NOVGOROD RAYON.
INVESTMENT ENVIRONMENT.

Shortcuts:
Investment Climate
Analysis of Legislative System
Major Rayon Enterprises
Sites

Investment Climate

The policy of the local authorities is based upon common understanding of the principle that attraction of investment into the rayon, is the leading factor of its social and economic development, including the employment and income level of its citizens. This is the principle in accordance with which the investment policy of the rayon is being conducted with creating the most favorable conditions for investment capital as its main priority.

The Novgorod rayon has important advantageous when compared to other Russian regions. They include:

Position between Moscow and St. Petersburg (markets with the greatest solvent demands), not far from the Baltic States and Belarus. Within easy access by railway and roads to the St. Petersburg sea port, the Moscow river ports, the airport of these two cities. Two big navigable rivers Volkhov and Msta cross the territory of the rayon.

It is a metropolitan area relative to oblast and has a rather high economical potential.

The rayon also has significant reserves of sand and gravel deposits, fusible clay, and peat. Currently the works had been undertaken to explore the mineralized chloride sodium underground water.

Novgorod rayon has active regional and local investment legislation providing investors with a considerable number of tax privileges, as well as system of adaptation and follow-up of the projects. Additionally investors are offered with a wide choice of unoccupied sites with all the necessary infrastructure provided, industrial premises and capital assets.

The following measures that have been implemented by local authorities to increase the attractiveness of the rayon:

·        Guarantees for investors;
·        Tax privileges;
·        Natural resources;
·        A wide choice of unoccupied sites with all the necessary infrastructure provided;
·        Marketing researches;
·        Highly developed infrastructure;
·        Qualified and disciplined workforce.

It is worth mentioning that Novgorod rayon is a part of Novgorod oblast, which is acknowledged to be a territory with the best in Russia legislation to attract foreign investment. This is why the rayon shares many of favorable factors characteristic for the oblast. Primarily it is applied to investment legislation and political stability in the oblast and rayon.

<top>

Analysis of the Legislative System

Legislative system of Novgorod rayon like the legislative oblast environment is based on two obalst laws, namely, Oblast Law "On investment activity on the territory of Novgorod oblast" No. 29-OZ dated 11/06/98 (in the wording of 27.12.2001) and "On tax holidays for individuals and legal entities working in the Novgorod oblast" No. 14-OZ of 27.12.2001.

These laws define the rights of foreign and domestic investors in Novgorod oblast, system of guarantees and tax holidays for investors.

Thus, enterprises with domestic or foreign capital invested involved in production and registered in the city territory are exempt until full payback of their investments from paying some oblast taxes (property tax, land tax, transportation ownership tax). The profit tax is reduced by 4% of the sum paid to oblast budget. Profit tax privileges provided until the 1st of July 2001 stay in force for the whole payback period.

On the local level the legislative system comprises the Decision of Novgorod Rayon Board "On tax privileges to individuals and legal entities in Novgorod oblast" of December 28, 2001.

In accordance with acting legislative system all investors working in Novgorod rayon are exempt from local taxes, such as property tax, land tax, tax for maintaining municipal militia. Profit tax is also reduced by the part, which has to be paid into rayon budget until the full payback period. Criteria in accordance with which investors are exempt from taxes and payback period are similar to those accepted in oblast.

Thus, the favorable legislative system proves to be effective and comply with oblast legal environment.

<top>

List of Major Enterprises

Economy of Novgorod Rayon is based on the enterprises of industrial and agricultural sectors.
Industry of the Rayon depends on the following 15 primary enterprises:

A) Production of chinaware:
·        JSC Proletary;
·        LLC Vozrozhdenie.

B) Peat extraction enterprises:
·        JSC Tesovo-1;
·        JSC Tesovo-2.

C) Woodworking enterprise:
·        JSC Novgorod lespromkhoz;
·        Novoselitsi experimental forestry;
·        JSC Msta-les.

D) Production of construction materials:
·        JSC Stroydetal;
·        JSC Keramsit;
·        JSC Stroymaterialy.

E) Food processing companies:
·        JSC Myasnoy Dvor;
·        JSC Podberezskiy kombinat khleboproduktov.

Novgorod rayon has a reputation of the biggest producer of agricultural products in the oblast.

The biggest agricultural enterprises in the rayon:
·        JSC Savino;
·        CJSC Novgorod svinokombinat;
·        CJSC Trubichino;
·        APC Ilmen;
·        Poultry farm Gvardeets.

<top>

Sites

Novgorod rayon has identified all unoccupied sites and put them into a computer database. All sites have an engineering infrastructure and supplied with the preliminary technical specifications. The most attractive sites are available here.

<top>