www.lenoblinvest.ru Contents

Foreword by the Governor Tax benefits 14 of Leningrad region 3

Industrial parks 15 General information 4 Territory of advanced social and economic Advantages of investing development Pikalevo 16 in Leningrad region 5 Territory of prospective development near commercial Economy 6 seaport of Ust- 17

Industry 8 Success stories 18

Investors support 10 Contacts 22

Front Office for Investor Relations 12 Foreword by the Governor of Leningrad region

Leningrad region strives to be among the We are open for dialogue with potential most successful regions in . In order investors, our rules are simple and clear for to achieve this, the regional government takes business. We maintain transparent conditions for specific steps aimed at attraction of investments successful business established in the region. and support for entrepreneurial initiatives. Since 2013 the Front Office for Investor Relations Our region is one of the leaders of the Administration of Leningrad Region has of Northwestern Federal District in terms been working for comfortable interaction with of economic development and one of the investors and investment projects support largest industrial centres in Russia. Due to its on “one-stop-shop” principle significantly contributing unique geographical location and diversified to improvement of investment attractiveness of the economy the region is progressively increasing region. the volume of shipped industrial products. Due to concerted efforts of the team One of the most important priorities defined of Leningrad region we move forward and make in Socio-Economic Development Strategy the region attractive not only for Russian, but also of Leningrad Region up to 2030 is industrial for foreign investors. And this is proved by the fact leadership. In order to enter top ten most that in 2019 the Ministry of Economic Development industrialized regions in the country, Leningrad of the Russian Federation declared Leningrad region creates industrial parks for localization region the leader among other regions in terms of new enterprises, provides tax benefits and of the quality of its investment policy and efficiency preferences for manufacturers who are ready of its management team. to go forward, construct, expand. Welcome to the territory of successful investments! Alexander Drozdenko

Investor’s guide to Leningrad region 3 General information Murmansk (1,106 km) Borders with the European Union ( and Estonia) Arkhangelsk (878 km)

Access to the (through the ) Lake Helsinki LENINGRAD Ladoga (246 km) REGION Oslo (1,165 km) Close proximity to Baltic Sea (284 km) Stockholm Saint Petersburg (663 km)

Moscow 4 seaports (598 km)

Minsk (647 km) Berlin Pulkovo International Airport (1,593 km) (located in Saint Petersburg)

Paris (2,612 km)

83.9 1.8 971 Rome thousand km² million people thousand people Madrid (2,814 km) total area population human resources (3,884 km)

4 Investor’s guide to Leningrad region Advantages of investing Murmansk (1,106 km) in Leningrad region

Arkhangelsk (878 km) Efficient support measures for investors Favourable geographical location The Ministry of Economic Development of the Leningrad region has borders with Saint Petersburg – Russian Federation declared Leningrad region the the second largest city in Russia, with the European Helsinki LENINGRAD (246 km) REGION leader among other regions in terms of the quality Union (Finland, Estonia), is located only 600 km away Oslo of its investment policy and efficiency of its from – the largest city in Russia (1,165 km) Tallinn management team (284 km) Stockholm Saint Petersburg (663 km) Transport accessibility Second largest market in Russia

Moscow (598 km) Leningrad region is the second largest Leningrad region together with Saint Petersburg transport and logistics hub in Russia located is the second largest consumer market in Russia Minsk (647 km) at the intersection of international transport with high purchasing power. The population Berlin corridors which allows carrying out multimodal of Leningrad region together with Saint Petersburg (1,593 km) transportations including marine transportations is 7.2 million people through the largest port in the Baltic Sea – Paris Ust-Luga (2,612 km) Access to skilled labour force Leningrad region is the second largest labour Rome market in – labour force of the Madrid (2,814 km) (3,884 km) region is about 1 million people

Investor’s guide to Leningrad region 5 Economy

Structure of gross regional product in 2017 Ratings

36.3% 7.6% 1th place in the ranking of the quality Industry Real estate of investment policy in the regions transactions Ministry of Economic 13.7% Development Transport and 4.7% communications Agriculture 12% 15.4% 12th place in the National Regional Wholesale Other Investment Climate Ranking and retail trade (+8 positions in comparison with 2017) 10.3% Construction

4th place among Russian regions with the lowest investment risk, RAEX (Expert RA) GRP dynamics, RUB billion 56% GRP growth in 1,060* 2013-2018* Standard & Poor’s 965.8 BB+, forecast “Stable”: long-term credit rating 916.4 849.6 535.7 th 703.3 thousand RUB 5 place in the ranking of the regions 678.7 GRP per capita in 2017 in terms of achievement of high rates Ministry of Economic of increasing economic (tax) potential Development 2013 2014 2015 2016 2017 2018 *according to estimates of a territory

