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REPUBLIC OF TATARSTAN – INVESTMENT IN FUTURE

REPUBLIC OF TATARSTAN – INVESTMENT IN FUTURE. Kazan. Geneva. Most attractive FDI destinations 2005 FDI Confidence Index 2005, top 25. Low Confidence. High Confidence. Values Calculated on a 0 to 3 Scale. Source: A.T.Keamey. Казань. Tatarstan is a centre of East European part of Russia.

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REPUBLIC OF TATARSTAN – INVESTMENT IN FUTURE

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  1. REPUBLIC OF TATARSTAN – INVESTMENT IN FUTURE Kazan Geneva

  2. Most attractive FDI destinations 2005FDI Confidence Index 2005, top 25 Low Confidence High Confidence Values Calculated on a 0 to 3 Scale Source: A.T.Keamey

  3. Казань Tatarstan is a centre of East European part of Russia Republic of Tatarstan is situated in the centre of a large industrial area of Russia, 800 kilometres away to the East from Moscow, at the junction of the Volga and the Kama rivers. It borders with 8 Russian regions. It has free access to the markets of regions with over 40 million customers.

  4. The Republic of Tatarstan • Territory - 67,800 sq. km. • Population – 3.8 million • Population density - 55,8 persons per sq. km. Natural Resources Oil - 800 million tonnes Gypsum - 72 million tonnes Oil bitumen - 12.5 billion tonnes Peat - 800 peat bogs Construction stone - 35,3 million cubic meter Brick clay - 73,5 million cubic meter Chalkstones, dolomites, etc.

  5. Investment Attractiveness Well-developed transportation infrastructure Availability of raw material resources Favourable geographic location Significant industrial and scientific potential, qualified labour resources Legislation supporting investment activities Advanced manufacture

  6. Real Growth of Gross Regional Product GRP of the Republic of Tatarstanand Russia per capita

  7. GRP Structure of Tatarstan

  8. Financial Stability Quality of life: consumer price index Predictable business environment Improvement of business climate and growth of economy Quality of life:real wages Promotion of consumption

  9. «Quality of life» index 1. Tyumen Region 2. Moscow 3. The Republic of Tatarstan 4. Saint-Petersburgh

  10. «Quality of life» Income of population (2005 in % to 2004) Growth of purchasing capacity Retail business turnover

  11. Main Areas of Economic Development of the Republic of Tatarstan Raising the competitiveness of production Doubling the GRP Rise in living standards Maintainingstable economic growth

  12. ACHIEVEMENT OF MAIN OBJECTIVE Promotion of innovations Development of hi-tech production SME Support Doubling the GRP by 2010 Attraction of investments

  13. Oil-Gas-and-Chemical Complex Chemical and petrochemical companies of the republic produce about 10 per cent of Russia’s chemical and petrochemical products. Mechanical Engineering Complex Represented by aircraft-building, automotive industry shipbuilding, and production of equipment. Programme of Social and Economic Developmentin 2005-2010 Areas of growth of the economy Small and Medium-Sized Enterprises In the last 4 years, the contribution of SME to the GRP has increased from 12.7 to 16.5 per cent. By 2010, the figure should not be less than 30 per cent and 37 per cent by 2015.

  14. Share of enterprises of Tatarstan in the total industrial output of Russia

  15. PROMOTION OF INNOVATIONS • Programme for Development of Innovation Activities for 2005 -2010; • Development of economic clusters which ensure the competitiveness of the republic’s economy; • Creation of a network of technoparks and business incubators, industrial production areas, technology transfer and new production mastering centres; • Development of scientific research centres based on institutions of higher education as research centres; • Increase in the proportion of scientific sector in the gross regional product; • Organisation and conduct of fundamental and applied R&D aimed at republic’s programmes.

  16. Share of innovative production in GRPof Tatarstan %

  17. Education and science Tatarstan is the region with strong educational and scientific potential. 170,000 persons are engaged in the sphere of education. Number of Students per 10,000 persons Kazan State University, Kazan State University of Technology, Kazan State Technical University, Kazan University of Economics and Finance are among the best Russian universities.

  18. PROMOTION OF SMALL BUSINESS • small business crediting • direct promotion of small business • creation and development of the infrastructure of support to small businesses engaged in the field of research and technology; • favourable conditions for working in business incubators • subsidising exporter companies • competition «The best exporter of the Republic of Tatarstan» in the category «small business enterprises »

  19. Investment Venture Fund of the Republic of Tatarstan Innovation Activities in the Republic of Tatarstan InnovationProduction Technopark «Idea» • concentration of the most promising and perspective innovative companies • coordination and support on every stage of development • commercialization of innovative ideas www.tpidea.ru • supports the introduction of innovations into the manufacturing industry • accumulates investment resources and directs them to the implementation of innovative projects www.ivfrt.ru Stabilisation Pledge and Insurance Fund of the Republic of Tatarstan provides financing for investment programmes and projectsof economic аnd social development of Tatarstan including projects of small and medium-sized businesses

  20. Share of small and medium enterprises in GRP of Tatarstan

  21. Investment Ratingof the Republic of Tatarstan Credit Rating of the Republic of Tatarstan : • Foreign exchange borrowings rating Ba1 stable outlook • Long-term credit rating BB - positive outlook Long-term rating in foreign exchange and local currency: • «BB» –forecast”stable” Investment rating among 89 Russian regions: • 5thin investment risk • 8thin investment potential (“Expert RA”, a Russian rating agency ) Since 2005 the rating of Tatarstan raised five times

