Special economic zone in the republic Chechnya

Thursday, May 19, 2022

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Chechen Prime Minister Sergei Abramov has come up with the proposal to set up a special economic zone in the republic. "We are to file an application for developing in Chechnya a special economic zone project that has been worked out by the Russian ministry for economic development and trade," he said. Mr. Abramov reported about the Chechen government's intention to create favourable conditions for Chechen business people and entrepreneurs from other regions. Twenty investment projects for medium business are to be offered already this December, added Mr. Abramov. There are also a lot of privatization programs for small business in agricultural processing. Full of city-development ambitions, Chechnya wants to begin the construction of an aqua park, a sports stadium, an Olympic swimming pool and other socially-useful facilities. "The foundation of an aqua park in Gudermes, Chechnya's second largest city, will be laid in January 2005 to be built with extra-budgetary funds and to be commissioned (its first stage) next year," said Mr. Abramov. Besides, a stadium seating 20,000-25,000 spectators is expected to be better than Russia's only specialized roofed football stadium Lokomotiv in Moscow. Grozny's Terek football team, which is to play in the Premier League of the Russian football championship next year, does not have a stadium of its own and has to hold home games in neighboring republics. Speaking about housing construction in Chechnya, Mr. Abramov said that the year 2005 will see 2.5-3 million square meters of housing and office quarters built in rural and urban areas. A housing construction program to come in force this December will be one of Chechnya's economic priorities. A bill on special economic zones is to be submitted at the State Duma before the end of 2004. Once the law is passed, a Russian constituency, planning to set up a special economic zone, should find an investor, prepare a feasibility report, coordinate it with municipalities and submit it for approval at the ministry for economic development and the government. The entire process would take about two years, says the ministry for economic development and trade. The latter also believes that Russia can launch not more than 10 special economic zones in midterm, with most of them to be located in frontier areas. Under this bill, companies getting the right to work in a special economic zone, will be relieved of profit tax within the first three years of their activities. Further on, provided the company re-invests 80% of its profits after taxation, it will be entitled to pay a soft profit tax (down to 3.75%). After the eighth tax period, profit tax will be exempt on general conditions.

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