6 Investor’s guide to Leningrad region Structure of investments Investments, billion RUB share of investments 44% in GRP of the region 466.9

338.6 45% 9.8% 264.2 Transportation Real estate 253.6 225.9 466.9 and storage transactions billion RUB 178.8 15.1% 4% Manufacturing industries Construction

14.2% 11.9% 2013 2014 2015 2016 2017 2018 Power industry Other

Foreign direct investment, billion USD

th +26.8% place among all growth of investments 8 5.8 5.3 Russian regions 4.7 in the regional economy 4.1 in comparison with 2017 3.8 3.4

billion USD th 4.1 place among volume of foreign direct 6 all Russian regions investment over 9 months 2013 2014 2015 2016 2017 over 9 months of 2018 of 2018

Investor’s guide to Leningrad region 7 Industry

50 Population (thousand people) Leningrad region is one of the largest industrial centres in Russia Manufacture of food products, including beverages and tobacco Textile and clothing manufacturing Timber processing and manufacturing of wooden goods SHIPYARD Pulp and paper production

28 Production of coke and 61 29 3RGSRUR]KVN\ oil products 3ULR]HUVN\ /RGH\QRSROVN\ 200 Chemicals industry 9\ERUJVN\ 399

9VHYROR]KVN\ Production of rubber and plastic goods 68 70 89 Metalworking production 6RVQRYRERUVN\ 7LNKYLQVN\ 106 9RONKRYVN\ /RPRQRVRYVN\ Production of other non-metallic .LURYVN\ 49 mineral commodities 73 62 128 %RNVLWRJRUVN\ 76 .LULVKVN\ Production of machines 7RVQHQVN\ .LQJLVHSSVN\ and equipment 52 9RORVRYVN\ 243 Production of vehicles *DWFKLQVN\ and equipment 42 72 6ODQWVHYVN\ Mining /X]KVN\

Production and distribution of electricity

Production of electric, electronic and optical equipment

8 Investor’s guide to Leningrad region th The region occupies the 17 place among all subjects of the Russian Federation in terms of the volume of industrial production PRIORITY DEVELOPMENT AREAS OF LENINGRAD REGION: Industry is the base Share of industry in GRP of the regional 36.3% economy Oil, gas and Construction chemical industry complex 1.2 trillion rubles Growth of the total volume of locally value of export from produced and shipped 2017 to 2018 Automotive Food industry industry goods in 2018 26%

Timber industry Mechanical complex engineering

Energy complex Shipbuilding 104.9% > 500 > 140 industrial production active small, thousand people Metallurgical industry index in 2018 medium-sized work at enterprises in comparison and large industrial with 2017 enterprises

Investor’s guide to Leningrad region 9 Investors support

Front Office for Investor Industry Development Fund for Support of Entrepreneurship Relations of the Administration Centre of Leningrad Region and Industry of Leningrad Region, of Leningrad Region Microcredit Company

Informational and consulting Support for enterprises in expansion Loans for implementation of projects support concerning of already existing and creation within the programmes: implementation of investment of new production plants by “Development projects” projects means of implementation of joint projects on the basis of industrial Dealing with issues concerning “Component parts” cooperation development of infrastructure and Depending on the sector loan amount provision of communications The main directions of work: is from 20 to 100 million rubles, loan development оf industrial term – from 1% to 5% Search and provision cooperation, creation and of information to investors about development of clusters, export investment sites according support, provision of personnel for to requirements of projects industry

10 Investor’s guide to Leningrad region Investors support

Investment portal Information system Investment of Leningrad region Development Industrial parks and social media of Leningrad Region

Up-to-date and relevant information Interactive map map.lenoblinvest.ru: Leningrad region supports about economic development establishment and operation available investment sites of the region and measures of industrial parks in order to of government support industrial parks increase the level of localization of production and to develop Investment portal www.lenoblinvest.ru is available transport and engineering scientific and technological in 4 languages (Russian, English, infrastructure competences German, Chinese) greenfield and brownfield zones Today 28 state-owned and private Investors have an opportunity industrial parks are being created to apply for investment project or already operate in the region support online Social media – the main mouthpiece of the region for business: Investor’s guide to Leningrad region 11 lenoblinvest Front Office for Investor Relations of the Administration of Leningrad Region

