Saint Petersburg Investor’s Guide 2018 Yaroslavl Moscow Kazan Samara Voronezh Volgograd #THE_NIZHNY_NOVGOROD_REGION 04 Welcoming address of the Investor’s Guide Investor’s Head of the Nizhny Novgorod Region Gleb Nikitin 10 INVESTMENT OPPORTUNITIES 05 General Information Opening remarks of 10 about the Nizhny General Director of Novgorod Region JSC Nizhny Novgorod Region Development Corporation 12 Area for Investments Timur Khalitov 14 Industrial Potential 06 16 Automotive Industry Address of Managing Partner, 20 Chemical industry KPMG in Russia and CIS, Oleg Goshchansky 25 Agriculture 32 Shipbuilding 35 Timber Industry 08 Six reasons to choose the Nizhny Novgorod Region Table of Contents Table 38 64 Region Novgorod The Nizhny INFRASTRUCTURE COMFORTABLE AND COMPETENCES ENVIRONMENT 38 Transport Infrastructure 43 Information Technologies 70 General Information about KPMG 46 Education and Science 48 Investment Infrastructure 72 Contact details 52 GOVERNMENT AND BUSINESS Business support 52 measures Nizhny Novgorod Region 59 Development Corporation 62 Public-Private Partnership 4 Investor’s Guide Investor’s Head of the Nizhny Novgorod Region Gleb Nikitin Dear friends, The Nizhny Novgorod Region is one of the most rapidly developing regions of our country. It enjoys an exceptional geographical location and can draw on extensive industrial, scientific and manpower resources. The growing interest of business in implementing large-scale projects in the Nizhny Novgorod Region demonstrates the region’s vast potential. Our region is located in the very heart of the Volga Region at the crossroads of major transport corridors, which translates into logistical benefits and a proximity to sales markets. That is why a number of world-famous companies are already doing business in the Nizhny Novgorod Region today. At present the Nizhny Novgorod Region is a region which values serious investors and is eager to minimize their risks. The Government of the Nizhny Novgorod Region continues developing the investment infrastructure and is doing it’s best to provide the best workingenvironment for investors. There’s a whole range of sites to launch production available in the region, a system of technoparks and business incubators, more than 20 educational resource centres where specialists in all areas can be trained, and also legislative incentives for business. We established the Nizhny Novgorod Region Development Corporation to ensure effective work with investors. I am convinced that your business will be able to make a quantum leap in the Nizhny Novgorod Region with minimum risks and maximum opportunities! I wish you every success! Gleb Nikitin Head of the Nizhny Novgorod Region Chairman of the Government Welcome Address Welcome 5 General Director of JSC Nizhny Novgorod Region Development Region Novgorod The Nizhny Corporation Timur Khalitov Dear colleagues, Today the Nizhny Novgorod Region is one of Russian most advanced and fastest growing regions with great potential for the development of investments. Thanks to one of the most developed multifunctional industrial complexes in the country, investors will be able to find the suppliers and partners they need in our region, thereby increasing the economic viability of the projects they are implementing. At the same time, the region’s location at the crossroads of the country’s main highways and railways, from north to south and from west to east, provides ideal conditions for logistics. Our advantages include the most acclaimed system of resource centres in Russia, facilitating the training of highly skilled professionals for any industry, a developed infrastructure, a trust-based dialogue with the Government, proximity to the largest sales markets, and regional legislation that fully complies with investor’s requirements. A specialised organisation was created in the region to facilitate interaction between the authorities and the investor according to the one-window system – the Nizhny Novgorod Region Development Corporation. The Corporation assists investors at every stage of implementation of their investment projects and helps them to create the requisite business infrastructure. We take account of the requests of the business community and work every day to improve our support measures. Our goal is to create the best possible environment for investments in the region. Remarks Welcome to the Nizhny Novgorod Region! Timur Khalitov General Director of JSC Nizhny Novgorod Region Development Corporation Opening 6 Managing Partner, Investor’s Guide Investor’s KPMG in Russia and the CIS, Oleg Goshchansky Dear colleagues, We are pleased to present you this Investor’s Guide on the Nizhny Novgorod Region. Today, this region ranks first in the Volga Federal District (VFD) in terms of foreign