Investment attractiveness

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Major competitive strengths of Sevastopol:

- favorable geographic location;

- warm-water seaport;

- sufficiently developed city transport infrastructure;

- mild climate, comfortable for living and working;

- developed winemaking industry;

- fame of Sevastopol as a historic brand;

- high level of education and culture of the population;

- great potential for tourism development;

- base for ship construction and repair;

- small laboratories and large development and design bureaus, developed IT-market.

 

Priority sectors for investment and development:

- high-technology production,

- tourism,

- winemaking,

- information technologies sector.

Government authorities and institutes for development

Department of priority projects for development of Sevastopol is the government authority responsible for investment policy of the city, improvement of investment climate, promotion of competition and consideration of investor applications.

In February 2015 the Regulations of consideration of investor applications and investment projects administration with “single window” system on the territory of Sevastopol were approved.

Investment portal of Sevastopol - InvestSevastopol.ru

Up-to-date information for investors, entrepreneurs and potential residents about the free economic zone in Sevastopol can be found on the Investment portal of Sevastopol – InvestSevastopol.ru

Portal administration is conducted by the Department of priority projects for development of Sevastopol.  

Free economic zone in Sevastopol and the Republic of Crimea

On January 1, 2015 the Federal law “Development of the Crimean federal district and the free economic zone on the territory of the Republic of Crimea and federal city Sevastopol” and laws concerning changes to the Tax Code and several legal acts of the Russian Federation entered into force.   

The free economic zone (FEZ) one is created for 25 years.

An individual entrepreneur or legal entity can become a participant of FEZ, if it is registered on the territory of Crimea or Sevastopol, registered in local tax body and has submitted an investment declaration.  

According to the agreement on conditions of activity in FEZ, small and medium business entities need to invest in their business in Crimea and Sevastopol not less than 3 mln. rubles during 3 years. Other investors — not less than 30 mln. rubles.

Exemptions and concessions for FEZ participants:

Income tax:

to the federal budget – 0% (for 10 years),

to the budget of Sevastopol — 2 % - during 3 years; 6 % - from the 4th till the 8th year; 13.5 % – from the 9th year, from the moment of enlisting in FEZ residents register.

FEZ participants are freed from assets tax (for 10 years after registration of property, purchased for the purpose of corresponding activity performance) and from land tax (for 3 years).

Insurance fee – 6% (Pension Fund of the RF) + 1,5% (Social Insurance Fund) + 0,1% (Federal Compulsory Medical Insurance Fund) = 7,6%.

Simplified entrance and port call:

For foreign tourists — free entrance for 30 days, obtaining of single tourist visa.

Crimean sea ports are declared free ports with simplified border control, custom and other procedures, stipulated by the custom laws of the Customs Union.

Simplified land use procedures:

Documentation on object placing on a land plot is approved without public hearings (from 2017).

Urban development regulations are not specified for land plots, intended for object, necessary for investment project implementation (from 2017).

Land plots for investment projects are leased to a FEZ participant without holding an auction, for the term, necessary to implement the agreement on performance in FEZ.

 

Industrial park

It is planned to create an industrial park in Sevastopol, like Greenfield.

Basic industrial park sectors are instrument engineering, electronic and electro technical production.  

Engineering and transport infrastructure of the industrial park may be created out of public funds: power lines, gas pipe lines, water supply and water disposal system, parking lots.  

Creation of the industrial park infrastructure – 2015-2018.

Financing of industrial park infrastructure and utility lines is projected under the Federal purpose-oriented program  “Social and economic development of the Republic of Crimea and federal city Sevastopol till 2020” in the amount of  1.665 bln. rubles.

 

Social and engineering infrastructure development

By order of the Government of the Russian Federation dd. 11.08.2014 No. 790 Federal purpose -oriented program “Social and economic development of the Republic of Crimea and federal city Sevastopol till 2020” is approved.

 

Priority and primary directions of financing under the Federal purpose-oriented program are construction and reconstruction of housing and utilities sector objects, healthcare objects, educational institutions, creation of the industrial park, reconstruction of the airport “Sevastopol”, construction and upgrading of roads, public transport renovation, development of tourist sector, harmonization of inter-ethnic relations.

Total volume of financing of the Program for Sevastopol from the federal budget till 2020 comprises 42 bln. rubles. 

In housing and utility sector the following development actions are planned:

- water supply – 0.21 bln. rubles

- water disposal - 8.4 bln. rubles, include construction of complex city water and wastewater treatment facilities with complete biological cleansing and wastewater disposal of one of the tourist centers — Balaklava.   

- central heating - 3 bln. rubles, reconstruction of six central heat distribution stations and complete repair of external supply lines.

1 bln. rubles will be sent on development of transport infrastructure, for construction and reconstruction of municipal roads, 1.26 bln. rubles — for development of port infrastructure and intercity public transportation.

Development of the airport «Sevastopol» includes three aspects: flight strip repair (at the expense of the Ministry of Defense), creation of infrastructure for civil flights (1.7 bln. rubles under Federal purpose-oriented program) and construction of passenger terminal complex (attraction of investments is planned).

Vehicle fleet renovation of public transport for the amount of 1.1 bln. rubles is projected together with State transport leasing company.    

In social sphere, in healthcare sector 1.8 bln. rubles are projected to be spent on construction of two multi-purpose diagnostic and treatment units of oncologic dispensary and municipal hospital No. 1, construction and reconstruction of objects of Sevastopol state university (4.8 bln. rubles) and modernization of pre-school and general education (4.3 bln. rubles) are planned.

For development of the city economy and achievement of surplus city budget creation of 5 tourist clusters with total amount of financing of 11.4 bln. rubles is planned. 1.7 bln. rubles will be spent on creation of the industrial park.

 

 

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