18. Investment Policy of Samara Regional Administration

For the last years the problem of the investments has become very actual, and after last year financial crisis of August 17 this problem has become aggravated in the greater degree. The continued decrease of the investments for period of economic reforms is now determined not only by defect of financial assets, but also by necessity of realization of sober competent investment policy.

The key direction in activity of Administration of Samara region was the purposeful and series implementation of measures on attracting the investments and formation of a favorable investment climate of region.

All these and many other problems concerning investment policy of the region and a favorable investment climate of the region, are main in the plans of activity of The Region Administration.

The activity on the solution of these problems was conducted and continues to be conducted simultaneously on several directions. It is possible to focus on the main five: 1) formations of legislative base; 2) realizations of the program" the Regional investment initiative"; 3) formations of a regional investment infrastructure; 4) activities with the investment projects; 5) participation and realization of forums, exhibitions, practical conferences and meetings of an international level, round tables and seminars, publication of an information material.

BRIEF DESCRIPTION OF EACH DIRECTION

About one year ago, according to the experts, the legislative limitations for the investors in the region predominated above advantages. Today they have developed and adopted the package of the legislative, normative and legal acts stimulating investment activity and regulating investment activity at a regional level. Here are some basic normative documents adopted as Laws in a 1998: "About the investments in the Samara region", "About ground", "About the external debt", "About the special economic zones on territory of the Samara region", normative documents forming the legislative basis of the mortgage, "The Order of realization of competitions of the investment projects financed by credit resources of the regional budget" "About the order of transfer to a property as security of the Samara region" and others.

According to evaluations of the experts the adopted normative acts promote creation of a favorable investment climate in the Samara region, and

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also are directed to development of investment activity as a whole, to creation of a most favored nation treatment for the investors and install particular covenants and certain warranties of implementation of investment activity on territory of the Samara region.

Investment policy of samara regional administration

The narrowness of granted tax privileges (pursuant to the law " About the investments in the Samara region "), profit tax and tax to property, in a share entered in the regional budget and the limit of term of their operation (no more than two years) cannot create maximum attractive conditions and make our region most favorable in comparison to other Russian regions. Taking into account features of activity of the investors in the Russian market, the Administration of region understands necessity of further perfecting of legislative base and continues activity in this direction.

In particular, the activity on adaptation both modification and additions in the law "About the investments in the Samara region" is now completed and we hope, that in near future it will pass all procedural stages and will be adopted by Samara Region Duma. This law essentially expands all kinds of granted tax privileges (taxes to the users of highways - in a part entered in territorial road fund, but no more than 50 % and clearing of the ground tax at implementation of new construction), and expands temporary frameworks of granting of tax privileges on period of actual recoupment of the investment project, but no more computational payback time estimated with allowance for granted privileges. Besides the forms of state support for the investors realizing the investment projects on territory of the Samara region extend, in particular, the capability of obtaining by the investor target donations from the regional budget for financing on the share basis of the expenses connected with:

•development of a municipal infrastructure of object of an investment (creation and (or) renovation of systems of water-heating and power supply, water drain, clearing facilities, roads and access roads, other objects of engineering networks and communications of general use of the sum equivalent to 500,000 (five hundred thousands) of US dollars at the rate Central Bank of Russian Federation, established on date of the conclusion of the investment agreement);

•training and conversion training of laborers - for the 100 amount of the minimum size of payment of a transactions established by the legislation of Russian Federation (these measures of inducing the investors are conventional in the world practice).

It is necessary to mark, that the region will have the greatest effect and a prize only when we shall work with local government bodies together. That means that the administrations of cities and regions of region at the level also

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should create appropriate favorable conditions for activation of investment processes and tax privileges, in a part entered in the local budget, and rendering assistance at registration of the enterprises, while giving grounds and participation in the building of the communications and so on. Unfortunately our region now can not boast on it with the minor exceptions like Pohvistnevo district, and Chapayevsk city which are determined by the regional legislation as special economic zones. These two places now work on normative base on creation of investment conditions at a local level.