Kursk region"Development of agriculture and regulation of agricultural products market, raw materials and food in the Kursk region", investors implementing investment projects in the industrial parks, as well as investors, implement investment projects with total investment in fixed assets of more than 2 billion rubles for one project. In these cases, investors may be provided with all the forms of support determined by the legislation.

The Protection of investmentis determined by the article 17 of the Law of the Kursk region"on investment activity in the Kursk region". State authorities of the Kursk region give the following guarantees to all the investors irrespective of the legal structure:

  • ensuring equal rights during the investment activity;
  • publicity in discussion of investment projects;
  • a right to appeal to the court against the decision and actions of state authorities of the Kursk region, bodies of local government and their officials;
  • protection of capital investment;
  • equal participation in public auctions and competitions held by the public authorities of the Kursk region and local authorities on the related territories of the Kursk region.

Newly introduced laws and(or) normative legal acts of the state authorities ofthe Kursk region deteriorating financial and economic conditions of the investment activity inthe Kursk region comparing with the financial and economic conditions of the investment activity guaranteed by the laws and normative acts of the Kursk region acting on the day when the financing of the project has began, including the total amount of money to be paid to the regional budget in the form of taxes and fees, establishing new responsibilities, rules and regulations do not apply to investors during the period when the state support for the investment project is provided. 

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