For the Investor

ABOUT THE REGION

Sverdlovsk region

The Sverdlovsk region falls within the top 10 regions of Russia that produce around 50% of the country’s industrial output. The region is rich in natural resources, and possesses a large diversified industrial complex, and considerable scientific and staffing potential.
Sverdlovsk region is located at the crossroads of major transport arteries connecting Europe and Asia, and is the third transport center by size in Russia.
The basis of the regional economy is mining and metallurgical enterprises. In the region, such industries as recovery of uranium and nonferrous-metal ores and mechanical engineering are also well developed (see the map of industrial enterprises distribution in Sverdlovsk region).

Stable economic growth makes Sverdlovsk region attractive for many local and foreign investors. Vivid confirmation of the favorable investment climate is provided by international investment projects carried out in the region in different industrial sectors, such as production of electric locomotives (Siemens AG and the Sinara Group), cement (Dyckerhoff and Sukholozhcement), titanium alloy parts for planes (Boeing and the VSMPO-AVISMA Corporation), etc.

Unique possibilities for industrial cooperation have been created in the Sverdlovsk region.
Here we have such enterprises as

According to the majority of the main social and economic
indexes of development, Sverdlovsk region is
among the top ten regions
of the Russian Federation. It holds:
  • 3rd place - by retail goods turnover
  • 6th place - by industrial production output
  • 8th place - by volume of investments into fixed assets
Sverdlovsk region makes a sizable contribution
to the all-Russia manufacturing of many of the most important
types of products
  • titanium production – 100%
  • cargo railroad carriages – over 70%
  • asbestos – 45%
  • 10% общемирового производства глинозема
    9% – алюминия

Benefits, additional information

Titanium Valley SEZ creates a number of market advantages which will provide effective development of residents’ businesses

BENEFITS

Titanium Valley is located in immediate proximity and closely co-operates with the key partner of the project – the VSMPO-AVISMA Corporation

The corporation is the world’s largest manufacturer of titanium, supplier of titanium accessories for such companies as Airbus, Boeing, General Electric, Goodrich, Embraer, Rolls Royce and Safran. The VSMPO-AVISMA Corporation is integrated into the world aerospace industry, and for many companies is the main strategic supplier of titanium products.

Titanium Valley is based in Sverdlovsk region – a large scientific, industrial and infrastructural center of Russia (go to section about the region).
Residents have the opportunity to fit into existing industrial chains of the Sverdlovsk region and its adjoining territories. This allows them to fill the existing free niches of the Sverdlovsk and Urals region markets and provide a sales market for residents’ enterprises.

Market advantages and possibilities of Titanium Valley strengthen economic stimuli and benefits of the special
economic zone.

Economic incentives and preferences

Residents of Titanium Valley SEZ are exempt for 10 years from payments of property tax for organisations, transport tax, land tax; and also from profit tax which should be paid into the regional budget for 10 years after receiving their first profit liable to taxation. As for profit taxation, Titanium Valley is the most attractive of all other SEZs in the Russian Federation (give more details about tax preferences).
Furthermore, for SEZ residents, special tariffs exist for gas, electric energy, heating, water supply and sewerage, and also for the cost of rent and land redemption.
For SEZ resident enterprises, protection against adverse changes in Russian Federation Law on taxes and levies is guaranteed during the whole period of validity of the special economic zone (49 years).

On the territory of a special economic zone, the customs procedure of a “free customs zone” (further – FCZ) shall apply.

On application of the “free customs zone” in relation of goods imported to the SEZ territory (equipment, raw materials, accessories, construction materials), the resident shall not pay import customs duties or value-added tax.

Titanium Valley SEZ OJSC, together with Verkhnaya Salda customs provides support in explanation of the customs law and the use of the free customs zone procedure.

CONDITIONS FOR CONSTRUCTION AND MAINTENANCE

provided with all necessary infrastructure (engineering, transport, business, social)

Connection to the engineering infrastructure of the special economic zone is FREE OF CHARGE

rent:
max.: 35 856.00 RUR/ha
min.: 17 928.00 RUR/ha
redemption:
125 496.00 RUR/ha
7% of cadastral value
cadastral
value
1 792 800.00 RUR/ha

The maximum simplification of administrative procedures at all stages of the resident’s activity at interaction with public authorities and local government.
The “single window” system allows quick and efficient solution of issues connected with construction and current industrial activities.

Using special Titanium Valley SEZ preferences allows a reduction of up to 30-40% of costs of location of economic activities as compared to expenses for construction on sites other than the special economic zone.
   
                                                                                                                                                                                                                                                                                                                                          

Algorithm for receiving SEZ resident status

  1. Making an Agreement of Intentions between the “Titanium Valley SEZ” and the Company, with enclosure of the Project Passport of the potential SEZ resident
  2. Developing a business plan according to criteria of the RF Ministry of Economic Development
  3. Defense of the business plan at a session of the Supervisory Board
  4. Registration of the legal entity on the territory of the Verkhnaya Salda urban district
  5. Applying (with a full package of project documents) to make the agreement on establishment of the activity to the Ministry of Economic Development of the Russian Federation on behalf of the new legal entity
  6. Defense of the project at the Advisory Council of the Ministry of Economic Development of the Russian Federation
  7. Making the agreement for execution of industrial and production activity on the territory of the SEZ

Savings Calculator

year 0 year 1 year 2 year 3 year 4 year 5 year 6 year7 year 8 year 9 year 10
Capital investments,
MRUR
Balance value of
equipment, MRUR
including imported equipment,
MRUR
Taxable profit,
MRUR
customs rate, %
excise duty rate, %

Required resources

land plot, (ha)
electric energy, (MW)
gas, (cub.m/h)
heating, (Gcal*h)
water, (cub.m/day)

Sverdlovsk region costs, MRUR

year 0 year 1 year 2 year 3 year 4 year 5 year 6 year7 year 8 year 9 year 10
for imported equipment 0 property tax 0 0 0 0 0 0 0 0 0 0
for purchase of land 0 land tax 0 0 0 0 0 0 0 0 0 0
for connection to
technical services
0 profit tax 0 0 0 0 0 0 0 0 0 0

Expenditures for SEZ, MRUR

year 0 year 1 year 2 year 3 year 4 year 5 year 6 year7 year 8 year 9 year 10
for imported equipment 0 property tax 0 0 0 0 0 0 0 0 0 0
for purchase of land -- land tax 0 0 0 0 0 0 0 0 0 0
for connection to
technical services
0.05 profit tax 0 0 0 0 0 0 0 0 0 0
SAVINGS in SEZ, MRUR 0 0 0 0 0 0 0 0 0 0 0
TOTAL 0


                                                                                                                                                                                                                                                                                                                                               

Information for investors