direct investments. The Nizhny Novgorod Region has a great deal to offer: a favourable geographic location, developed transport infrastructure, enabling legislation, skilled staff, high research and development potential, and, most importantly, a regional leadership that is willing to build truly effective relations with investors based on real action and not mere words. As someone who has worked for many years with both Russian and international businesses, I am well aware of the attention paid to the selection of a site for investment projects. This decision is always based on a thorough examination of all the information available and a comprehensive assessment of risks. I hope that the booklet you are holding in your hands will provide a good starting point for your consideration of the opportunities offered by the Nizhny Novgorod Region. Good luck! Oleg Goshchansky Managing Partner KPMG in Russia and the CIS Address The Nizhny Novgorod Region Novgorod The Nizhny 7 8 to choose the Investor’s Guide Investor’s Nizhny Novgorod Region The Region’s strong industrial potential 1 and highly diversified economy: — Increase in the localisation of components in the automotive and shipbuilding industries (the current level of use of imported components varies from 50% to 80%, depending on the models)*; — Development of uncultivated arable land (around 10%); satisfaction of both internal demand and the demand of neighbouring regions for agricultural products (import substitution potential of meat and fruit of approx. 50%); — Favourable environment for the development of pharmaceutical businesses and also the establishment of fine organic synthesis reasons production facilities due to the region’s high level of research potential and highly skilled employees, as well as available sites that meet all the necessary environmental standards. Strategically advantageous 2 geographic location The Nizhny Novgorod Region is located at the crossroads of large transport corridors. The construction of the high-speed Moscow-Kazan railway line, with trains operating at an expected maximum speed of 360 km/hour, and a terminal and logistics centre will reduce the cost and duration of carriage from Novorossiysk, Vladivostok, and Saint Petersburg on average by 25% and 55%, respectively. This will enable Nizhny Novgorod to become one of the largest transport hubs in Russia. *According to the Association of Russian Automakers. 9 3 Highly skilled personnel The region has a significant potential of human resources. Each year 23,000 specialists graduate from higher education institutions in the Nizhny Novgorod Region, with 30% of technical skills in Region Novgorod The Nizhny high demand in the region. The average salary in the Nizhny Novgorod Region (RUB 30,500) is lower than in Russia’s other major educational centres (RUB 42,500 in Moscow, Saint Petersburg, Ekaterinburg, Novosibirsk and Tatarstan). This provides investors with a competitive advantage when developing industry in the region. 4 High R&D potential More than 2,500 patents have been registered in the region over the past four years. The region ranks 4th in Russia in the R&D index, and 3rd in terms of the number of cutting-edge production technologies that have been deployed. Investors can leverage the region’s work experience with high-tech and sophisticated production facilities. 5 One of the most investor-friendly regulatory frameworks in Russia The region grants various incentives to investors that have been enshrined in legislation: the lowest possible regional tax rates; guarantees of legislative non-regression provisions for investors and no increase in the tax burden; and a system of financial support measures making it possible to reduce costs substantially on the implementation of investment projects. 6 Comfortable environment The Nizhny Novgorod Region has created all the conditions and infrastructure nec- essary to meet the needs of local residents and enable companies to do business. 10 The Nizhny Novgorod Region Investor’s Guide Investor’s Nizhny Novgorod One of the largest regions in Central Russia Kirov Region in terms of actual area. Nizhny Novgorod Region Republic Perm Territory of Marii El Chuvash Republic Republic of Mordovia Republic of Udmurtia Penza Region Republic of Tatarstan Population Ulyanovsk Region Samara Region 3,235,000 Saratov Region Republic of Bashkortostan rd Orenburg Region 3 in VFD* Population density: 42 people per km2 (compared to average population density in VFD* of 28.6 people per km2) nformation 400 km I 3 hours 35 minutes 45 minutes by train by air General Nizhny Novgorod is 400 km from Moscow *VFD – Volga Federal District 11 The Nizhny Novgorod Region The Nizhny Novgorod Region Novgorod The Nizhny Growing market of the Nizhny Novgorod