Investment Protection and Promotion Agreement: Restart

The Ministry of Economic Development and Investment Policy of the Republic of Bashkortostan held a meeting with the regional offices of business associations: the Russian Union of Industrialists and Entrepreneurs, Business Russia, the Chamber of Commerce and Industry, Support of Russia, as well as the Association of Business Organizations of the Republic of Bashkortostan and business representatives on the issue of restarting the mechanism of protection and promotion of investments in the Russian Federation (NWPC). The discussion was attended by representatives of relevant state authorities and JSC "Development Corporation of the Republic of Bashkortostan".

Recall that the NWPC Institute was first launched in Russia on April 1, 2020 and operated for one year. This year, the federal law has been updated, as well as federal and regional by-laws regulating the procedure for concluding and implementing the NWPC have been updated. At the federal level, the authorized body for the conclusion of the NWPC is the Ministry of Economic Development of the Russian Federation. In the Republic of Bashkortostan, the Ministry of Economic Development and Investment Policy of the Republic of Bashkortostan is the body authorized to conclude regional NWPC.

The NWPC mechanism is key for accelerating the inflow of investments into the economy and is intended for large investment projects. An organization implementing a project that meets the criteria of novelty and scale has the right to conclude a NWPC with the Russian Federation and/or a subject of the Russian Federation. Also, a municipal entity has the right to act as a party to the agreement. At the regional level, it is possible to conclude a NWPC for projects with investments from 200 million rubles. For the conclusion of the federal NWPC, the volume of capital investments of the project should be at least 750 million rubles. The attractive factors of this mechanism for the investor are: the so-called "stabilization clause" is a guarantee of the immutability of the legal conditions, that is, acts that worsen the conditions for the implementation of the investment project in comparison with the conditions determined at the time of the conclusion of the NWPC will not be applied to the organization implementing the project, as well as the right to reimbursement of costs or the possibility of obtaining The Deputy Minister of Economic Development and Investment Policy of the Republic of Bashkortostan Zulfiya Gumerova commented on the tax deduction.

One of the essential requirements for the conclusion of the NWPC is the novelty of the project. For an organization that has made a decision to implement the project before April 1, 2020, but not earlier than May 7, 2018, and has received a permit for the construction of real estate objects or has begun capital investments no earlier than May 7, 2018, it is possible to submit an application for the conclusion of the NWPC no later than December 31, 2022. For organizations that have received a permit for the construction of real estate objects after April 1, 2020, the application is submitted no later than one year after the date of the decision on the approval of the budget for capital investments.

To conclude a regional NWPC as a private project initiative, the organization sends an application in electronic form via the electronic GIS system "Investments" to the Ministry of Economic Development and Investment Policy of the Republic of Bashkortostan, to the Ministry of Economic Development of the Russian Federation - at the conclusion of the federal NWPC. The application must be signed with an enhanced electronic personalized signature of the head of the organization implementing the investment project. In addition, one of the conditions for the conclusion of the NWPC is the compliance of the project with the criteria for the effective use of the budget of the Republic of Bashkortostan. We, in cooperation with the relevant republican authorities, consider the application and the package of documents attached to it and prepare for an investment project applying for the conclusion of the federal or republican level NWPC, a conclusion on the compliance or non-compliance of the project with the criteria for the effective use of funds from the relevant budget of the budgetary system of Russia. The corresponding procedure for evaluating the effectiveness of the investment project was approved by the Government of the Republic of Bashkortostan in October this year, Deputy Minister of Economic Development and Investment Policy of the Republic of Bashkortostan Marat Islamov explained.

The restart of the NWPC mechanism aroused keen interest among invited representatives of business, business associations and republican executive authorities.

For a more detailed and substantive discussion of the possibilities of the federal, regional and municipal NWPC, the Ministry of Economic Development of the Republic of Bashkortostan invites investors interested in this mechanism to the section "NWPC Mechanism: Reboot", which will be held on December 16, 2022 at the site of the International Business Week in Ufa.

For reference:

The procedure for concluding the SZPC is regulated by:

1. Federal Law No. 69-FZ of April 1, 2020 "On the Protection and Promotion of Capital Investments in the Russian Federation"
2. Resolution of the Government of the Russian Federation No. 1602 of September 13, 2022 On Agreements on the Protection and Promotion of Investments";
3. Resolution of the Government of the Republic of Bashkortostan dated October 10, 2022 No. 647 "On Approval of the Rules for Concluding Agreements on the Protection and Promotion of Investments to which the Republic of Bashkortostan is a Party and the Russian Federation is not, Amendments and termination of such agreements".