The Pskov Oblast Law "On Attracting Investments to the Pskov oblast"
Adopted by the Council of Deputies of the Pskov oblast on March 19, 1998.
The given law determines legislative, economical and social terms of attracting the capital of Russian and foreign legal entities and individuals, loans of foreign states into economy of the Pskov oblast. It is aimed at providing the rights and property rights protection of investors.
Chapter 1.GENERAL PROVISIONS.
Article 1. Legislation on investment activity
Legislative regulation of investment activity in the territory of the Pskov oblast is conducted on the basis of the Laws of Russian Federation "On investment activity in the Russian Federation", '' On foreign investments in the Russian Federation'' and on the basis of other normative-legal acts of the Russian Federation, the Pskov oblast and the given Law. If international agreement stipulates the rules other than contained in the given Law, then the rules of the international agreement are applied.
Article 2. Investments and investment activity
Investments are monetary funds, target bank contributions, stocks, shares and other securities, leasing, technologies, machinery , equipment, licenses, including those on brand marks, credits, any other property or property rights, intellectual values invested to the objects of business undertakings and other kinds of activity in order to get profits (income) and achieve positive social effect. Investment activity is investing or investment and a combination of practical actions on performing investments. Investment activity can be conducted at the expenses of any sources, not forbidden by legislation and international commitments of the Russian Federation and the Pskov oblast.
Article 3. Subjects of investment activity
Investors, customers, executors of works, users of investment activity objects, suppliers, insurance companies and other participants of investment process are the subjects of investment activity.
Individuals as well as legal entities including foreign states and international organizations may be the subjects of investment activity.
Investors are the subjects of investment activity investing their own, loan or debt capital in the form of investments and providing its target use. The following authorities may act as investors: - bodies, authorized to manage state and municipal property or property rights; - citizens, organizations irrespective of their legal form; - foreign individuals and legal entities, states and international organizations. The merger of investment assets is admitted for joint investment. Investors may fulfill functions of any other participant of investment activity in accordance with item1 of the given article.
The customers may be investors, as well as any other individuals and legal entities, authorized by the investor (investors) to fulfill the realization of investment project, not interfering into business or another activity of the other participants of investment process unless it is stipulated by the agreement (contract) between them. In case if the customer is not an investor, he is provided with the rights of possession, use and management the investment for the period and within the authority, established by the mentioned agreement, and in conformity with the active legislation.
Investors, state and municipal authorities, foreign states and international organizations, for which the object of investment activity is created, may be users of the objects of investment activity. In case the user of the object of investment activity is not an investor, the interactions between him and investor are determined by the agreement (decision) on investment in the order fixed by the Russian Federation legislation.
Article 4. Forms of investments
Investors have a right to invest in the territory of the Pskov oblast by the way of: equity holding in organizations, established jointly with legal entities and individuals of the Pskov oblast, having permanent residence in the territory of the Pskov oblast; establishing organizations, completely owned by investors; purchasing organizations, property complexes, buildings, constructions, equity holding in organizations, shares, bonds and other securities, and other property that according to the laws of the Pskov oblast and Russian federation can belong to Russian and foreign investors; participation in privatization of state and municipal property objects; purchasing the rights of land-tenure and other natural resources; purchasing other property rights; other investment activity, not forbidden by the laws of the Pskov oblast and the Russian Federation.
Article 5. Investment objects
Newly established, modernized and existing capital assets, working assets in all branches and economy spheres of the oblast, securities, target deposits, scientific-technical production, rights for intellectual values, land and other natural resources of the Pskov oblast can become investment objects.
Article 6. Privileges for investments
The decision of the oblast Administration or authorized body of the Administration on investment projects that received positive resolution as a result of feasibility expertise is the ground for privilege taxation. For privilege taxation on the confirmed project it is necessary for the investor to notify tax authorities in the locality of the organization and the authorized body of the Pskov oblast Administration in writing about the beginning of the investment activity realization, having enclosed the commitment of keeping separate accounting records on transactions, connected with the realization of investment project. The Pskov oblast Council of Deputies on the suggestion of the Head of the oblast Administration determines the priority branches of economy, certain municipal establishments and projects, that are of great significance for Pskov oblast economy, in relation to which more privileged terms for attracting investments may be granted.
