INVESTMENT CLIMATE
Political situation
Tatarstan enjoys notable political stability. This arises
from several factors; long term neighbourship of two biggest ethnic groups-the Tatars
and the Russians; and more favourable economic situation as compared to the
other areas of the former USSR. Political radicals wield no real
influence in the Republic life and gain support of small groups of
population.
Foreign investment policy
The Government has consistently been open to foreign investment. The climate
for joint ventures with Tatarstan enterprises is very favourable. Investment
projects, involving know-how and new technologies into Tatarstan industry are of profound
interest. Practice shows that the development of joint ventures, both with
state and private enterprises, is highly profitable due to the privileges
granted and to considerable savings in production expenses.
Investment incentives and privileges
With the purpose to stimulate investment activities in the Republic of
Tatarstan, the governmental bodies take certain measures both of financial
and organisational character (tax exemption, tax relieves, possibility to
acquire land for constructional purposes, industrial premises, etc.). There
are specific governmental entities, committed to encourage foreign
investment-Ministry for Foreign Economic Relations, Republic of Tatarstan
and separate department of the Republic State Committee for Economy.
Legislative acts on protection of foreign investor's interests have been
prepared.
Tatarstan pioneered the path of providing tax breaks for foreign investors.
In Tatarstan revenue from the most lucrative levy, the corporate profits tax, is 35%, with 13% going to the federal government. In Tatarstan government has the discretion to
waive the remaining 22% for specific enterprises or Joint ventures.
The local property tax at 2% can also be waived. Certain exemptions from import and export tariffs are also possible, as with VAT. levied at a standard rate of 20 % (plus 3% special
tax) and split 50-50 with Moscow.
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