THE CITY OF MOSCOW AND NEW POSSIBILITIES FOR PRODUCTION

LOCALIZATION

ON MARCH, 19TH, 2015

MOSCOW – AN ATTRACTIVE PLATFORM FOR LOCATION OF HI-TECH PRODUCTION

Large market for sales: 15 million people within the metropolitan area limits

Many years of industrial traditions Largest scientific and university

center in Russia Centre of hi-tech industries 7th among the European cities in

terms of investment attractiveness* Developed infrastructure for

employees (including schools, kindergartens, polyclinics)

5th among 20 megalopolises of the world in terms of the number of projects involving foreign investments

15th place among all cities of the world in terms of gross regional

product (USD 321 bln) 59 % of all direct foreign investments

in Russia* Largest transportation hub in Eastern

Europe Extensive network of technology

parks, technopolises and industrial parks with the total area of 155 hectares

Industrial areas with the total area over 77 km2

Tax concessions and subsidies for investors

*According to Ernst&Young research

MOSCOW – AN ATTRACTIVE PLATFORM FOR LOCATION OF HI-TECH PRODUCTION

Area: 2,511 sq. km

Budget: $51 billion (2015)

Export: $215.4 billion*

Import: $118 billion*

Moscow combines advantages of the largest megacities of the world with lower operational costs (rent, labor power, communications), moreover, the support of

the Government of Moscow based on the "one contact" principle makes it possible to mitigate all of the most significant business risks

* According to the data of the Federal Customs Service for the year 2014

Facts and figures:

PRIORITY DEVELOPMENT FIELDS

The Government of Moscow has identified a number of priority industries to be developed in the territory of the city

Priority industries

Pharmaceutical industry Production of medical items Aviation industry Automobile industry Information technologies Radio-electronic industry Biochemistry Production of car components Production of construction materials and

equipment Food industry (raw materials and

equipment)

GROWTH POINTS – INDUSTRIAL AREAS

SPECIAL-PURPOSE TERRITORIES

Slava Technology Park

TPS Moscow

Mosgormash Technology Park

VNIIMETMASH

Strogino Technology Park

Special-purpose small business

territory -Zelenograd

Special economic

zone Zelenograd

Sapfir Technology Park

Vizbas Technology Park

Kalibr Technology Park

The city maintains a comprehensive system of support of innovative companies: special platforms offering residents access to the infrastructure, tax concessions, information and consulting support.TehnoSpark

Technology Park

MOSCOW RAILWAY SYSTEM

Radial directionKm

240

Circle line

54

Railway crossings

81Km

Railway overpasses

10

Junctions

74

TAX CONCESSIONS AND SUBSIDIES

Reduced rate of income tax – 13.5 % for 10 years

Zero rate property tax– for a period of 10 years

Reduced lease rates

Provision of subsidies

Provision of grants, scholarships and bonuses

Product demand promotion

Assistance in product promotion

Reduced rate of land tax – 0.01 % of cadastral value for 10 years (for technopolises and technology parks)

0.03 % of cadastral value for 10 years (for industrial parks)

Zero rate property tax– for a period of 10 years (for technopolises and technology parks)

Reduced rate of property tax – 1.1 % for 10 years (for industrial parks)

Reduced lease rates

Provision of subsidies for establishment and development of property complexes including infrastructure

To residents of special-purpose territories

To management companies of special-purpose

territories

TAX CONCESSIONS FOR RESIDENTS AND INVESTORS OF SPECIAL ECONOMIC ZONE ZELENOGRAD

Duty-free zone regime

Income tax

Unified social tax (ESN)

Personal income tax (NDFL)

üüüüüüü

Import customs duties - 0 %VAT on imported goods - 0 %Simplified system of transport registration, own customs post

13.5 % until 2016

14 % until 2017

13 %

Property tax 0 % for 10 years

Transport tax 0 % for 5 years

Land tax 0 % for 5 years

Reduced-rate land lease around $14,000 per 1 hectare a year

Purchase of land at reduced rates around $700,000 per 1 hectare Cost of access to utility and transportation lines $0 Period of existence of the special economic zone until 2054

According to estimations of Russian and international companies, the benefits provided to residents of the special economic zone make it possible to save up to 30

% of capital investments and up to 20 % of operational expenses

ADDITIONAL GUARANTEES FOR INVESTORSA draft law providing for additional guarantees to those investors that implement industrial or hi-tech projects in the territory of Moscow is being finalized.

Nationalization and seizure of property (Art. 235 and 242 of the Civil Code of the Russian Federation)

Termination of rights to land plots, buildings, structures and other real estate as a result of actions of Moscow authorities

Unfavorable changes in the laws of Moscow (increase in rates of regional taxes, increase in land lease rates, prohibitions and restriction on import and use of equipment, migratory restrictions)

Illegal actions or omissions of Moscow public officials (delay in or refusal to issue a land plot development plan, refusal to grant land plots)

The proposed law ensures protection of owners’ rights in the following cases:

The decision to provide guarantees is taken by the government of Moscow on a case-to-case basis Guarantees are provided for a period of 7 to 10 years Eligibility criteria for receipt of guarantees are determined by Moscow Governmental Order

THANK YOU!

Department of Science, Industrial Policy and Entrepreneurship

22 Voznesensky per., Moscow, 125009

Tel.: +7(495) 957-05-10

Fax: +7(495) 957-05-20

E-mail: dnpp@mos.ru

Web site: www.dnpp.mos.ru