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The Saratov Oblast government . Russian Federation .

The Saratov Oblast government . Russian Federation. Investment attractiveness of Saratov Oblast. The Ministry of Investment Policy of Saratov Oblast. Saratov Oblast – general information. South-east of European part of Russia Administrative center – Saratov city

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The Saratov Oblast government . Russian Federation .

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  1. The Saratov Oblast government. Russian Federation. Investment attractiveness of Saratov Oblast The Ministry of Investment Policy of Saratov Oblast

  2. Saratov Oblast – general information • South-east of European part of Russia • Administrative center – Saratov city • Area of the Oblast – 101.2 thous. sq. km • Population of the Oblast ≈ 2600thous. people • Population of Saratov city ≈ 850 thous. people • Distance from Saratov to Moscow– 858 km • National boundary with Kazakhstan – 550 km • Borders with 7 oblasts of the Russian Federation (Samara, Penza, Volgograd, Ulyanovsk, Tambov, Orenburg, Voronezh) • Location of Saratov city - at one of the largest navigable waterways – the Volga river • Southern temperate climate and advantageous fourth zone Moscow Povolzhskiy Federal District 858 km The Russian Federation Saratov Kazakhstan

  3. 107.1% 106.3% Average index in Russia Saratov Oblast Main economic parameters of Saratov oblast – Year 2007 Industry index* – Year 2007 (in % to correspondent previous period)) Gross Regional Product (billion rubles) Structure of GRP – Year 2007: Structure of foreign-economic activity - Year 2007 30.1% Industry Agriculture 15.4% TOTAL foreign-economic activity: 1874,3 million USD Transport and communication 15.0% 7.6% Construction Export:1394.0 million USD Import:480.3 million USD 12.8% Wholesale and retail trade 19.1% Other activities

  4. Industrialsector Main spheres of industrial sector of the Oblast: - oil & gas industry, oil processing, power generation, chemical production, construction & production of construction materials, machine & equipment construction, production of rubber & plastic goods, etc. Number of enterprises: -1969 large & middle-scale enterprises -3218 small enterprises Growth rates of production: - electro-, electronic & opticequipment:143.7% - machines&equipment:111.8% Construction : - volume of works: 31.6 bln. rubles - put into operation ~1 million sq. meters of apartments • Competitive production: • rolled glass • rubber items • accumulator batteries • synthetic fiber • wooden furniture • bearings • trolley-buses • carriages • tobacco products • mineral fertilizers • refrigerators & freezers • chemical fiber • synthetic detergents • wallpaper Major foreign companies investing in the Oblast: TNK – BP Holding: JSC “Saratov oil refinery” BOSCH group of companies: JSC “Robert Bosch Saratov'' Henkel company: JSC “Henkel – Yug'' BAT company: JSC “BAT – Saratov Tobacco Factory" Holcim group of companies: JSC ''Volskcement''

  5. Agricultural sector 2 Number of enterprises & farm households: - 8,000 + enterprises & farm households Volume of agricultural production: - 49billion rubles - 3rd place in the Volga Federal District Growth of cattle head : - sheep head: 113.0% - pig’s head: 100.1% - great cattle: 102.4% Budgetary provisions for agriculture: - growth rate: 122.2% - financing of cattle breeding and plant cultivation grew by 1.5 times Growth rates: - total agricultural production: 104.1 % - milk production: 106.4% - meat production: 112.8%

  6. Investment activities • Attractive Sectors of Economy for investment • power engineering • construction • construction materials industry • chemical industry • oil & gas extraction • automobile construction • biotechnology • food industry • agriculture • tourism • processing industries • etc. Volume of investments: - capital expenditures: 56.6billion rubles; - growth rate: during the period 2005-2007 , the volume of investments grew almost by 2.5 times Investment Rating( according to data of leading rating agency ''Expert-RA'‘): - 3B1 (lower potential / moderate risk) was established in regards to Saratov Oblast as of results of 2006-2007 • Current investment projects with foreign capital: • Metro Cash and Carry (Germany) • IKEA (Sweden) • BOSCH group of companies (Germany) • Holcim group of companies ( Switzerland) • Ramenka (Turkey) • BulgarConserv (Bulgaria) • Baring Vostok Capital Partners (Great Britain)

  7. Competitive advantages of Saratov Oblast Saratov Oblast The Oblast has at its disposal a variety of competitive advantages in respect to the main factorsof Business Doing: Geographical location Political situation Economic & social situation Labour force Transport infrastructure Mineral resources base Land resources Energy resources

  8. Competitive advantage - energy security Superfluous electric energy supply: - the volume of generated electricity is 41 billion kilowatt-hour - regional own electricity intake is less than 30 % of volume of output Fuel & energy complex enterprises: - Balakovo Nuclear Power plant - Saratov Hydroelectric Power station - Thermoelectric Power stations - Saratov oil refinery Safe fuel market: - considerable gas & oil deposits at the territory of the Oblast - regional own gas-extraction & oil exploration - total-lot gasification of inhabited localities and enterprises - crude oil processing & production of oil products at the Saratov oil refinery - two crude oil main lines (JSC “Transneft”) pass through the Oblast

