Falk Tischendorf - Guide for Investors

Falk Tischendorf

Attorney-at-Law

Managing Partner of BEITEN BURKHARDT’s Moscow Office

Fachmedien Recht und Wirtschaft | dfv Mediengruppe | Frankfurt am Main

Information on the authors:

The editor, Falk Tischendorf, has been working for 18 years in Moscow. He is the Managing Partner of the Moscow office of BEITEN BURKHARDT, an Arbitrator of the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation, and a member of the Board of the Russian-German Chamber of Commerce (AHK). Mr Tischendorf has considerable experience working in Russia.

The Guide for Investors was prepared in cooperation with the Ministry of Industry and Trade of Russia and the Industrial Development Fund of Russia.

The team of authors from the Moscow Office of BEITEN BURKHARDT consists of German and Russian experts who draw on many years of work experience in Russia, including Alexander Bezborodov, Taras Derkatsch, Vasily Ermolin, Kamil Karibov, Alexey Kuzmishin, Oleg Ljaljutski, Bilgeis Mamedova, Egor Repin, and Ilya Titov.

In this Guide for Investors, senior management of leading German and international companies also share their practical experience of the localisation and setup of production facilities in Russia. In addition, all the topics are covered extensively thanks to the input of consultants from the Industrial Development Fund of Russia.

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ISBN 978-3-8005-0021-5

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Dear Ladies and Gentlemen,

Colleagues, Friends,

We are delighted that you liked our Guide on the Localisation and Setup of Production in Russia. Now we would like to draw your attention to the second part of the guide. This time colleagues from our Moscow office drafted the guide jointly with the Ministry of Industry and Trade of Russia and the Industrial Development Fund in order to provide you with some cogent and compelling arguments for relocating production facilities to Russia.

Russia is a country with vast resources and continues to attract significant foreign direct investment. The country is interested in upgrading its production facilities and bolstering the country’s competitiveness on the global market. And this is the reason why foreign investments are actively welcomed, and significant opportunities have opened up in different sectors.

Whereas the first part of the guide focused on the so-called special investment contract, the second part addresses specific aspects of certain industrial sectors. What rules must be observed in the mechanical engineering or pharmaceuticals sectors, in information technologies or the manufacturing of agricultural equipment? What level of localisation is required and what incentives are available? We provide you with an overview of the most important sectors and share our experience of the successful implementation of localisation projects.

Furthermore, once again you will find an English translation of the main regulations. They will prove particularly valuable when you have to take the right decision. Should you have any questions, please do not hesitate to contact the publishers.

We wish you every success in Russia!

Falk Tischendorf

Attorney-at-Law

Managing Partner of BEITEN BURKHARDT’s Moscow Office, Arbitrator at the ICAC at the CCI of the Russian Federation

Dear colleagues,

Thanks to our joint efforts we are establishing a favourable business climate aimed at attracting investments to the real sector of the economy and incentivising the establishment of state-of-the-art competitive production facilities in Russia. This is a mutually advantageous partnership which facilitates a significant increase in trade turnover between our countries and enables us to consolidate industrial relations.

The second guide for foreign investors that we present to you was the result of open and constructive dialogue between business and the state. The guide contains information on the key priorities of our industrial policy, the criteria for determining products which are recognised as “Made in Russia” and the localisation parameters.

The Ministry of Industry and Trade of Russia continues to focus on improving the long-term instruments available to attract investments and to develop the existing support system, taking into account the opinion of the business community. That is why a separate section in the guide is dedicated to the updated special investment contract mechanism to be launched in 2020. The main goal of this mechanism is to support investments in the development and localisation of cutting-edge technologies.

Over 50 per cent of the projects launched under the special investment contracts to have been signed to date are being implemented with the participation of foreign companies. Six of the special investment contracts were concluded with representatives of major German businesses. We expect SPIC 2.0 to prove even more popular with investors interested in the production of high-tech export-oriented products. You will be able to find information on all the relevant regulations by simply scanning the QR code.

For my part, I can assure you that the Ministry of Industry and Trade of Russia and the Industrial Development Fund will remain as open as possible to the business community. I expect to see a continuation of our productive joint work!

Deputy Minister of Industry and Trade of the Russian Federation

V. S. Osmakov

Dear colleagues!

The Russian state has made a priority of the development of industry, the localisation of production facilities in the country, the implementation of new export-oriented projects, and also the transfer of modern technologies. These plans can be achieved in close cooperation and dialogue with our foreign partners.

As part of its support for industrial production facilities, and also for the deployment of cutting-edge technologies, the Industrial Development Fund focuses on the following key areas: it provides special-purpose loans at interest rates of 1 %, 3 %, and 5 % p.a., is the expert and consulting organisation for the special investment contract mechanism, and offers a comprehensive range of advice on other industry support measures.

The new publication of the Guide not only updates the main industry trends and legislation regulating production localisation processes, but also reflects the key changes to the special investment contract mechanism, whereby investment projects should now be aimed at the deployment of cutting-edge technologies that make it possible to manufacture products in Russia that are competitive globally.

The Guide that you hold in your hands will enable you to find out about a wide range of financial and non-financial support measures for the manufacturing sector, enshrined at the level of legislation. Russia is creating a favourable legal climate and an advantageous, transparent environment for investors who wish to further increase the level of localisation in our country and ramp up investments in the establishment of high technology cutting-edge production facilities. Moreover, the Guide will help you implement such projects.