How support measures
Affect Moscow Investment Climate

According to Rosstat, the investment in the Moscow economy grew up by 2.6 times over the last 9 years. The growth of investment in Moscow fixed assets is facilitated by the support measures provided to businessES by the city government. Last year, two more were launched: investment tax deduction and job creation incentive program. Large investors already took advantage of these support measures.
The Moscow Government support measures allow the active investors with technopark, industrial complex, anchor technopark resident statuses to reduce the regional tax burden by 17-25%. A similar mechanism is in place for new investment projects (for more details see Preferential Rates for Status Holders).

Let's present two new support measures.

INVESTMENT TAX DEDUCTION

The Investment Tax Deduction Act became effective on January 1, 2020. The right to an investment deduction is granted to companies which are located in Moscow, do manufacturing production and have been granted the of a Moscow investor category 1 or 2 status. Enterprises with the category 1 status can apply for a reduced rate of the regional profit tax - 12.5%, category 2 - 8%.

An important condition for granting the tax deduction is investments in fixed assets with a useful economic life of 3 to 30 years. The minimum annual investment amount of RUB 200 m allows to obtain Moscow investor category 1 status, category 2 requires RUB 300 m.

An application for the Moscow investor category 1 or 2 status can be submitted via the Moscow Investment Portal.

The first to take advantage of the new preferences was Smerfit Kappa Moscow Union, a packaging manufacturer, which received the Moscow investor category 2 status: the profit tax rate for the company will be 8%.

123 Moscow enterprises are currently eligible for preferences.
These are:

58
industrial complexes
37
technoparks
15
anchor residents
13
priority investment projects
Over the past five years, the amount of investment by companies with industrial complex, technopark and anchor resident statuses exceeded RUB 96 bn, and 117,900 jobs have been created.

INCENTIVE PROGRAM

Another support tool launched last year is the job creation incentive program. Within its framework, developers can get the investment project status and a support from the city, if they create jobs along with the new residential housing outside the Third Ring Road and the Moscow Ring Road. Developers of apartment buildings are exempt from the fee for changing the permitted use type a land plot if they invest funds in construction of offices, industrial, commercial, sports, social and educational facilities.

In 2020, Moscow concluded two agreements binding developers to build 100,000+ square meters of office space outside the Third Ring Road. The SZ Pioneer-1 company will build within the first project the Ostankino Business Park office building complex in the Butyrsky subdistrict by the end of 2023. The planned project investments will amount to RUB 5.4 bn. The second agreement was signed by the city with RDK Pioneer LLC and foresees a new retail and office center as part of the Botanichesky Sad transfer hub in Wilhelm Peek Street in the Rostokino subdistrict by 2023 as well. The investment amount is RUB 2.4 bn. As a program implementation result, the city will get new jobs and additional sources of budget revenue through property and profit taxes, and the developer - preferences and commercial spaces to generate potential revenue in the future.
Preferential rates for status holders
* For organizations which are investment activity entities in relation terms of profit derived from the implementation of Moscow investment priority projects, for the management company and anchor residents of a technology park or industrial park.

** For real estate.
E-mail: pressprom@mos.ru
Audience: 16+