  9. Competitive advantage - attractiveness of land resources • Availability of free lands for industrial use and construction : - sites are with all the distribution & supply lines, power & heat capacities • Availability of free agricultural lands: - total area of more than 877.9 thousand hectares • Low cost of the land

  10. Competitive advantage – reach mineral-resources base Solid minerals: - 564 mineral depositsmore than 280of them are accounted by State balance of reserves - 420 occurrences - 340 zones - 53 prospective areas • Cement raw materials - 590.2 mln. tons • Chalk - 159.5 mln. tons • Construction sands – 231.6 mln. cubic meters • Glass - making sands – 390 thous. cubic meters • Expanded clays – 53.5 mln. tons • Brick - tile clays – 143.4 mln. cubic meters • Building stones – 415. 8 mln. cubic meters Hydrocarbon deposits: - 110 deposits, incl.: are accounted by State balance of reserves - 53 developed - 36 in conservation - 21in exploration • Oil - 618.3 mln. tones • Dissolved gas - 221.1 bln. cubic meters • Free gas – 1526.7 thous. cubic meters • Condensate – 144.0 mln. tons • Net oil shale – 9.1 bln. tons

  11. Mineral resources base – solid minerals: brick - tile clays Brick - tile clays

  12. Mineral resources base – solid minerals: expanded clays Expanded clays

  13. Mineral resources base – solid minerals: carbonate rock for lime production Carbonate rock for lime production

  14. Mineral resources base – solid minerals: chalkstones & dolomite rocks Chalk-stones & dolomite rocks

  15. Mineral resources base – solid minerals: sandrocks & siltstones Sandrocks & siltstones

  16. Mineral resources base – solid minerals: construction sands Construction sands

  17. Mineral resources base – solid minerals: gaizes Gaizes

  18. Mineral resources base – solid minerals: mineral paints Mineral paints

  19. Mineral resources base – hydrocarbon deposits Oil & gas, shale oil, gas condensate

  20. Competitive advantage – unique transport infrastructure • Railroads: - South-Eastern and Volga Area divisions of the Russian Railways - railway main lines connect the Oblast with Central Russia, Urals, Siberia, Northern Caucasia and Central Asia • Motor roads: - total stretch of network in general use – 13. 7 thous. km - the density of hard coated motorways is 104 km for 1000 sq. meters (average indicator in Russia - 31 km for 1000 sq. meters) • River transport (on the Volga river): - river way connects the Oblast with Moscow, Western Urals, the Black Sea, the Caspian Sea, the White Sea, the Barents Sea, the Baltic Sea, the Mediterranean Sea • Air traffic: - JSC «Saratov airlines», state airline with regular airline service (airport of II class, international status) • Pipelines: - main lines of crude oil, oil products and gas transportation pass Saratov Oblast from the east to the west «Transneft», «Blue stream», «Gazprom»

  21. Saratov Oblast – one of the most important transportation points of Russia Railway roads Motor roads Water routes

  22. Competitive advantage – attractiveness of labour force • Low cost of labour force: - average salary is about 9,000 rubles per month, that is much less than in Moscow Oblast • Labour potential • - economically active population includes over 1300 thousand people, that is ~ 50% of the total population of the Oblast • Availability of qualified labour resources, high scientific and technical potential: - 6 institutes of the Russian Academy of Sciences - 21 Research Studies Institutes - 19 design institutes - 14 Institutes of Higher Education, lots of technical & training colleges • High cultural, medical and educational potential

  23. Competitive advantage – favorable socio-political, socio-economical situation • Full concord between people of different nationalities, races and creeds • Political stability in the Oblast : - Governor is authorized for 5 years, total change of authorities in the Oblast and in all municipal entities, as well as in many federal structures • Low criminality rate • Inflation in the Region: - 8.2 %, that is lower, than in average index in Russia • The expenses for ecological and nature protection measures: - are comparatively low • House making: - put into operation 1 million sq. metres of apartments in 2007, that is on 26% + to 2006 • Communication and telecommunication security • Well developed banking and insurance sectors of economics - more than 60 banks and departments - more than 70 insurance companies

  24. Most-Favoured-Nation Treatment for Investors in Saratov Oblast Most – favored - nation treatment for investors in Saratov Oblast is provided by:Laws of Saratov Oblast: - “On most - favoured-nation treatment for Investors in Saratov Oblast” - “On Tax Rate on Organizations Profits with Regard to Investors Engaged in Investment Activity in Saratov Oblast” - “On Transport Tax Levy in Saratov Oblast” - “On Levy of Wealth Tax on Organizations in Saratov Oblast”

