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State Duma approved new benefits to attract large investments

State Duma approved new benefits to attract large investments

Since 2015, Russia has a mechanism for concluding special investment contracts (SPIC) aimed at stimulating investment in industry. The SPIC model is to provide benefits to companies in exchange for upgrading or building production from scratch.

On May 28, 2019, the State Duma in the first reading approved the following amendments to the SPIC mechanism:

1) The areas for conclusion of special investment contracts will be expanded. In addition to industrial projects, benefits will be given to projects in agriculture, energy, etc. Only companies developing or creating innovations will be able to conclude a special investment contract.

2) The term of the contract will be extended:

- up to 15 years for projects with investments more than 50 billion rubles.

- up to 20 years - more than 50 billion rubles.

Earlier, SPIC operated for up to ten years.

3) The minimum investment requirement will be canceled. Now SPIC members are obliged to invest in the project at least 750 million rubles, now also tax and non-tax investments from the budget will not exceed 50% of the investor's investments in the SPIC. Previously, this restriction did not exist.

4) Income tax exemption will be valid for the entire duration of the project, and not until 2025, as of now.

5) The zero income tax rate will be applied to all revenues from the project under the SPIC.