New free economic zones in Russia

The State Duma has passed in the first reading a bill on the creation of new economic zones in the Belgorod, Kursk and Bryansk regions.

Entrepreneurs will receive the same privileges as in the Donetsk and Lugansk People’s Republics, Zaporozhye and Kherson regions. The Russian Ministry of Economic Development will be responsible for managing this favoured regime and assessing its effectiveness.

The law on the creation of a free economic zone in the new regions came into force in the summer of 2023. Thanks to it, entrepreneurs can take advantage of several preferences:

• reduced insurance premiums (7.6 per cent);
• zero rate of profit tax from the investment project.

Additionally, businesses are exempt from property tax, excise duty on liquid steel and Mineral Extraction Tax for coal and iron ore. The region is distinguished by a free customs trade regime and exemption from site tax for three years.

The FEZ is due to become operational at the end of August 2024. Separately, a free customs zone procedure will be available for free economic zones.