Russian gov't details work of economic zones


The list of activities prohibited in special economic zones includes mineral resources and fossil fuel production and refining. The exception is mineral water production in tourism and recreation zones. Other things not allowed include production of excisable goods with the exception of cars and car spare parts. The zones are created for 20 years and each has a strictly defined area. For industrial zones it is 20 square kilometers, while for technology implementation zones the limit is 3 square kilometers.

A special agreement is signed between a resident business and the state to define the sort of economic activity in which the business will be engaged. The agreement also fixes the volume of investment the resident is obliged to make. The volume cannot be lower than '10 million (US$13 million) of which '1 million must be invested in the first year of the resident's operation in the special economic zone.

There are currently four technology implementation zones. The residents are mostly IT companies. The businesses based in the Zelenograd Zone will specialize in microelectronics. Two residents -- the Zelenogradski Innovation Technology Center and AlfaChip -- are currently registered in this zone. Siemens and Mikron will probably set up there. The special economic zone in Dubna in the Moscow Region will host companies that specialize in information technology and nuclear physics. Currently based there are Luxoft Dubna and the Dubna Sistema Managing Company that specializes in plasma technology and implements nanotechnology in new materials production. The Boeing Co. and ProgressTech can be potentially set up in Dubna.

The other technology zones are in Saint Petersburg and in Tomsk. The former will host enterprises of the equipment engineering, telecom and biotechnology industries. Transas is set up there. Potential future businesses could be Alcatel SA, Cisco Systems Inc., Motorola Inc., the A.F. Joffe Institute of Physics and the Kozitski Plant. The special economic zone in Tomsk will host petrochemical industry enterprises.

Residents at the special economic zones will be granted customs and tax preferences. The zones' official authorities will handle issues related to communications with governmental bodies and officials. Businesses in the zones will enjoy tax breaks.