Article 7. Rights of investors
The investor's use of property, financial and intellectual values in forms not forbidden by the legislation of the Pskov oblast is admitted to be their inalienable right, it is not subject to restrictions and is protected by the law. All investors have equal rights for investment activity performing. Investors have rights: to independently determine directions, forms and volumes of investments; to attract individuals and legal entities to investment activity on agreement basis; to purchase property rights objects directly from individuals and legal entities or through intermediaries without any restrictions on range and volume; to purchase state securities in conformity with the legislation in force; to lease any property objects; to manage, own and use the objects and investment results; to participate in privatization of state and municipal property objects, and of the objects of fundamental construction-in-progress in the territory of the Pskov oblast in accordance with the legislation; independently establish prices on the products (works, services); freely reinvest the received after-tax profit in the territory of the Pskov oblast; use their property as a collateral of their liabilities including loans attraction; transfer to the individuals and legal entities the right of managing, owning and using his property; lodge claims for compensation of caused damage, including missed benefit; implement other activities not forbidden by the Legislation of the Pskov oblast and Russian Federation;
Article 8. Duties and responsibilities of investors
The investors are obliged: to pay taxes fixed by the Laws of the Pskov oblast and the Russian Federation; to receive resolutions of investment project expertise concerning the observance of sanitary-hygienic and ecological demands; to receive necessary permissions and agreements from appropriate bodies for fundamental constructions; to keep to international norms, standards and requirements to investment activity; to prevent illegal competitive practices and to keep to the requirements of antimonopoly legislation; to keep and to present in due form an accounting and statistic book-keeping in accordance with existing legislation. If the legislation or agreement obligations are violated the investors bear property and other responsibility, provided by the legislation of the Russian Federation and the Pskov oblast and also by the concluded agreements.
Chapter 2. STATE GUARANTEES OF INVESTMENTS PROTECTION AND PRIVILEGES FOR INVESTORS
Article 9. Guarantees of investors' rights
Russian and foreign investments in the territory of the Pskov oblast can enjoy legislative protection, that is provided by the given Law, by other legislative acts and international treaties of the Russian Federation and the Pskov oblast. The national treatment of activity for foreign investments is being established in the Pskov oblast , it can not be less favourable than the conditions for property rights and investment activity for Russian legal entities and individuals of the Russian Federation. The regulations of the given Law are valid in the territory of the Pskov oblast without any discrimination and can be applied to all investors. The Head of the Pskov oblast, Heads of local administrations may act as guarantors on commitments of legal entities, connected with their relations with investors. If investment activity is terminated, the investor have a right for the return of invested funds and received profits in money terms or in kind at the market price at the moment of termination of investment activity, excluding sums and other tangible values that had been used or lost due to the actions of investors themselves or actions with their participation.
Article 10. Guarantees from forced withdrawals and illegal actions of state authorities and their officials
Investments in the Pskov oblast are not liable to nationalization and cannot be subject to requisition or confiscation except the cases foreseen by the legislation in force. State bodies and their officials may not interfere investors' activities, except the cases when such interference is permitted by the legislation of the Pskov oblast and is within a competence of these bodies and officials. Investors have a right for reimbursement of losses, including missed profit, caused by illegal actions of state bodies of the Pskov oblast or their officials, and due to non-proper fulfillment of the above mentioned commitments in relation to the investor, provided by the legislation for the state bodies. Disputes between investors and state bodies, public and other organizations, legal entities, individuals are to be considered in the court, arbitration, and on the agreement of parties by arbitration tribunal.
Article 11. Guarantees in cases of changing legislation of the Pskov oblast
In case the Pskov oblast adopts legislative acts, containing norms, that will worsen investors' position and conditions of their commercial activities, the corresponding norms of these acts will be applied to investors already implementing investment activity only after a period of three years from the moment the legislation damaging to the investor came into effect. The above mentioned regulation is not applied to the changes of legislation, concerning ensuring of defense, national security and public order, environment protection, safety devices, morals and health of population.
