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Residents of the special economic zone – who are they and what advantages do they have?

Резиденты особой экономической зоны – кто это и какие у них преимущества?

Since the special economic zone was created in Russia in 2005, everything has changed a lot. Today there are many such territories in Russia and in other countries. Residents of the special economic zone enjoy the privileges of establishing and developing their business, which attracts investment. The article will introduce you to the main pros and cons of residency, help you get answers to frequently asked questions.

What is a special economic zone?

The growth and strengthening of the economy is a priority direction of any state. The more money is attracted to the country “from the outside”, the better for the state. The work of all SEZs is aimed at this. In such a territory, comfortable conditions for investment are formed, which attracts entrepreneurs from all industrial sectors.

The agreements created within the framework of the FEZ involve foreign investors, since taxes are lower here, and the infrastructure is created specifically for rapid and productive development. If we turn to terminology, then this is a territory with a specific legal status that provides reduced tax costs, conditions for science, research, and production.

Special or free zones

Special or free zones operate on the basis of Law No. 116-FZ adopted in 2005. The decision on the formation of a new FEZ can be made exclusively at the state level. Within the territories, participants are offered loans at preferential rates, lower taxes, and various subsidies. The parties to the agreement must register the company in the territory of the free zone in order to enjoy these benefits.

Requirements for SEZ residents

In addition to the conditions regarding registration, there are other requirements for participants, namely:

  • production of products must be established within a special zone;
  • it is not allowed to use other state preferential conditions, in addition to those provided in the FEZ;
  • financing is possible only within the designated territory.

In addition, some zones, depending on their location and activities, may put forward local requirements to their partners.

Requirements for investment projects in the territory of special economic zones

Also, as in the case of residents, the activity of investment projects should be limited to the territory of the SEZ. In addition, it is prohibited:

  • conduct the development of natural deposits;
  • to provide services related to the extraction of minerals;
  • to produce tobacco products and other excisable goods;
  • to produce ethyl alcohol and alcoholic beverages.

It is also not allowed to invest in the format of capital investments.

Advantages and risks

Subsidies from the state for the FEZ of the Russian Federation

In addition to significant tax breaks and subsidies from the state, special zones have other advantages:

  • legal protection;
  • guarantee of rights;
  • inexpensive rental of office, warehouse and industrial space;
  • low price of land plots;
  • well-established infrastructure;
  • reduced duties.

Having become a resident of the SEZ, the company may not pay transport, property and land taxes. Income tax can either be absent altogether or be taxed at a rate of up to 15.5%, which in any case is lower than the standard 20%. Representatives of the IT business enjoy special preferences.

Against the background of all these advantages for residents of special economic zones, do not forget about the disadvantages. For example, membership in the FEZ will require the company to make financial investments in local infrastructure. Often the amounts are calculated in millions, and the terms of the contract prescribe the terms of investment. Despite the lack of guarantees in the success of investors, for the past 16 years, FEZs have shown exceptionally positive dynamics of development.

Relocation program

Relocation program

It is important that free zones are provided with a human resource. Since the territories have specific specifics and orientation, experienced staff is a scarce resource. A relocation program was created to attract the right number of employees. Due to it, companies get access to personnel from other regions or even states. The new employee is entitled to compensation:

  • transportation of personal property;
  • professional development;
  • purchase of equipment for yourself and your family;
  • payment of a visa for yourself and your family;
  • rental of living space.

To obtain approval, the candidate must submit a package of documents and an application to the administration of the selected zone. The application can be considered within a month and in case of a positive decision, the candidate receives a status confirmed through a certificate and data entry into the unified register of FEZ. Thus, the number of residents of special economic zones is growing throughout the country. The state actively supports the development of these territories by offering tax incentives so that they can implement their plans faster.

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