Investment Guide to the Republic of Bashkortostan
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Investment Guide to the Republic of Bashkortostan Ufa, 2014 With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and deep local expertise to help clients succeed wherever they operate. About 200,000 professionals of Deloitte in the region are committed to becoming the standard of excellence. Deloitte CIS is one of the leading international professional services firms that offers audit, consulting, corporate finance, enterprise risk, and tax and legal services leveraging professional experience of approximately 2,500 employees in 18 offices of 11 countries across the region. Today, Deloitte has offices in Moscow, St. Petersburg, Ufa, Yekaterinburg and Yuzhno-Sakhalinsk in Russia, Kyiv in Ukraine, Minsk in Belarus, Tbilisi in Georgia, Baku in Azerbaijan, Aktau, Almaty, Astana and Atyrau in Kazakhstan, Bishkek in Kyrgyzstan, Tashkent in Uzbekistan, Dushanbe in Tajikistan, Ashgabat in Turkmenistan and Yerevan in Armenia. This Investment Guide has been prepared in conjunction with the Ministry of Economic Development of the Republic of Bashkortostan and the Bashkortostan Investment Promotion Agency. This publication contains information of a general nature only. Neither Deloitte Touche Tohmatsu Limited nor any Deloitte member firm are rendering accounting, business, financial, investment, legal, tax, or other professional advice or services by means of this publication. You should consult a qualified, professional adviser before taking any decision or action on the basis of this investment guide that may affect your business. Deloitte Touche Tohmatsu Limited, its affiliates and its associates will not be liable for any damages resulting from the use of or reliance on this publication. 2 Contents Greetings from President Rustem Khamitov of the Republic of Bashkortostan 4 A message from David Owen 5 Bashkortostan Investment Promotion Agency 6 Investment activity in the region 7 Competitive advantages of the Republic of Bashkortostan 8 Technology and industrial parks 12 Innovation support infrastructure 13 Banking system 14 State support to investors in the Republic of Bashkortostan 15 How to qualify for state support 16 Obtaining state support 17 Export support and Public Private Partnership development 18 High-priority areas for development 19 2015 SCO and BRICS Summits 30 Development institutes in the Republic of Bashkortostan 31 Summary of statistics on the social and economic position of the Republic of Bashkortostan 32 Contacts 34 Investment Guide to the Republic of Bashkortostan 3 Greetings from President Rustem Khamitov of the Republic of Bashkortostan Dear friends, I am glad to welcome you to this year’s edition The Republic boasts a combination of a great investment of the Investment Guide to the Republic potential, economic security, financial transparency, of Bashkortostan! and the status of a good borrower, as is annually confirmed by leading international and Russian rating From an economic point of view, our Republic is one agencies. All of these advantages have combined of the strongest regions in Russia. Our industrial to cement our reputation as a reliable business partner output is growing at a higher annual rate than in the investment and banking community, and help the Russian average. The cornerstones of our industrial to broaden our range of potential creditors. strength are the oil production, petrochemical, engineering and agricultural sectors. The Republic The environment in the Republic, especially the legal has a number of competitive advantages, as well framework, has been built to provide maximum as significant potential to host new production facilities benefits to investors of all kinds. Recent legislation and implement investment projects in any area in the Republic offers special preferences for investors. and of any scale. We constantly strive to ensure that all procedures remain transparent and to mitigate all possible risks. Bashkortostan benefits from an advantageous location, It has proven worthwhile – in the last three years abundant natural resources, a well-developed industrial alone more than 600 billion rubles of investments have and infrastructural base and strong scientific research been brought into the regional economy, with foreign and human potential. Railway, pipeline and road investment exceeding 1.2 billion dollars. networks pass through Bashkortostan as they connect the European part of the country with the Urals and I am confident that this Guide will be extremely useful Siberia. The transport sector is responsible for both to you in developing your business in the Republic. internal and transit freight and passenger carriage. Bashkortostan is open to dialogue and mutually We are