Priority Social and Economic Development Area (PSEDA) is a part of constituent territory of the Russian Federation including restricted administrative and territorial entity, where the Government of the Russian Federation with its Order set up a special legal regime for doing business and other activities to create positive conditions for attracting investments and speed up regional socio-economic development and favorable conditions for people's living.
On January 28, 2016, the Government of the Russian Federation adopted the Resolution No. 45 ‘On creation of the priority social and economic development area ‘Gukovo’.
Priority social and economic development area ‘Gukovo’ (PSEDA ‘Gukovo’) is created to promote development of mono-town ‘Gukovo’ in Rostov region due to attraction of the investments to the mono-town and creation of new work places not related to the activities of the town-forming enterprises ‘KINGCOAL ‘YUG’ Ltd, ‘Gukovpogruztrans’ CJSC and ‘Central concentrating factory’ Gukovskaya ‘ JSC as well as creation of the conditions required to designate the mono-town to the mono-towns having stable social and economic climate.
Priority social and economic development area is created for 10-year period. Life of priority development area can be prolonged for 5 years.
The following individuals may become the residents of the priority social and economic development area: profit-making organizations excluding the governmental and municipal unitary institutions, financial organizations including credit organizations and insurance organizations as well as professional members of the security markets, which meet the following requirements:
- a legal entity is registered in the priority social and economic development area ‘Gukovo’;
- a legal entity does its business only in the priority social and economic development area ‘Gukovo’;
- a legal entity shall implement the investment project conforming to the requirements of the Government of the Russian Federation in the priority social and economic development area ‘Gukovo’;
- a legal entity is not a town-forming organization of the mono-town ‘Gukovo’ or its affiliate.
The main requirements to the investment projects of the residents of PSEDA ‘Gukovo’ within the first year after registration of a legal entity in the Register of Residents are defined with the Decree of the Government of the Russian Federation as of 28.01.2016 No. 45:
- minimum amount of capital investments is 5 000 000 rubles;
- minimum number of new working places is 20;
- implementation of the investment project according to the list of the permitted types of businesses.
PSEDA residents are granted with the following preferences
- the rate of the corporate profit tax payable to the federal budget is 0% (instead of 2%) within the initial five years starting from the year, when the first profit was obtained. The tax rate payable to the regional budget may not exceed 5% (instead of18%) within the initial five years starting from the year, when the first profit was obtained, and within the next five years – minimum 10%;
- reduction of insurance rates payable to the state non-budgetary funds within 10 years from the date of legal status registration as PSEDA resident. To the Pension Fund of the Russian Federation – 6% (instead of 26%), to the Social Insurance Fund of the Russian Federation – 1, 5% (instead of 2, 9%), to the Compulsory Medical Insurance Fund – 0, 1% (instead of 5, 1%). Reduced rates are applied concerning the residents, who registered their status within the period at least 3 years from the date of PSEDA creation;
- fixing the reduced rate for calculation of the mineral extraction tax within 10 years. The rate is taken as equal to 0 prior to the moment, when PSEDA resident starts applying reduced rate to the corporate profit tax– within 2 years, 0,2 – within the next two years of business activity;
- it is possible to be released from the property tax payable to the regional budget and from local land tax;
- on February 26, 2016, the Governor of Rostov region ordered to provide preferences for PSEDA residents in the regional level: setting up the tax rate of the corporate profit tax payable to the regional budget in the amount 0% (instead of 18%) within the initial five years starting from the year, when the first profit was obtained;
- setting up the rate of the corporate property tax in amount 0%.
The list of the permitted types of businesses for the residents of PSEDA ‘Gukovo’
- Plant breeding, animal breeding and hunt as well as services in these spheres.
- Mining of minerals.
- Food industry.
- Beverage industry (excluding distillation, treatment and mixing of alcohol, manufacturing of distilled alcoholic beverages: vodka, whisky, brandy , gin, liqueur, etc., manufacturing of beverages mixed with distilled alcohol drinks, mixing of distilled alcohol, manufacturing of food-grade alcohol, manufacturing of wine, manufacturing of cider and fruit wine, manufacturing of other non-distilled beverages cooked from the fermented materials, manufacturing of beer, manufacturing of grist, manufacturing of mineral water, manufacturing of non-alcoholic favored sweet beverages, except of mineral water).
- Manufacturing of textiles.
- Manufacturing of clothes.
- Manufacturing of leather and products made of leather.
- Treatment of wood and products made of wood and cork except of furniture, manufacturing of products made of straw and materials for weaving.
- Manufacturing of rubber and plastic products.
- Manufacturing of other non-metal and mineral products.
- Metallurgical production.
- Manufacturing of ready metal products excluding machines and equipment.
- Manufacturing of electric equipment.
- Manufacturing of motor vehicles, trailers and semi-trailers.
- Manufacturing of other transport vehicles and equipment.
- Manufacturing of furniture.
- Activity of on-ground and pipeline transport (excluding the activities of pipeline transport).
The main regulatory documents