‘Offshore zone’ being considered in Crimea

April 20, 2017 RBTH
A total of 883 companies are currently listed as residents of the Crimean FEZ. Source: shutterstock

Crimea’s government is considering setting up an offshore zone on the peninsula “for preserving information about investors,” RBK reports, citing a source close to the regional authorities.

Sergey Akksenov, who heads Crimea’s administration, confirmed the plan but added that “the idea is only being discussed,” including by the Russian Ministry of Economic Development.

“There have been proposals by [Russian] MPs, senators, and government members to find a convenient mechanism that has never been used before and could be piloted in Crimea,” Aksenov noted. “So far we have not yet identified such a mechanism.”

A free economic zone (FEZ) has been in operation in Crimea since 2015. Its residents are exempt from paying corporate income tax into the federal budget, and pay less in taxes to the regional budget. They also get a 10-year property tax rebate and a three-year land tax rebate. In exchange, small and medium businesses must invest three million rubles ($53,000) in production in the first three years of operation. Bigger businesses promise to invest 30 million rubles ($5.3 million). A total of 883 companies are currently listed as residents of the Crimean FEZ; their combined projected investments stand at 80 billion rubles ($1.4 billion).

Meanwhile, according to the Minister of Economic Development of the Republic, Andrey Melnikov,  Crimea will be a self-sufficient region in five years. 

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