Article 12. Guarantees for using incomes
The incomes, received as a result of investment activity, after payment of appropriate taxes and duties, belong to investor as their property and they are guaranteed to transfer incomes outside the Pskov oblast, including hard currency, due to previously implemented investments, in particular: incomes from investments, received as profit, dividends, interest and other recompenses from the capital provided for use; sums, paid on the basis of rights for monetary demands and fulfillment of agreement commitments, that refer to investments and have economic value; sums, received by investors due to partial or complete liquidation or sale of investments; compensations, stipulated by article 9 of the given Law. The procedure of payments transfer related to investments implemented outside the territory of the Russian Federation is fixed by the legislative acts of the Russian Federation.
Article 13. Stimulation of investments
The following privileges are granted to investors: privilege tax rates, temporary exemption from tax payment, delay of tax payment; rendering financial support by granting state investment loans at privilege rate; granting state guarantees to investors. When forming the budget for the coming year, the Council of Deputies of the Pskov oblast on the suggestion of the Head of the Pskov oblast Administration, foresees expenses on financing the preparation and implementation of investment projects, related to development of the Pskov oblast economy . Assignment of state resources in the form of state loan at privilege rate are granted on a competition basis and first of all for the projects, providing the highest effect for economy of the Pskov oblast.
Article 14. Tax privileges for investment activities
The following tax privileges are granted when performing investment activity in the Pskov oblast:
On the profit tax except the part, included into the Federal budget:
1.1. To establish the rate of 0,1 % for the legal entities- investors for the period, starting from the moment of profit receipt up to the full recoupment of the investment project, but not more than for 3 years. For the investment projects, being realized in priority branches of the Pskov oblast economy and having received the affirmative conclusion of the authorized body of the Pskov oblast Administration the exemption period may be prolonged by the oblast Council of Deputies up to 10 years on the presentation of the Head of the Pskov oblast Administration.
1.2. To establish the rate of 0,1 % during the first 5 years from the moment of state registration for organizations, fulfilling leasing operations, the share from which is not less than 80 % of all the company profits for the accounting period.
1.3. To establish the rate of 15 % for the insurance organizations, registered in the territory of the Pskov oblast, fulfilling investment insurance and reinsurance in the part of the profit amounts received from insurance of investment projects, carried in the territory of the Pskov oblast. To establish the rate of 0,1 % in case, if the profit of the insurance company, registered in the territory of the Pskov oblast, received from insurance of investment projects, carried out in the territory of the Pskov oblast, will amount not less than 80 % of the total company profit.
1.4. To establish the rate of 0,1 % for banks, bank branches and other credit establishments, registered in the territory of the Pskov oblast, in the part of amounts, assigned for investment programs and projects, realized in the territory of the Pskov oblast.
To establish a tax rate on property for legal entities, performing the investment activity in the Pskov oblast at the amount of 0.01% of objects value, where construction of new, reconstruction and modernization of already existing productions and objects, participating in the mentioned processes, is carried on, for the period, starting when expenditures are first incurred to their complete repayment, but not more than for three years.
To exempt legal entities, having a license for international transportation and carrying international haulage of cargoes and passengers, registered in the territory of the Pskov oblast, from purchase tax on automobiles ( trucks and buses for more than 10 passengers).
To establish the use tax on motorways, included to the territorial road fund of oblast, at the amount of 0,75 % of the base subject to taxation for legal entities, fulfilling construction of new, reconstruction and modernization of already existing productions, during the first 2 years from the beginning of products realization (works, services) produced at the created ( purchased ) within the investment project capacities.
The amount of the tax privileges, provided by the given Law, can't exceed the investment amount.
In case of non-fulfillment of the demands and (or) terms of investment project realization, that should be confirmed by the resolution of authorized body of Pskov oblast Administration, the right for privilege is lost, the amount of tax payments is subject to paying to the oblast budget of the Pskov oblast and local budget for the whole period the privilege was granted.
Article 15. Feasibility expertise of investment projects with Russian and foreign investments
The investment projects that require state guarantees of the Head of the Pskov oblast or participation of the state in the project financing, are subject to obligatory feasibility expertise of the authorized body of the Pskov oblast Administration. The procedure of holding feasibility expertise is established by the Head of the Pskov oblast Administration. The inspection of demands and terms of investment projects realization is carried by the oblast Administration or the authorized body of the oblast Administration while the investment project realization and on it's completion.