  22. INVESTMENT FOCUS STUDIES of Expert RA Rating Agency • Republic of Tatarstan is a “supporting leader region”; • 6th place in thegeneral rating of Russian regions; • 5th placein the minimal investment risk in 2004/05; • 5th place inthe steadily low investment risk over the last decade; Risk rank Potential rank

  23. Capital investment % $ Billion

  24. Accumulated Direct Investments

  25. Accumulated Investment (1995-2005) As of 1 January 2006, Tatarstan has accumulated foreign investment in the total amount of US$1.43 billion

  26. Advisory Board for Foreign Investmentsin the Republic of Tatarstan Chairman of Supervisory Council– Prime Minister of Tatarstan R.N. Minnikhanov Advisory Board for Foreign Investments Government authorities Enterprises and organisations of the Republic of Tatarstan Large foreign investors Goals: • to protect interests of domestic and foreign investors • to contribute to creation of a favorable investment climate in the republic through timely resolution of issues arising in the course of attraction of foreign investments and implementation of topical investment projects.

  27. Investment Legislation of the Republic of Tatarstan • Law No.2180-XII of the Republic of Tatarstan of July 19, 1994"On Foreign Investments in the Republic of Tatarstan"(as amended on June 27, 2001 and on September 23, 2003) • Law No. 1872 of the Republic of Tatarstan of November 25, 1998"On Investment Activity in the Republic of Tatarstan"(as amended and added on June 24, 2003) • Resolution No. 123 of the Cabinet of Ministers of the Republic of Tatarstan of March 11, 2001"On Additional Measures of State Support for Enterprises (Organisations) of the Republic of Tatarstan Implementing Investment Projects"

  28. State Guarantees for Protection of Foreign Investments • The guarantee of legal protection of foreign investors; • The guarantee of compensation in the event of nationalisation and requisitioning of assets of a foreign investor or a commercial organisation with foreign investments; • The indemnification and compensation for damages to foreign investors; • The guarantee of transfer of payments in connection with foreign investments; • The guarantee of use of payments in the currency of the Russian Federation in the territory of the Republic of Tatarstan; • The guarantee against unfavourable changes in legislation of the Republic of Tatarstan. (Provided for by Chapter 2 of the Law No.2180-XII of the Republic of Tatarstan of July 19, 1994 "On Foreign Investments in the Republic of Tatarstan" )

  29. Tax Privileges for Foreign Investors Granting of privileges for transportation tax, land tax, and import duties is also possible.

  30. The Special Economic Zone of Industrial Production Type in the territory of Yelabuga District of the Republic of Tatarstan is situated near Yelabuga of Yelabuga District of the Republic of Tatarstan, 25 km. from Naberezhnye Chelny, 40 km from Nizhnekamsk, and 215 km. from Kazan (capital of the Republic of Tatarstan). The area of the Special Economic Zone is 20 sq. km. Symbols Izhevsk 180 km Polyanka Railway Mendeleevsk Territory of SEA «Alabuga» Highways Distance up to locality Kazan 210 km River port Kazan Elabuga Airport Kamaz Railway station Elabuga Nab. Chelny r. Tojma River port TATARSTAN Nizhnekamsk Kazan 210 km Naberezhnye Chelny Ufa 385 km Nizhnekamsk Krugloe pole Naberezhnye Chelny r. Kama Chistopol 170 km Airport “Begishevo” Naberezhnye Chelny Elabuga Nizhnekamskneftehim Airport Nizhnekamsk

  31. Tax Privileges for Participants of Special Economic Zone

  32. To become a resident of Special Economic Zone, one should: Sign an agreement on industrial production activities with SEZ management authority Invest in its production assets no less than EUR 10 million, of which at least EUR 1 million during the first year of development. WHY MAKING BUSINESS IN THE SEZ? • Advantageous geographical location • Readily available complete industrial production structure • No importation and exportation customs duties • Exemption from some taxes • Privileges for basic taxes • Up-to-date equipment and efficient services • Closely adjacent potential users of the products

  33. INVESTMENT PROJECTS Chemical and Petrochemical Industry OAO Tatneft ZAO Nizhnekamsk Refinery OAO Svyazinvestneftekhim Construction of an oil-extraction plant rated at 300,000 tonnes of seeds per annum OAO Nefis Cosmetics OAO Kazan Fat Production Plant Establishing the production of expandable polystyrene (EPS) rated at 50,000 tonnes per annum and ABS plastics rated at 70,000 tonnes per annum OAO Nizhnekamskneftekhim

  34. INVESTMENT PROJECTS Transport and Logistics Ministry of Transport and Roads of Tatarstan Toll road “Shali-Sorochy Gory” Ministry of Transport and Roads of Tatarstan Total cost of the project– 5.99billion roubles Investment required- 770 million roubles Form and volumes of state support requested – 3.594billion roubles Sviyaga Interregional Multimodal Terminal-Logistics Centre of Kazan Transport Hub Ministry of Transport and Roads of Tatarstan

  35. Foreign Trade Turnover Billions of dollars More than 100 countries are trading partners of TATARSTAN

  36. COMMODITY TURNOVER BETWEEN TATARSTAN AND SWITZERLAND US$ million Exports in 2005 Imports in 2005

  37. Khafiz Salikhov The Ministry of Trade and Foreign Economic Cooperation of the Republic of Tatarstan Address: 4 Ostrovsky St., Kazan 420111 TEL.: 7-843-299-10-07 FAX: 7-843-292-16-45 E-mail: mtorg@kabmin.tatarstan.ru Url: www.tatarmintorg.ru

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