Investors support under “one-stop-shop” principle

Creation of conditions for successful implementation of investment projects

Establishment of constructive dialogue with business

TODAY THE FRONT OFFICE PROVIDES SUPPORT TO

including 284 40 projects investment with foreign projects investment

12 Investor’s guide to Leningrad region Selection of investment Provision of engineering Informational and sites according to the and transport support: consulting support: requirements of projects:

Information about investment Search and provision Analysis of the possibility advantages of the region of information about a site to provide a land plot with engineering and transport Information about measures Analysis of compliance infrastructure of government support of territorial planning documents to a project Assistance in interaction Other information required with resource supplying for implementation Organization of visits organizations of investment projects to investment site Information about strategies and development plans, tariffs and other information

Investor’s guide to Leningrad region 13 Tax benefits

In order to attract investments in the Leningrad region adopted a regional law which establishes tax benefits and regional economy, Leningrad region conditions for their use by the participants of special investment contracts adopted a law which guarantees concluded on behalf of the Russian Federation (only three-sided SPIC). provision of the following tax benefits for investors: According to this law the Regional part of corporate following tax exemptions are income tax is reduced to 13.5% provided:

Investor Reduction of the regional Corporate property part of corporate income tax is reduced to 0% tax to 5%

Reduction of the federal for 4 – 6 years part of corporate income benefits are granted tax to 0% (up to 8 years for automotive Leningrad SPIC Russian manufacturers)* Region Federation Reduction of corporate property tax to 0% 300 million RUB billion RUB years – period of granting minimum volume volume benefits (up to 2025 for of investments of investments corporate income tax) * for corporate income tax not later than 31.12.2022 50 10

14 Investor’s guide to Leningrad region Industrial parks

There are about 250 investment sites which differ industrial parks in terms of available engineering infrastructure. 28 in Leningrad region Information about industrial parks is included in the integrated regional information system Investment Development of Leningrad Region (map.lenoblinvest.ru). 10 Already operating Leningrad region provides the following measures 14 of support for industrial parks: Under construction

4 Planned parks Reduction of corporate income tax to 13.5% (regional part)

25 Reduction of corporate property tax to 0% Private parks

3 Rent reduction for land plots in regional State-owned parks property and unrestricted property: (Pikalevo, , Nanopark 1st-2nd years – 30% of the annual rent, ) 3rd-5th years – 60%, 6th-8th years – 90%

Investor’s guide to Leningrad region 15 Territory of advanced social and economic development Pikalevo Information about Requirements the territory: to an investment project:

Established by a Decree of the 25% of foreign Saint Petersburg Russian Government in 2018 labour force Pikalevo

10 years period jobs of operation From 10

100,000 people Pikalevo Boksitogorsk: 25 km labour potential From 2.5 million rubles Pikalevo Tikhvin: 40 km Pikalevo (Pikalevo, Boksitogorsk, Tikhvin) Saint Petersburg: 244 km

Taxes and payments First 5 years Next 5 years Industry specialisation: Crop production, Wood processing, Corporate property (instead of 2.2) (instead of 2.2) animal husbandry production of paper, furniture, wood Corporate income Extraction of sand, (instead of 17) (instead of 17) products regional part clay, stone Corporate income (instead of 3) Production of food Printing industry, federal part and beverages chemistry Production of textile Land value tax (instead of 1.5) Production of metal, and leather rubber, plastic and products, clothes other finished goods Payments to (instead of 30.2) extra-budgetary funds

16 Investor’s guide to Leningrad region Territory of prospective development near commercial seaport of Ust-Luga

The seaport of Ust-Luga is located at the border with the European Union, it is the largest port in the Baltic Sea and the second largest port in Russia. 4,927 ha total area Advantages of Ust-Luga port: 4,843 ha 160,000 tonnes Availability of free areas available deadweight of the ships for further development area It is the only Russian port in the Baltic Sea which can accept ships with such deadweight The territory of prospective 3.2 nautical miles development near the seaport length of Luzhsky sea channel of Ust-Luga is considered Which allows bypassing the overloaded transport hub of Saint Petersburg for development and implementation of investment projects in such spheres as: 17.5 meters water depth Universality of the port Chemical industry its terminals and factory complexes 131 km transship and process more than to Saint Petersburg 20 categories of cargo Oil and gas industry

million tonnes of cargo Oil and gas 98.7 turnover of the port in 2018 processing

Investor’s guide to Leningrad region 17 Success stories

Historically Siemens considers the Government of Leningrad region as the most important partner for business and investments. Experts of the company considered more than 30 locations while searching for a suitable place for construction of a factory. SGTT produces large gas turbines which is heavy oversized cargo requiring complex logistics. Infrastructure of the site in Gorelovo allows SGTT to organize all necessary logistics.