Chapter 3. ESTABLISHMENT AND LIQUIDATION OF LEGAL ENTITIES WITH PARTICIPATION OF FOREIGN CAPITAL
Article 16. Procedure of setting-up legal entities with foreign investments
The enterprise can be established by foundation, or investor can purchase shares in already established enterprise or investor can purchase the whole enterprise. In cases, when the form of investment activity, selected by foreign investor, requires the establishment of a new legal entity, it is established on the decision of a foreign investor or on the basis of the agreement on foreign investments. Foundation documents of an enterprise with foreign investments should contain the name, organization-legal form and legal address, determine the subject and goals of enterprise activities, list of participants, amount of authorized capital and participants' shares in currency of the Russian Federation , the procedure and period of authorized capital fund formation, structure, composition and authority of management bodies, decision making procedure, list of questions requiring unanimity, the procedure of liquidation an enterprise. Moreover, other provisions that do not contradict to the laws of the Pskov oblast and Russian Federation and show the peculiarities of enterprise activities can be included into charter documents. Contributions into authorized capital (fund) of the enterprise with foreign investments are evaluated by the agreement between founders (participants) on the basis of local prices and (or) world prices, and in case of setting-up the enterprise, completely owned by a foreign investor, by himself independently on the basis of world prices. The evaluation can be made both in currency of the Russian Federation and in foreign currency converting contribution costs into currency of the Russian Federation according to the exchange rate of the Central bank of the Russian Federation on the date the foundation documents on setting-up an enterprise were adopted. The exchange rate should be fixed in foundation documents. An enterprise with foreign investments is considered to be founded and acquires the right of a legal entity from the date of state registration. Registered enterprise gets the standard registration certificate.
Article 17. State registration of legal entities with foreign capital
State registration of a legal entity with foreign capital is made by the Administration of the Pskov oblast, that is obliged to register the enterprise within 21 days from the moment, the application was presented or inform the applicant about the reasons of refusal. The amount of registration duties is determined by the Law of the Pskov oblast "On registration duties". The duties are transferred into regional budget of the Pskov oblast. The activities of non-registered enterprises (societies, partnerships) with foreign capital are forbidden. The profits, received from such activities, are charged in a judicial way and transferred into regional budget of the Pskov oblast. The refusal to register legal entities with participation of foreign capital is permitted in case of violating the fixed procedure for setting-up a legal entity or if foundation documents do not meet the requirements of the legislation. The refusal on the motives of non-expediency is not permitted. The refusal can be appealed in a judicial way. The changes or amendments to foundation documents of a legal entity with participation of foreign capital are to be officially registered. State registration of an enterprise with foreign investments is made if the following documents are available:
1. For joint ventures:
a) written application of the founders with a request to register the enterprise that is being established;
b) two notarialy certified copies of foundation documents;
c) decisions of appropriate expertise in cases foreseen by the law;
d) for Russian legal entities - notarialy certified copy of the decision of a property owner to establish an enterprise or a copy of the decision of an authorized body, and notarialy certified copies of foundation documents for each Russian legal entity participating in the establishment of a joint venture;
e) a document on financial solvency of a foreign investor issued by the serving bank or other credit-financial institution (with certified translation into Russian language);
f) extracts from the trade register of the country of origin or other equivalent evidence of a legal status of a foreign investor in accordance with the legislation of the country of his location, citizenship or permanent residence (with certified translation into Russian language).
2. For the enterprise entirely owned by foreign investors:
а) written application of foreign investor for registration;
b) two notarialy certified copies of foundation documents;
c) a document on financial solvency of a foreign investor, issued by serving bank or other credit-financial institution (with certified translation into Russian language);
d) extracts from the register of the country of origin for a foreign investor (with certified translation into Russian language);
e) decisions of appropriate expertise in cases foreseen by the law.
3. For affiliates of enterprises with foreign investments and affiliates of foreign legal entities:
а) application signed by the head of enterprise that established an affiliate with request of its registration;
b) notarialy certified copy of an extract from the decision of an authorized management body on establishing an affiliate;
c) two notarialy certified copies of the provision on an affiliate;
d) notarialy certified copies of foundation documents of the enterprise establishing a branch;
e) for a foreign legal entity - extract from a trade register of the country of origin or other equivalent evidence of its legal status in accordance with the legislation of the country of his location (with certified translation into Russian language);
f) receipts on the payments of registration duties;
g) conclusions of appropriate expertise in cases provided by the Law.
