THE ARCTIC ZONE OF THE RUSSIAN FEDERATION

The Arctic Zone of the Russian Federation (AZRF) is a new form of state support which extends across the Russia’s Arctic Zone territory. Companies which have presented projects with over 1 million roubles of investment can obtain AZRF status and benefit from incentives and privileges.

For more information, please visit: arctic-russia.ru

The largest economic zone in Russia and the world, with a single set of privileges for investment activity.

Benefit from unique tax incentives. Receive the full support of the Far East Development Corporation for your project. Benefit from a range of simplified administrative procedures (including scheduled checks and the CFZ).

In accordance with presidential decree of the Russian Federation No. 296 dated 2 May 2014 on the land territories of the Arctic Zone of the Russian Federation, as amended and supplemented, administrative entities of 9 regions are included in the Arctic Zone. Pursuant to Federal Act No. 193-FZ dated 13 July 2020 on state support for entrepreneurial activity in the Arctic Zone of the Russian Federation, the AZRF free economic zone extends to the following territories of the Russian Far East:

• Chukotka Autonomous Area
• Republic of Sakha (Yakutia): Abyysky, Allaikhovsky, Anabarsky, Bulunsky, Verkhnekolymsky, Verkhoyansky, Zhigansky, Momsky, Nizhnekolymsky, Olenyoksky, Srednekolymsky, Ust-Yansky, and Eveno-Bytantaysky districts

Federal tax incentives

• налог на прибыль – 0% на 10 налоговых периодов после получения резидентом первой прибыли
• tax on profit: 0% for 10 tax periods once the resident turns a profit
• mineral extraction tax at half the existing rate (for hard minerals; only for new mineral deposits. The level of incentives cannot exceed the level of private investment in infrastructure, enrichment or redevelopment)
• zero rate of VAT for work (services) to transport goods out of Russia by sea freight or for icebreaking services for marine vessels, allowing goods to be exported out of the country
• zero-rouble rate of mineral extraction tax when extracting combustible gas used exclusively in the production of liquefied natural gas and (or) as a raw material to produce goods which are petrochemical products, produced with new production capabilities and brought into service after 1 January 2022
• subsidies: 75% of social security contributions (only for new employees; does not apply to projects to extract mineral resources)
• 3.75% rate for social security contributions for SME residents of AZRF

Regional and municipal tax incentives vary between regions.

• chance to benefit from customs-free zone (CFZ) duties in areas of the Arctic Zone which have been earmarked and developed by residents
• state or municipal-owned plots of land for residents of the Arctic Zone (no bidding)
• fast-track checks for Arctic Zone residents, subject to approval by the Ministry of Development of Russia
• provision of both ecological and state expertise for design-estimate documentation
• residents’ interests defended in court (the managing company is entitled to represent and defend in court the interests of AZRF residents which have called on it to do so)
• special occupational regulations at check points on the state border of the Russian Federation in the Russian Arctic