The media inform us that Crimea and Sevastopol for a quarter century have become an "economic paradise" for entrepreneurs. This is due to the introduction of a free economic zone in Crimea. What economic benefits does it promise investors and businessmen? What benefits does it mean? We will analyze these issues in the material.
What is it?
A special (free) economic zone in the Crimea is the introduction of incentives for investors and entrepreneurs in the territory of this republic. Formed by the Government of the Russian Federation in a desire to help develop local business. This contributes to its reorientation from Ukrainian to Russian laws. Privileges and preferences will attract additional investments to the territory of the republic, will contribute to the development of business of new forms and qualities.
SEZ is also some compensation for political risks associated with the imposition of sanctions against Russia by Western countries. Indeed, new attractive conditions will attract not only domestic, but also foreign entrepreneurs to the territory of the republic.
Pluses of investors
The free economic zone in Crimea attracts investors with a number of attractive conditions. Among these benefits and preferences, we highlight the following:
- The absence of a tax rate on property of organizations for a 10-year period.
- In the first three years of the organization’s activities, the maximum income tax is only 2%.
- In 2015-2016 The republic had a simplified tax system (abbreviation - USN). The rate on it was 0%! Today it has increased to 4% (until 2021).
- A number of benefits in the field of insurance premiums. For a decade, insurance contributions from wages are deducted at a rate of 7.6%.
All these conditions are provided for both Russian and foreign companies and entrepreneurs. But it is worth noting that the mechanisms of work of the SEZ in the Crimean Republic are so far “raw” because of their novelty. Therefore, it is possible that additional legal and regulatory acts will be adopted to optimize them.
How to start activity in the Crimean free economic zone?
If you want to develop your business in the free economic zone of Crimea, then first of all you should get acquainted with the Federal Law No. 377 (2014) - "On the Development of the Crimean Federal District and Free Economic Zone in the Crimea and Sevastopol."
If a businessman decides to become a member of the SEZ here, he must have a certificate of a registered individual entrepreneur or legal entity that must be registered with the tax authorities in the Republic of Crimea. Additionally, he should have an investment declaration, which confirms the desire to implement the investment project in the Crimea.
Russian law does not impose any restrictions on the organizational form of legal entities and individual entrepreneurs wishing to join FEZ participants.
In fact, there are only two conditions for entering the Crimean SEZ: registration of an individual entrepreneur or legal entity in Crimea (including in Sevastopol) and an investment project. There is one condition for the latter - the amount of capital investments in the first three years should not be lower than 3 million rubles.
However, there is one exception to the rule: representative offices and branches cannot enter the FEZ, since they are not independent jurisdictions. persons.
Obtaining resident status
To become a resident of the free economic zone in the Republic of Crimea, it is enough to follow this algorithm:
- Register an individual entrepreneur, enterprise or legal entity in one of the settlements of the Crimean Republic.
- Register with the tax authority.
- Submit a written application to the Republican Council of Ministers on the conclusion of a document on the conditions of activity in the zone. If the activity of an entrepreneur or jur. If a person is carried out in Sevastopol, it is necessary to apply to the Legislative Assembly of this city.
- In addition to the application, you need to attach a set of documentation: copies of constituent papers for a legal entity, a copy of the certificate that you are registered with the tax authorities, a copy of the registration certificate of legal entities. person or individual entrepreneur, investment declaration (ID) filled in according to a special template.
- It is important to fill in the ID correctly, according to the requirements that are listed in Federal Law No. 377. In particular, the following information is indicated: the type of commercial activity, the main objectives of the investment, a detailed feasibility study (number of jobs, average salary, etc.), the volume of investments under the project (transferred for the first three years), the schedule for capital investments drawn up for the year, the plan for the implementation of the project in the Crimean Republic.
- Waiting for a decision by executive state authorities. An important aspect: if the amount of capital investment does not exceed 100 million rubles, then the case is considered by the highest executive body of the Crimea or Sevastopol. All applications have a 7-day waiting period for a response from the authorities.
- If the amount of capital investment exceeds 100 million rubles, then the application is sent for consideration to a special body - the expert council. The waiting period here is the same - 7 days. This function is performed by the relevant state authorities in the republic. Within 15 days, the board analyzes the application. He may also oblige the applicant to make the necessary changes to the declaration.
- Conclusion of an agreement on the conditions of activity in the SEZ. The applicant is included in the membership of free economic zones in the Crimea and Sevastopol.
- Obtaining an IP or a legal entity a certificate certifying that it is a participant in the FEZ. From this moment, the businessman has the right to carry out his activities in special economic conditions.
Preferential taxation
The history of the formation of the Free Economic Zone in Crimea (Federal Law No. 377) is associated with the approval of two types of tax benefits. This is the following:
- General benefits for individual entrepreneurs and other organizations operating in the territory of Sevastopol and Crimea.
- Benefits for residents of the SEZ.
As for residents, according to the law on the free economic zone in Crimea, the following conditions are introduced for them:
- Reduced corporate income tax rates. In respect of fixed assets, an increased depreciation coefficient is applied.
- Corporate property tax. For 10 years, it is zero.
- Value added tax. In the event that the goods undergo customs procedures within the boundaries of the free customs zone, preferential taxation is introduced for residents.
- Land tax. During the first 3 years of activity, residents do not pay it.
- Significant reduction in insurance premiums. Their total size during the first 10 years of activity is 7.6%.
Income tax
The most interesting fact for the participants of the free economic zone in Crimea is a reduced income tax. This is considered the most tangible benefit in the modern world.
The conditions are simple: from the moment of receiving the first income from their activities, participants in the FEZ will not deduct taxes to the federal budget for 10 years.
But for those taxes that already go to the regional budget, a reduced tax rate applies. What is its size? It is already directly established by the state power of Sevastopol and the Crimea - the legislation establishes such a right for it. However, the Federal Law introduces a restriction on its maximum size.
Here's how the above looks in numbers:
- The first three years of their activity, residents pay a 2% profit tax to the regional budget.
- The fourth or eighth year of activity is 6%.
- From the ninth year of activity - 13.5%.
Property tax
Businessmen will always have certain property on their balance sheet. What benefits does the Federal Law on the Free Economic Zone in Crimea introduce here?
The tax rate on property of organizations is zero. However, for this it is necessary to observe one condition for this property: it must be created, purchased only for activities within the boundaries of the SEZ. Accordingly, it is located on the territory of the republic.
Residents do not pay this tax for 10 years. The period is counted from the month when the specified property was taken to the account of the organization.
Land tax
Taxation in the free economic zone of Crimea in this area can also boast of benefits. The land must necessarily be located in the territory of Sevastopol or Crimea, and its purpose - to comply with the goals of the business specified in the contract.
The tax exemption is granted to a resident from the moment when this section is assigned to him. It must be acquired by the FEZ participant.
Insurance payments
The size of insurance premiums for the SEZ is significantly reduced. As we have said, this is 7.6%. Such their level will be maintained over the 10th anniversary.
But it is important to keep in mind one condition: the privilege is prescribed only for those participants in the free economic zone who have signed an agreement on participation in the FEZ no later than 3 years from the date of its creation in Crimea.
What is a free economic zone in the Crimean republic? These are significant benefits for businessmen and investors. The SEZ was introduced in Crimea to develop local business and attract domestic and foreign companies to the republic. It is important to emphasize that the receipt of each benefit is the observance of special conditions that we noted.