Article 18. Liquidation of a legal entity with participation of foreign capital
Enterprise with foreign investments is liquidated in cases and according to the order provided by the acting legislation for appropriate organization-legal forms of enterprises. In cases, when the fact of contributions in the amount of not less than 50 per cent into the chartered fund by each of the participants, registered in charter documents, is not confirmed by the documents on expiration of a year after registration, then the body that registered this enterprise acknowledges it as insolvent and decides on liquidation thereof. The information about it is published in press. The registration of an enterprise liquidation with foreign investments is carried out by the body that registered its setting-up on the basis of the statement of a liquidating committee and liquidating balance confirmed by an auditing organization. The information on liquidation is published in press.
Article 19. Reorganization of a legal entity with participation of foreign capital
In cases provided by the legislation the reorganization of a legal entity with participation of foreign capital is conducted on the agreement with state bodies that perform antimonopoly regulation. In case if one legal entity is merged with another, all property rights and obligations of each of them are transferred to a legal entity that appeared due to a merger. In case one legal entity joins to another one, the last gets all property rights and obligations of a joined legal entity. In case a legal entity splits-off - property rights and obligations of reorganized legal entity in appropriate shares on division statement (balance) are transferred to legal entities newly appeared due to this division. In case one or several legal entities separate from a legal entity, each of them gets corresponding shares on a division statement (balance), property rights and obligations of a reorganizing legal entity. In case a legal entity is reorganized into another organization-legal form, a newly developed legal entity gets all property rights and obligations of a former legal entity. In cases when reorganization of a legal entity with participation of foreign capital is connected with establishment of new legal entities with participation of foreign capital, they are founded and registered according to the order, fixed by article 17 of the given law.
Chapter 4. PURCHASING THE RIGHTS OF LAND- TENURE AND OF OTHER PROPERTY RIGHTS BY INVESTORS AND ENTERPRISES WITH RUSSIAN AND FOREIGN INVESTMENTS.
Article 20. Rights of land-tenure and of other natural resources
Granting the rights of land-tenure including its lease and of other natural resources to investors and enterprises with Russian and foreign investments is regulated by the Land code and other laws of the Pskov oblast and Russian Federation.
Article 21. Agreements on product sharing, concession and other agreements
The rights on development of renewable natural resources and on economical activities, connected with the use of state-owned objects, but not transferred to enterprises, institutions and organizations for economic or operative management, are granted to the investors on the basis of production sharing agreements, concession agreements and other agreements, concluded with investors by the Head of the Pskov oblast Administration or other authorized state bodies according to the order, fixed by the Laws of the Pskov oblast and the Russian Federation. Unilateral change of the terms of production sharing agreements, concession agreements and other agreements is forbidden, unless other is provided by the contract or the agreement. Product sharing agreements, concession agreements and other contracts can contain withdrawals from the laws of the Pskov oblast and Russian Federation. In this case they should be approved by the Deputy Council of the Pskov oblast.
Chapter 5. FREE ECONOMIC ZONES
Article 22. Investment activities and legal treatment of economic activities in free economic zones.
In order to attract investors to the Pskov oblast, free economic zones can be created, where privilege in comparison to general treatment of economic activities, including foreign economic and customs regime, is established. Free economic zones are established in order to develop export potential, increase hard currency income and make foreign economic ties of the Pskov oblast and its certain administrative regions more active on the basis of attracting foreign and Russian investments, advanced equipment, technology, management experience. Legislative regime of economic activities in free economic zones is determined by the laws of the Pskov oblast.
Capter 6. DISPUTE SETTLEMENT PROCEDURE
Article 23. Dispute settlement procedure
Investment disputes, including the questions on the size, terms and procedures of paying the compensations are settled in a judicial way pursuant to the legislation of the Russian Federation.
Article 24. Putting the present Law into effect
1. To put the present Law into effect from the date of its publication.
2. To declare invalid the Laws of the Pskov oblast: " On attracting investments to economy of the Pskov oblast", adopted by the oblast Council of Deputies on January 31,1996; " On amendments to the Law of Pskov oblast " On attracting investments to economy of the Pskov oblast", adopted by the oblast Council of Deputies on September 26,1996.
Head of Administration of Pskov oblast
Y. E. Mikhailov
Pskov March 30,1998 № 21-03