ABOUT THE FREE PORT

PURPOSE

The implementation of the free port, in spirit and the context develops the ideas and provisions set out in the law on priority development areas, that considers specific features, as well as transit and logistics potential of the south of Primorye.

In December 2014 during his Address to the Federal Assembly of the Russian Federation President Vladimir Putin proposed to grant Vladivostok the status of a free port with an appealing light customs regime.

The project’s objective is the expansion of cross-border trade, development of transport infrastructure and integration of Primorye Territory into world-wide transport routes, as well as attraction of investments, setting up a network of logistics centres with particular terms of cargo transportation, storage and partial processing, the organisation of non-oil export-led higher value-added industries.

GEOGRAPHY

The free port regime is active in five regions of the Russian Far East: Primorye Territory, Khabarovsk Territory, Kamchatka Territory, Sakhalin Region and Chukotka Autonomous Area. The special status applies to 22 municipalities.

The territory of Vladivostok Free Port includes all critical ports of the Far Eastern south from Zarubino to Nakhodka, as well as Vladivostok International Airport (Knevichi). The free port zone includes advanced international transport routes Primorye-1 and Primorye-2.

LEGAL FRAMEWORK

The President of the Russian Federation signed the Federal Law No.212-FZ ‘On Vladivostok Free Port’ on 13 July 2015, and it became effective on 12 October 2015.

ECONOMIC BENEFITS

The unique legal regime for business and investment operations is effective in Vladivostok Free Port. Investors with the Vladivostok Free Port resident status holders receive many incentives: tax breaks, fast-track customs and visa procedures, administrative process simplification.

Vladivostok Free Port provides:

  • 0% income tax for the first five years, 12% for the next five years (Kamchatka Territory has 5% income tax);
  • 0% land tax for the first three years;
  • 0% property tax for five years and 0.5% for the next five years;
  • 7.6% incentive insurance premium rates for investment projects implemented in the TADs during the first ten years, reduction factor for the natural resources production tax and a fast track procedure for value added tax return.
  • Shortened field audits;
  • Fast-track terms for obtaining capital construction permits;
  • Single-window mode for passing through border controls, security checkpoints availability around-the-clock;
  • Simplified visa regime: eight-day visa at the border;
  • Duty-free and tax-free customs regime for residents:
    • Import, storage, consumption (use) of foreign goods;
    • Export of goods (equipment);
    • Import of foreign goods (equipment).
  • State protection: the managing company has the right to file claims on the protection of the free port residents.

ECONOMIC OUTLOOK

Experts anticipate a substantial growth of the Primorye Territory GRP, 2.2 times by 2025 (up to 1.4 trillion roubles) and 3.4 times by 2034 (up to 2.1 trillion roubles). The growth of the Far Eastern Federal District GRP can reach 1.97 roubles by 2025. The number of newly created jobs is estimated at 84.7 thousand by 2021, 108 thousand by 2025 and 468.5 thousand by 2034.

VLADIVOSTOK FREE PORT MANAGING COMPANY

Far East Development Corporation is a managing company of Vladivostok Free Port, where the Government of the Russian Federation is a 100% shareholder.