MOSCOW, July 23 (RIA Novosti) - Russian President Vladimir Putin has signed a law on special economic zones, the Kremlin press service said. The State Duma (the lower chamber of the Russian parliament) passed the law on July 8 and the Federation Council (the upper chamber) endorsed it on July 13, 2005. The zones will have a special regime of entrepreneurial activity. The government is set to choose locations for the zones. The zones will be formed to boost the development of processing and high-tech branches of economy and transport infrastructure, as well as the manufacturing of new types of products.
A zone may be located on the territory of only one municipality but cannot fully occupy any administrative-territorial unit.
The law stipulates two types of special economic zones: industrial economic zones and technological economic zones.
Zone residents will be offered a wide range of preferences aimed to promote business activities, including customs and tax benefits, the reduction of the single social tax from 26% to 14%, the five-year exemption from property and land taxes, etc.
Industrial economic zones will be formed in a 'green field' on territories of up to ten square kilometers. Technological economic zones will be created on the base of research centers.
An obligatory condition for the status of an industrial economic zone resident is at least 10 million euros of investments, including at least one million euros of investment made in the first year of the zone's existence.
Free customs regulations will be in force in the zones.
The law prohibits the extraction and processing of minerals, metallurgical production, production of excisable goods, expect cars and motorcycles, etc. on the territory of the special economic zones.
The new law will not extend over the Kaliningrad region (the Russian exclave on the Baltic Sea) and the Magadan region (the Far East) where separate laws on special economic zones are in force.