Nico PAETZOLD, CEO of Siemens Gas Turbine Technologies

I would like to express my gratitude to the Government of Leningrad region for continuous support in solving difficult issues arising during implementation of large investment projects.

Yuri MIKHAILOV, CEO of KNAUF PETROBOARD

Nokian Tyres has been closely and fruitfully cooperating with the Government of Leningrad region for 14 years. Overall support of the regional and municipal authorities contributed to successful implementation of our investment project in . If we had to choose a site for construction of our plant in Russia we would undoubtedly make the same choice as in 2014 – Vsevolozhsk in Leningrad region.

Andrey PANTYUKHOV, CEO of Nokian Tyres

18 Investor’s guide to Leningrad region I would like to express my gratitude to the Government of Leningrad region and the team of the Front Office, they really supported us at all stages. We would not be able to achieve such results if it wasn’t for the Front Office. Fantastic team, it was great to work with them.

Jon HJARTLAND, General Manager of Jotun Paints

Our factory has been working for almost 20 years and over this time we’ve managed to establish partnership relations with the Government of Leningrad region. Committee for Economic Development recommended us to contact the Front Office which became a very reliable, tried-and-true assistant for us in solving many production issues which require support of the authorities.

Andrey KUTSENKO, Director of JACOBS DOUWE EGBERTS RUS coffee factory

An investment project of Metsä Group and Leningrad region, which resulted in a modern wood processing plant for the region, is a great example of mutually beneficial partnership between business and the government.

Vyacheslav KANATOV, CEO of Metsä Svir

Investor’s guide to Leningrad region 19 There were two reasons for choosing Leningrad region for construction of a factory: geographical location which allows exporting our products to many countries in the world and favourable conditions for doing business. The Government of Leningrad region provided enormous help to us. As a result we have launched a hi-tech production from scratch in just 14 months which is still a record for our branch. We sincerely thank the Government of Leningrad region and the whole team of the Front Office for their help and support.

Mario CIOCCOLO, CEO of Thermex Group – Management company of Heating Equipment

Leningrad region is a promising market with enormous potential. All spheres of construction are dynamically developing here, modern technologies are being introduced. Geographical location of the region is perfect for both regional deliveries and expansion of export potential. I would like to mention fruitful cooperation with authorities. The team of the Government of Leningrad region headed by the Governor Alexander Drozdenko, including the economic team, applies business oriented approach.

Marina POTOKER, CEO of ROCKWOOL Russia

20 Investor’s guide to Leningrad region Galactika Group of Companies has been successfully cooperating with the Government of Leningrad region and the Administration of for a long time. A joint project on creation of production of fresh cheese became the most important project for us. It will allow processing excess of high quality milk produced by the regional farms and will saturate market with domestic products.

Dmitry PINCHUKOV, Chairman of the Board of Galactika Group of Companies

The team of Ust-Luga has implemented a unique project: for the first time in Russia a private developer constructed from scratch and in a short period a port which is currently the largest port in the Baltic Sea. It would have been impossible to implement such a large project without support of Leningrad region. Due to the port of Ust-Luga the region has moved to a new social and economic level.

Victoria FEDOROVA, CEO of Ust-Luga Company

Leningrad region has favourable location in terms of logistics which is especially important for distribution facilities. A new distribution centre allows providing products to more than 716 retail facilities not only in Saint Petersburg and Leningrad region, but also the Republic of and region. I would like to express my gratitude to the Government of Leningrad region and the team of the Front Office for their assistance at all stages of signing an investment agreement.

Evgeniy OVCHINNIKOV, Deputy Director for Investment Policy of Tander

Investor’s guide to Leningrad region 21 Contacts 64 B Malookhtinsky avenue, office 402, Saint Petersburg FRONT OFFICE FOR INVESTOR RELATIONS + 7 (812) 644 01 23 OF THE ADMINISTRATION OF LENINGRAD REGION [email protected]

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64 B Malookhtinsky avenue, office 406, Saint Petersburg

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22 Investor’s guide to Leningrad region 6/1 Lyalin pereulok, Moscow

+7 (495) 120 24 16

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ENTREPRENEURSHIP +7 (812) 576 64 06 SUPPORT FUND Leningrad region [email protected]

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More than 100 special services for business in “My Documents” centres and offices my 8 800 500 00 47 business www.mfc47.ru

Investor’s guide to Leningrad region 23 mfc47lenobl Investment portal of Leningrad region and social media – the main mouthpiece of the region for business

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