SUCCESS INDEX. A republic open to investors: what makes Bashkiria more and more interesting for business

In recent years, Bashkiria has been consistently working to transform it into a region attractive to investors. The criterion of success can be considered the leading position of the republic for three consecutive years in the National Rating of the investment climate, the dynamic development and expansion of the territory of the special economic zone, the growth of the number of residents of preferential zones and, as a result, investments in the economy of Bashkiria up to 500 billion rubles in 2022. Nail Gabbasov, General Director of the Development Corporation of the Republic of Belarus, told about how the investor support system works in the Republic, how an important incentive for them is the drastic reduction of bureaucratic procedures in the implementation of projects, about the prospects of cooperation with foreign business in an interview.

- Nail Shamilevich, SEZ "Alga", recognized as the most dynamically developing in Russia for two years in a row, has recently significantly expanded the territory. What will the republic get from this?

In June 2023, the territory of the Alga zone was expanded to include sections of the Ufa Industrial Park. Now the total area of the special economic zone is more than 763 hectares. There are 14 residents registered here with a total investment of about 43 billion rubles and the creation of more than 2,300 jobs. New residents can apply for tax benefits, as well as take advantage of the opportunities of the free customs zone operating here. In the future, the republic, in order to further develop the Alga zone, will be able to restructure budget loans within the framework of the decree of the Government of Russia No. 1704. It works like this: the region finances the creation of infrastructure for new investment projects, and the federal center, in turn, will write off the debt on budget loans in the amount of taxes received from these projects to the federal budget. This is beneficial both to the republic and to investors themselves. In general, the expansion of the SEZ "Alga" will contribute to the further socio-economic development of Bashkiria due to the growth of industry, investment, exports and others.

- When it comes to new investment projects, as a rule, the emphasis is on the number of new jobs and the volume of investments in production. And what is the direct economic effect of the project for the republic?

The economic effect received by the republic is expressed in the form of tax revenues to the regional and local budgets. These are, first of all, regional parts of income tax, personal income tax and other payments. The budget effect is calculated based on the difference between the inflows of taxes actually received in the consolidated budget of the republic as a result of the implementation of the investment project, and outflows in the form of subsidies and grants from the republican budget, budget investments, as well as in the form of tax benefits provided to the investor. Let's take a concrete example of the Ufa Industrial Park. Over the 10 years of his work, 1.4 billion rubles have been invested in the creation of engineering and transport infrastructure facilities. At the same time, the consolidated budget of Bashkiria received 1.7 billion rubles of taxes from residents of the park. In addition, residents paid 7.6 billion rubles to the federal budget. At the same time, today only 7 out of 18 residents have started manufacturing industrial products, the rest are at the construction or design stage.

- The Head of Bashkiria instructed to strengthen cooperation with Kazakhstan, Uzbekistan and Turkey. There is a noticeable interest in the republic of potential investors from these and other friendly Eastern countries, in particular, China. What joint projects have already entered the implementation stage?

The Republic pays special attention to cooperation with foreign countries in the investment, trade and economic spheres. In order to attract investments and promote Bashkiria in international markets, the republic has established representative offices in Turkey, Kazakhstan, Belarus, Uzbekistan, and China. Last year, agreements of intent on the implementation of investment projects were signed with Turkish partners. Among the actively implemented projects, it should be noted the placement in Bashkiria of the production of bridge and cantilever cranes under the trademark "zfatihler Crane". The volume of investments is about 100 million rubles. A production site has already been selected for the investor. The project was recently approved by the Investment Committee under the leadership of the Head of the Republic of Belarus Radiy Khabirov. The Turkish company Agropro Makine plans to build a plant in Bashkiria for the production of equipment for granaries, as well as flour production. It is assumed that the investment will amount to 7.5 billion rubles.

- How much is our area "Alga" interesting to foreign investors?

Of course, it is interesting, because in addition to the tax benefits provided by the infrastructure of the sites, with a relatively low rent, the investor is exempt from paying import customs duties and taxes on foreign equipment for the period of its stay in the SEZ. In addition, it is exempt from VAT and import duties on imported materials and raw materials processed on the territory of the SEZ. Currently, the issue of placing a heparin production enterprise in the "Alga" zone is being actively worked out with Chinese investors. We expect detailed information from the investor about the technological process of production to determine compliance with the requirements of domestic environmental legislation.

- Is there any specifics in the support of foreign investors' projects related to the peculiarities of economic and legal systems, mentalities?

Business needs are the same, regardless of whether it is a foreign investor or a Russian one. Sites provided with the necessary infrastructure, sales markets, availability of raw materials, government support measures, especially tax incentives are important for everyone. Mentality certainly plays a role. So, Chinese investors carefully weigh everything more than others and are in no hurry to make a decision - such a trait helps to discuss in advance the smallest details that will affect further work. As for the differences in economic and legal systems, during negotiations, the requirements of Russian legislation for the activities planned by the investor are always discussed. For our part, we are always ready to assist in obtaining the necessary documents and permits.

- A program of investment protection and promotion is being implemented in the republic, which provides for reducing the excessive bureaucratic burden on business. What steps in this direction will make Bashkiria even more attractive to investors?

Since July 1, 2023, on behalf of the Head of the Republic, the liberalization of investment legislation has been carried out, the procedure for obtaining state support measures has been simplified and the minimum investment requirements have been abolished. At the same time, the total amount of state support measures should not exceed 30%. Excessive bureaucratic procedures are a thing of the past. Previously, in order to obtain a land plot for rent without bidding and tax benefits, an investor had to apply several times to various government agencies with an impressive package of documents. Now, in order to receive state support, you do not need to collect a stack of papers, provide a business plan and documents confirming solvency. Any entrepreneur, regardless of the volume of investments, can submit an investment declaration containing basic information about the project, as well as data on the requested land plot and state support measures. The duration of obtaining approvals is 12 working days, which is much faster than before, after which the project is submitted for consideration by the Investment Committee, which decides on recognizing the project as a priority and providing it with state support. Further, an agreement on the protection and promotion of investments is concluded with the investor. Thus, an enterprise that has decided to invest in the republic can receive a wide list of preferences in a simplified manner.

Based on materials IA Bashinform