Normative and Legal Support of Foreign Economic Activity

A special attention has been paid to development of normative and legal basis of the foreign economic activity in the Republic.

Being enacted on July 19, 1996 by the supreme legislative body of the Republic of Tatarstan, the Law on the Foreign Investments in the Republic of Tatarstan is one of the most complete instruments regulating investments in the Russian regions. On the one hand. it is closely connected in conceptual sense with the Russian Federation legislation and on the other, it has some specific features relating to the competence and capabilities of the Republic of Tatarstan.

The law proceeds from priority of the international treaty relations. It allows for guarantees against compulsory withdrawals and unlawful actions of governmental bodies and their officials; norms for compensating and restitution of losses to foreign investors in the cases of alterations in legislation; the norms for transfers of payments related to foreign investments in case of termination of the investment activity, etc. The law places particular emphasis on the matters of foreign investments promotion. The point is on taxation measures (tax privileges, tax holidays, tax withdrawals, tax deferments, etc.), financial measures soft loans, loan warranties (guaranties), conversion of debts into shares, as well as nonfinancial measures privileged governmental contracts and provision of certain services. The law allows for the title to land lots and the right to use natural resources of the land lots.

The Presidential Decree of the Republic of Tatarstan on Promotion of Foreign Investments in the Republic of Tatarstan specifies taxation privileges for enterprises with foreign investments, sets up the procedure for granting land lots and governmental guarantees to foreign investors.

The purpose of the Law on the Status of the Approved Investment Project with Foreign Share is to ensure the conditions promoting intensive investment activity, including the priority sectors of Tatarstan economy. The law fixes the system of guarantees and privileges (profit tax exemption, excise tax exemption in extractive sectors, etc.) for the investment projects approved by the decision of the Tatarstan Cabinet of Ministers. The period of tax holidays is from 1 year to 5 years with further prolongation in the amount of 50%.

Being enacted in 1996, the Law on Foreign Trade Activity in the Republic of Tatarstan identifies fundamentals of the foreign economic policy in the Republic of Tatarstan taken as a sovereign state and specifies basic principles of exercising foreign trade activity. The law is aimed at setting favourable economic and organisational conditions securing interest of the foreign trade participants, as well as pursues promotion of the foreign economic activity and stabilisation of the local market.

The privileges specified in the Tatarstan legislation and aimed at promotion of small and medium businesses have also contributed to the development of economic cooperation with foreign partners.