84 percent of overseas investors view their businesses in Russia as successful and 94 percent are going to expand them, Prime Minister Mikhail Fradkov said at a government session.
Photo: Dmitry Dukhanin
| Other Photos |
 |
|
 |
Fradkov Vows Support for Investors
// Investors: in stability we trust
Russia’s Prime Minister Mikhail Fradkov held a session of the overseas investment council on Monday. The government has promised to meet investors’ requests. Yet, ministera are still unable to solve three problems that impede an investment flow – corruption, arbitrary enforcement of laws and the lack of protection from aggressive business practices.
Opening a session of the investment council Mikhail Fradkov informed that 84 percent of overseas investors view their businesses in Russia as successful, and 94 percent are going to expand them, according to opinion polls. Foreign investments have gone up $27 billion, to $128 billion from the start of the year. Direct investments have added 43.6 percent, while portfolio ones have nearly tripled. “This proves that foreign investors believe in the stability of Russian economy,” Mikhail Fradkov said. Representatives of major overseas companies operating in Russia who were present at the meeting did not contend this statement.
Six task forces of the overseas investment council have been working for the last six years with the government, pushing for amendments to Russian legislation. Investors are quite satisfied with the way the government met recommendations of the previous council in one year. For example, tax legislation was amended so that VAT payments, tax on profits and tax on personal profits were streamlined. In addition, differential tax on natural resources extraction (taxation of worked-out wells was reduced on) was introduced. As foreign currency legislation was liberalized on July 1, the ruble became fully convertible. The obligatory sale of currency proceedings was abolished and so was the norm of reserving money and using special accounts for foreign currency operations. The refinancing rate was reduced to 11.5 from 13 percent. The government also made importing auto parts easier and started working on lifting the “Classified” stamp from information on balance reserves of strategically important natural resources, streamlining forms of tax accounts and procedures of refunding VAT as well as improving laws in transfer pricing etc. A new bill On the Subsoil is still being amended. Meanwhile, the overseas investment council is championing extra guarantees for investors.
The council voiced new requests on Monday. In state regulation of economy, investors want to simplify the issuing of work permits for foreign nationals, introduce the electronic signature, speed up the enforcement of the technical regulation reform, make cheaper licensing for perfume production and even change the amount of TV commercials. Economic Development and Trade Minister German Gref promised to meet these demands yesterday.
A request to lift the secret status in the natural resources industry also found understanding at the government. Natural Resources Minister Yury Trutnev promised to open access for investors to land-surveys and map information. He said the classified stamp had already been taken from data on reserves of diamonds and the platinum group’s deposit. The minister also assured investors that they would be eligible to take part in the development of strategic deposits. The Natural Resources Ministry has drafted a set of amendments to the On the Subsoil bill to ensure it.
Investors working in agriculture are hoping for lower import duties on equipment and raw materials which are not produced in Russia as well as on raw. Agriculture Minister Alexey Gordeev was quite wary in his promises. It is not very likely that investors will see lower duties on raw.
The Finance Minister was not very much compliant either. Most demands of investors have been turned down, according to session protocols of the council’s tax task force. Nonetheless, Deputy Finance Minister Sergey Shatalov reported that most problems with refunding VAT would be over by the next year.
Prime Minister Mikhail Fradkov called yesterday’s session fruitful while German Gref voiced his willingness to fight bureaucracy and corruption. Speaking at the session of the investment council, Gref repeated his offer to set up a special agency to attract foreign investments. Mikhail Fradkov did not quite like the idea, but he did not dismiss outright. “We need to work on this matter as a new state body may create more bureaucratic barriers and even exacerbate corruption problems,” the prime minister said.
Irina Granik
All the Article in Russian as of Oct. 17, 2006
|
|
|