in the process of developing trade and economic favourable partnership, and we are pleased to invite ties with all regions of Russia and more than one you to cooperate! hundred other countries. President of the Republic of Bashkortostan Rustem Khamitov 4 A message from David Owen We are glad to present the second edition Work is underway to establish shared access centres of the Investment Guide, which goes into detail to high-tech equipment for low-tonnage petrochemical on the competitive advantages and investment priorities and radio-electronics clusters, as well as a regional of the Republic of Bashkortostan and measures in place biotechnology engineering centre and a youth to provide state support to investment activity. innovation creativity centre. The Republic of Bashkortostan is one of the leading As part of preparation for Shanghai Cooperation regions of the Russian Federation in terms of its high Organisation and BRICS summits scheduled for 2015 level of social and economic development. As well in Ufa, modern international-class hotels are being built, as the development of traditional industry sectors, the local infrastructure is undergoing modernisation the government of the Republic has prioritised and several of the city’s key social and cultural a transition to an innovative economic development landmarks are undergoing large-scale reconstruction. model. The effective legislation of the Republic of Bashkortostan includes the provision of financial We hope that this Investment Guide to the Republic and non-financial government support measures of Bashkortostan will be a useful source of information to investors who fulfil certain conditions. for investors and for all who see the significant potential of the region for the completion of own projects. All of the necessary infrastructure has been introduced to establish an innovative economic model in the Republic, including technology and industrial Yours sincerely, parks, business incubator zones, technology transfer centres, investment funds and industrial and technology David Owen centres for small businesses. Managing Partner, Deloitte CIS Investment Guide to the Republic of Bashkortostan 5 Bashkortostan Investment Promotion Agency The objectives of the Agency are: • to seek and attract Russian and foreign investors in order to implement investment projects in the Republic of Bashkortostan • to promote the region in the foreign and domestic economic markets and to boost territorial marketing The Bashkortostan Investment Promotion Agency, a state autonomous institution of the Republic • to ensure a simplified procedure for investors to facilitate of Bashkortostan, was established to increase the appeal communication with the Republic’s executive bodies of the Republic of Bashkortostan from an investment point of view. • to participate in the support of investment projects by means of public-private partnerships • to facilitate concession-based implementation of investment projects • to facilitate the establishment of project teams aimed at implementing and supporting turnkey target investment projects • to cooperate with the local authorities of the Republic of Bashkortostan with respect to supporting investment projects implemented in the region’s municipal units. Office 450, 82 Chernyshevsky St., Ufa, 450076 Republic of Bashkortostan, Russian Federation Tel: +7 (347) 216 34 59 E-mail: [email protected] http://invest.bashkortostan.ru/ Investment Map of the Republic of Bashkortostan http://map.bashkortostan.ru/ 6 Investment activity in the region 14.6% 12.0% 24.4% 8.2% 6.4% 7.1% Investment in fixed Foreign investment assets by type of by type of economic economic activity activity 18.1% 20.8% 57.5% Manufacturing Manufacturing Transport and communication Healthcare and social services Mining Transactions with real estate, Transactions with real estate, rent and services rent and services Agriculture, hunting and forestry Other 17.2% 3.1% Highest share Foreign in the structure investment of foreign by source investment 79.7% Private equity Cyprus 40.8% USA 2.0% Trade and other credit Germany 19.6% Republic of Korea 1.7% Portfolio investment Netherlands 17.7% Sweden 1.6% Austria 12.6% Other countries 4.0% Investment Guide to the Republic of Bashkortostan 7 Competitive advantages of the Republic of Bashkortostan The Republic of Bashkortostan is appealing to investors and has a confirmed stable financial position. BBB–: “Negative” outlook 2B: Overall rating (medium potential, moderate risk) Moody's th 10 Based on investment potential Baa3: “Stable” outlook th (one point higher than in 2012) 19 Based on investment risk Top 5 Russian regions with minimum nd economic risk 2 Ufa's ranking in the Top 30 Cities to Do Business rating in 2013 (First place among cities with more