Special Economic Zones in Russia (SEZ) are designated areas within the country that offer favorable conditions for investment and economic development. If you are interested in opening a company in Russia in these special economic zones, our team can help you navigate the complex legal and regulatory landscape and take advantage of the benefits offered by the SEZ.
| Quick Facts | |
|---|---|
| Purposes of Special Economic Zones (SEZ) in Russia |
– to attract foreign investors, – to foster entrepreneurship, – to sustain innovative and traditional businesses, etc. |
|
How many special economic zones are in Russia? |
There are 12 types of SEZ in Russia. However, in total there are around 45 special economic zones in various regions in Russia, each serving specific purposes. |
|
Ownership of SEZ |
In Russia’s complete ownership |
| Who can open a business in Russia’s SEZ? | International entrepreneurs, respecting specific business conditions imposed in SEZ. |
| Investments required |
Depending on the region and activities, however, the investment might start from USD 7,500 in certain industries and even reach USD 1.6 million in other sectors. |
| Conditions for foreign investors in SEZ |
Must have a residence permit in Russia |
| Most convenient business structure |
Limited liability company in Russia |
| Legal form of investments in Russia |
Corporate and contractual. A special purpose vehicle is a recommended business structure in this case. |
| Most appreciated regions |
– Saint Petersburg, – Madagan, – Kaliningrad, – Vladivostok, – Sevastopol, etc. |
| Legal regulations in Russia’s SEZ | Imposed by the Russian Ministry of Economic Development |
| Tax advantages in Saint Petersburg SEZ |
– no property tax for 10 years, – 2% income tax, – regional income tax ranging from 0% to 13.5% under certain conditions |
| Benefits of business owners in the Advanced Special Economic Zone (ASEZ) in Russia |
– 0% profit tax for 5 years after turning a profit, – 7.6% for social security contributions for 10 years, etc. |
| Administrative advantages in Russia’s SEZ |
– customs-free zone duties, – one-stop-shop policy, – affordable plot rentals, – the possibility of hiring foreign staff, – reduced inspection periods, and more |
| Assistance in opening a company in SEZ (YES/NO) |
YES |
| Working with our Russian representatives |
We assist international investors in setting up companies in Russia’s Special Economic Zones. Complete guidance and services are at the disposal of entrepreneurs at affordable prices. |
Table of Contents
Types of Special Economic Zones in Russia
There are several types of Special Economic Zones in Russia, including free port zones, free economic zones, and technological parks. Each type offers a different set of benefits and incentives, with the aim of attracting different types of investors and businesses. Some of the most significant areas are located in: Dubna, Murmansk, St. Petersburg, Khabarovsk and Alabuga. There are many opportunities and benefits in setting up a company in Russia in these types of areas.
Currently, there are 45 Special Economic Zones in Russia, which can be classified into four categories: 26 zones are focused on industry and production, 7 zones – on technology and innovation, 10 zones – on tourism and recreation, and the other 2 zones are port-focused.
The Alabuga Special Economic Zone in Russia specializes in attracting investment in the areas of automotive and mechanical engineering, chemicals, and materials science. The zone is also home to a number of research institutes and universities, making it an ideal location for businesses that are looking to collaborate with the scientific community.
Our company formation specialists in Russia can help you establish your business more efficiently and effectively. We can also help you if you need to open a company in a free zone in Dubai or in another region/ country, through our local partners.
It is important to know that in Russia, the formation of offshore companies is not allowed under the country’s laws. However, in these SEZs, the government has established some favorable tax systems. Companies operating within these zones are permitted to import and export goods without paying duties. The validity of these offshore arrangements is limited to 15-20 years.
How to open a company in the Special Economic Zones in Russia
The process of establishing a company in any Russian region involves first researching the area you’re interested in and understanding the benefits and incentives it offers to businesses operating there. You must also develop a detailed business plan that outlines your objectives, target market, competition, and financial projections. All this information must be submitted to the specific area authorities. Then, you need to obtain the necessary licenses and permits and register your business with the tax authorities, obtain a business license, and comply with other regulations. If you do not have a property in Russia for operating your business, you can lease or purchase one.
Starting a company in Advanced Special Economic Zones of Russia (ASEZ)
The Advanced Special Economic Zone (ASEZ) provides a special regime for business and taxes in Russia. Many tax incentives are available here, and residents can receive land plots from ASEZ’s management to develop their business projects. Administrative preferences are also available in ASEZ in Russia, while business owners enjoy complete infrastructure. Below are some of the tax incentives available in ASEZ:
- No income tax for 5 years from the date of first profit in the company. 12% profit tax applied for the following 5 years.
- There is no property tax for 5 years.
- There is no customs duty.
- Reduced tax rates apply for companies dealing with mineral extraction in ASEZ for 10 years.
- 7.6% is the unified social tax for pension/health insurance/social insurance fund within 10 years after obtaining the resident status.
If you would like to know more about the tax incentives in ASEZ in Russia, feel free to discuss them with our team. We are more than glad to help you with company incorporation in Russia and related procedures.
A special economic zone for IT and innovation companies
Innopolis Special Economic Zone has been great for the development of IT and innovation companies since 2012. This is known as the IT industry sector that already hosts more than 100 companies among which, about 50 startups. Located in Tatarstan, Innopolis SEZ has more than 3,800 employees and generates great profits each year. The same SEZ sustains the development of innovation-related activities, the creation of technical products, and distribution worldwide. It can be said that Innopolis is an excellent business destination for IT companies looking for a climate in full development and quality infrastructure.
Extra benefits provided to companies registered in ASEZ
ASEZ is one of the most valuable and appreciated business zones in Russia. Residents enjoy various incentives and supports. There is a one-stop-shop policy for international entrepreneurs, plus reduced inspection periods. On the other hand, residents of ASEZ who want to do business in this area can receive a land plot in this sense, which is quite a benefit. Being a customs-free zone duty, ASEZ is generous from this point of view. Business owners can also enjoy support in marketing campaigns for their companies established in ASEZ. Interested in starting a business in ASEZ, Russia? Feel free to discuss all the details with one of our Russian specialists in company formation.
The advantages of opening a business in Special Economic Zones in Russia
There are several advantages of setting up a business in a special economic zone in Russia. You can take advantage of the favorable tax system, including reduced corporate tax rates, tax holidays, and exemptions from certain taxes. As we mentioned before, businesses are exempt from paying import and export duties and quotas, making international trade easier and more profitable. Here are other interesting facts:
- The SEZ profit tax rate is only 2-5%, compared to the national rate of 20%, for up to 5 years, which helps businesses to reduce their tax burden and increase available cash for expansion and development.
- Some SEZs provide tax reductions on VAT (0% VAT in areas such as Dubna and Kaliningrad) and property and land use rights.
- Other SEZ in Russia offer lower utility rates for electricity and water, which lowers the operating costs of businesses.
- The Alabuga Special Economic Zone in Russia is among the most prosperous in Russia, offering lower profits taxes, 2% for the initial five-year period, 7% for years 6 to 10, and 15.5% until the year 2055, to name a few.
- Additionally, there are discounts on social insurance, up to 14%. Its strategic location allows businesses in the SEZ to access markets in Central and Southern Russia easily.
Besides assistance for opening a company in Russia’s special economic zones, we provide other services too. For instance, you can choose our accountants in Russia and make sure you get the optimal services. We can tell you more about payroll in Russia and its importance. Please contact our agents if interested in company formation in Russia and take advantage of the benefits offered by the special economic zones.