State Duma extends investment timeframe for SEZ residents in Kaliningrad region

MOSCOW. July 19 (Interfax) - The State Duma has passed in the third reading a draft bill that allows for increasing from 3 to 6 years the term of an investment project implemented in the Kaliningrad region for companies included in the register of residents of the Special Economic Zone (SEZ) from January 1, 2020 to December 31, 2021.

The government submitted the document (N316707-8) to the parliament in March.

"An application for amendments to the investment declaration in terms of increasing the period of capital investment from three to six years may be submitted by a resident through December 31, 2023," the draft bill reads.

Furthermore, the period for notifying an applicant of inclusion or non-inclusion in the register is increased from 1 to 3 working days.

Also, the provisions stipulating that if a resident is excluded from the register before receiving a certificate of fulfillment of the conditions of the investment declaration, the said resident must pay the taxes not paid by him due to the use of the special tax payment procedure are no longer in force.

In its conclusion on the document, the State Duma Committee on Economic Policy notes that during the period of sanctions pressure there were significant difficulties in moving goods to the Kaliningrad region through EU territory from the rest of Russian territory and back. "SEZ residents faced problems such as the breakdown of established partnerships, changes in how suppliers conducted business activities, growth of transportation costs and reorientation from land transport to sea transport, interruptions in the supply of raw materials and components," the conclusion reads.

The Committee said that the extension of the investment period for the fulfillment of capital investment commitments made by SEZ residents will contribute to the preservation of investment activity.

The document will enter into force 10 days after its official publication.