  25. The Oblast law “On Most-Favoured-Nation Treatment for Investors in Saratov Oblast” The Oblast law «On Most-Favoured-Nation Treatment for Investors in Saratov Oblast» which come into force from January, 1, 2008 - provides the investor with: - tax preferences - budget credit and budget investments - implementation of management, information consulting, coordination of interactions between different levels of governance and business environment - providing state guarantees of the Oblast - providing objects ofpledgefund of the Oblast with the aim of ensuring obligations by attracting investment resources for realization of investment projects on the area of the Oblast - using other activities, that do not contradict to federal and regional laws

  26. The Saratov Oblast law “On most - favoured-nation treatment for Investors in Saratov Oblast” • The Ministry of investment policy of Saratov Oblast is authorizedto make investment contract with investor. • Investment contractguarantees: • conditionsand order of providing information about realization of investment project • Forms of interactions between investor andsystem of regional governance in the process of investment activity • Investor is given investment certificate after the conclusion of investment contract.

  27. The Saratov Oblast law“On Transport Tax Levy in Saratov Oblast” No transport tax regards to taxpayers, that follow next requirements: • taxpayer must be anew created organization • taxpayer must realize investment project, that implies acquisition of transport, according to key directions of regional economy development • From the moment of creation of organization taxpayer must do capital investments in the key assets located at the territory of Saratov Oblast no less than 50 million rubles, and no less than 650 million rubles into construction

  28. The Saratov Oblast law“On Transport Tax Levy in Saratov Oblast” • In the aim of using the law the following kinds of economic activity are key directions for the oblast economy development: • agriculture, huntingandwooden economy • manufacturing industries • construction • transport and communication • health servicesandproviding social goods • industryandpower, gas and water distribution • mineral extraction Period of releasing from transport tax: Five tax periods from the moment of the beginning industry capital investment when it was put in accountant balance of organization - taxpayer.

  29. The Saratov Oblast law“On Tax Rate on Organizations Profits with Regard to Investors Engaged in Investment Activity in Saratov Oblast” Profits tax of organization that is taken in the oblast budget fixed in the rate of 13.5% for anew created investor organizations: • implementation of investment project according to key directions of regional economy development • implement from the beginning ofcapital investments in the key assets located at the territory of Saratov Oblast no less than 50 million rubles, and no less than 650 million rubles into construction

  30. The Saratov Oblast law“On Tax Rate on Organizations Profits with Regard to Investors Engaged in Investment Activity in Saratov Oblast” • In the aim of using the law the following kinds of economic activity are key directions for oblast economy development: • manufacturing industries • construction • transport and communication • health services and providing social goods • industryandpower, gas and water distribution • mineral extraction • Period of releasing: Five tax periods from the moment of the beginning industry capital investment when it was put in accountant balance of organization - taxpayer.

  31. The Saratov Oblast law“On Levy of Wealth Tax on Organizations in Saratov Oblast” Taxpayer has a right to apply Wealth Tax in the rate of 0.1%,with implementation of the following conditions: • to be organization-investor • implementation of investment project according to key directions of regional economy development • implement from the beginning ofcapital investments in the key assets located at the territory of Saratov Oblast no less than 50 million rubles, and no less than 650 million rubles into construction Property have to correspond the following requirements: • to be created (acquired) by organization – investor after 1 January 2008 in the field of investment project implementation • to enter into structure oftax payment property on the territory of Saratov Oblast until the beginning of investment project implementation.

  32. The Saratov Oblast law“On Levy of Wealth Tax on Organizations in Saratov Oblast” • In the aim of using the law the following kinds of economic activity are key directions for the oblast economy development: • agriculture, huntingandwooden economy • manufacturing industries • construction • transport and communication • health servicesandproviding social goods • industryandpower, gas and water distribution • mineral extraction • Period of releasing from the transport tax: • Five tax periods from the moment of the beginning industry capital investment • when it was put in accountant balance of organization - taxpayer.

  33. The most-favored-nation treatment for investors in the Saratov Oblast Most-favored-nation treatment for investors in the Saratov Oblast is provided by: • State support: - mechanism of efficient interaction with investor in implementation of the projects, that includes information consulting, ensure of interaction between regional, federal, municipal powers, establishments and organizations, business in the aim of investment project implementation - Investment Counsil under the Governor of Saratov Oblast considers the investment projects planned to be implemented in the Oblast

  34. Investment Council under the Governor of Saratov Oblast • Tasks of the Counsil: • assistance to creation of favorable economic, financial and organization conditions • assistance in implementation of important for regional economy investment projects • analysis of the governance activity in the questions of administrative barriersremoval • elaboration of recommendations to the state and municipal governance • Governor of Saratov Oblast is the chairman of Investment Council, who leads it activity.

  35. “One – window” regime procedures of investment contract concluding process “One – window” regime procedures of investment contract concluding process : Step 1 Step 2 Step 3 Step 4 Step 5

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