Yakutia: Land of Mammoth Opportunities

Yakutia: Land of Mammoth OpportunitiesBy Marina Dessiatkina

Trade Commission of the Republic of Sakha (Yakutia)March 8, 2010

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QUICK FACTS:

Trade Commission of the Republic of Sakha (Yakutia)

3.1 million. sq. kilometers40% of its territory located in Arctic CircleOne of the richest regions for mineral resources in Russia and worldwide

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Diamonds – 82%

Gold – 17%

Uranium – 61%

Antimony – 82%

Iron ore – 5%

Coal – 5%

Tin – 28%

Mercury – 8%

Sakha Republic’s share in total mineral reserves

of the Russian Federation


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Importance of the mining industryfor the region’s economy


80% of all region’s industry activities;

68% of all industrial jobs and 18% of all jobs in the region;

57% of all regional taxes appropriated for the federal budget;

67% of all capital investments in the Sakha Republic’s economy;

18,4% of total volume of goods sold outside of region

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Foreign investment: considerations checklist

Availability and accessibility of substantial raw mineral and energy reserves;

Strategic location allowing convenient reach for Asia Pacific markets;

Presence of companies conducting their exploration, mining and export activities successfully

Preparedness of the local government for constructive dialogue with foreign investors;

Regional and federal law on foreign investments: recent developments


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Foreign Investment Act of the Republic of Sakha (Yakutia)Dated: December 22, 1992 (reference № 1270-XH)

• Foreign investments are fully and implicitly protected on the territory of the Republic of Sakha;

• Rights to freely re-invest and export - all forms of revenue• First 10 years - guaranteed conditions existed for the

moment of registration;• Guarantee doesn’t cover for federal law changes: customs

rules, taxation regulations, credit and finance, and anti-monopoly law;

• It doesn’t provide for economic security, environmental protection, public order, and local health care;

• Within given power, the public administration of the Republic of Sakha (Yakutia) and local governments can provide additional guarantees.


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Act on Foreign Investment Activities in the Republic of Sakha (Yakutia) dated by May 30, 2006 (reference 347-3 № 709-Ш)

Establishes tax benefits and offers investment tax credits; Provides for a wide range of government support to:

Encourage equity market developments, Promote financial leasing

Offers government fiscal guarantees and funds allocation to investment projects on a competitive basis;

Introduces a list of tax benefits in reference to: Corporate income tax, – no more than 4% of fixed tax rate, - the portion

to be attributed to the Republic’s budget; Corporate property tax, - in particular reference to all forms of property

to support an investment project, and/or equipment or part of the equipment bound by leasing contract;

Corporate tax on transport vehicles acquired to serve the investment project, passenger cars excluded.

Total sum of tax benefits shouldn’t exceed total sum of the investment.


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Procedures for Foreign Investments in Business Entities of Strategic Importance for Russian National Defense and State Security, a.k.a Federal Law № 57-FZ, dated by April 29, 2008

Source: http://www.fas.gov.ru/english/legislation/20300.shtml


THANK YOU!

Contact Information:

Marina DessiatkinaTrade Commission of the Republic of Sakha (Yakutia)

1-200 North Service Rd. WUnit 375

Oakville, Ontario L6M 2Y1Canada

Phone: 905-847-8006Cell: 905-334-4966

E-mail: [email protected]

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Yakutia: Land of Mammoth Opportunities