Krasnodar Region
The Krasnodar Region is one of the most important regions in Russia. A good location, favourable climate and abundant natural resources all make the region highly attractive.
The Krasnodar Region has enormous investment potential, as well as considerable competitive advantages.
Below is further evidence testifying to the Krasnodar Region’s investment appeal. Over 750 foreign-owned enterprises successfully operate in the region; these enterprises were set up with foreign partners from over 70 countries. Over the last six years, foreign investors have put up about USD 2.8 billion – including USD 715 million in 2007 and USD 1.18 billion in 2008. In 2008, RUB 321.5 billion was invested in the region (RUB 318.5 billion was the target) – 117% higher than in 2007 (109% across Russia on average). According to the Krasnodar Statistics Agency, investments in the first six months of 2009 total approximately RUB 123.3 billion, in other words, investments have remained at the previous year’s level.
The New Anapa special economic tourist and recreational zone
The Krasnodar Region boasts a unique climate and nature that is ideal for facilitating the development of almost any type of tourism, from beaches to ski resorts. As a result, the Russian Government decided to establish a special economic tourist and recreational zone in the Krasnodar Region. One of the land plot of the zone – the New Anapa – is located between the Black Sea and the Kiziltash and Bugaz limans in the Anapa city district near the Bugaz sandbar. The zone is 882 hectares in area and can cater to 20,000 people.
The project to develop the special economic zone will be implemented using public private partnerships.
It is expected that the construction and reconstruction of utilities for the New Anapa special economic zone project will be financed from public funds and that the construction of tourist locations and establishments will be financed through private investment. The total amount of expected investment will be at least EUR 1.6 billion, including public investments of at least EUR 412 million.
Implementing the project to develop the New Anapa special economic tourist and recreational zone will lay the foundation in establishing a multi-faceted all-season world-class resort area in the Krasnodar Region.
In order to create favourable conditions for residents in the New Anapa zone, the region is implementing a one-stop shop principle for public services. Residents will be able to address issues related to tax, land and property relations, the construction and operation of venues, engaging foreign citizens and other issues in a single service centre located in the special economic zone – this will help to simplify administrative procedures and reduce business expenses.
Special economic zone residents will qualify for tax benefits: an investor will be exempt from property tax and transportation tax during first five years within the special economic zone; in addition, profit tax rates and rental payment rates for land will be reduced.
The Azov Gambling Zone
A special gambling zone has been established on the border of the Krasnodar Region and the Rostov Region. The zone is located between the Krasnodar Region’s municipality, the Shcherbinovsky District (1,000 hectares in area), and by the Rostov Region’s municipality, the Azov District (1,000 hectares in area). The development of the gambling zone is on the list of short-term priorities for the Krasnodar Region Administration.
According to market research, daily attendance in Azov is expected to be about 70,000, while the annual number of tourists visiting the city will exceed 6.5 million.
In addition to gambling establishments, it is intended to construct luxury resort infrastructure facilities. At least RUB 350 billion in private investment will be needed to construct these facilities.
The expected gross revenue of resident companies from gambling, hotel, retail and entertainment activities will by 2017 be somethere between RUB 200 billion and RUB 400 billion.
Sochi for 2014 Olympics
With the support of the Russian Government, preparations for the Sochi 2014 Winter Olympics are currently in full swing. The goal is not only to hold a sporting event but also to create a universal world-class tourist resort in the south of Russia.
In the context of the global financial and economic crisis, Russia’s Olympic project—with a total investment cost of about USD 20 billion—represents one of the ew islands of stability for investors and contractors. The project has the full support of the government and there is no doubt that it will be implemented in full. There will be no difficulty meeting the deadlines agreed with the International Olympic Committee.
Sochi already has a reputation for being the largest and most famous Russian resort, favoured by millions of Russian and foreign visitors. The tourism market in Sochi is already worth over USD 5 billion annually and has a growth potential of USD 8–10 billion after 2014. It is for this reason that Russian businesses are so eager to invest in Sochi and implement multi million- and billiondollar projects, including the Olympic project.
There is no doubt that investors in Olympic sites will be able to benefit from the most favourable investment conditions. These include tax and administrative benefits at a regional level that are in line with the Krasnodar Region’s investment laws. In addition, there is a state developer—Olympstroy State Corporation—which has created a so called ‘ready to operate site’ for investors, providing not only the necessary infrastructure but which also issues all necessary permits and approvals.
Investors can also count on the full support of the federal government.
International Investment Forum
The International Investment Forum in Sochi is the main platform in the country designed to attract Russian and foreign investments, not only into the southern regions of Russia, but the country in general. Most Russian regions, as well as interesting initiatives led by Russian and foreign companies, are annually represented at the forum. Russian Government leaders, together with Russian and foreign senior managers and professionals, engage in meetings, conferences, round table discussions and workshops.
"Stability and a high pace of economic growth are perceived by any investor as essential conditions for business development; the Krasnodar Region meets both these requirements, and that is why the Sochi was selected as the host city for the 2014 Olympic Games".
Peter Gerendasi
Managing Partner
PricewaterhouseCoopers Russia
"We are also ready to offer the most effective system of government support available in Russia for investors, including preferential taxation, subsidised interest rates on loans, government guarantees, preferential conditions for land usage and investment project support throughout the implementation process".
Alexander Nikolayevich Tkachev
Head (Governor) of the Krasnodar Region
Administration
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