Moscow presents new industry support mechanisms at Arabia Expo 2019
They will provide reduced supply price, import substitution in significant industries, more jobs and tax revenues increase for the treasury.
At Arabia Expo 2019, Moscow presented various support options for foreign investors, as well as the unique practice of offset transactions, involving long-term procurement of goods made in Russia by the government.
“Offset agreements support investors by means of government orders and have several advantages for both parties. For Moscow, it means the reduced supply price, import substitution in significant industries, more jobs and tax base growth. The investor gets a reliable and solvent customer, a long-term sales guarantee and subsequent registration in the sole supplier register,” said Alexander Prokhorov, Head of the Moscow City Department of Investment and Industrial Policy.
Such transactions are closed for up to 10 years and only for the supply of goods made in Russia, provided that the investor contributes at least $16 million to set up or modernize the production.
Besides, achievements in pharmaceutics, one of the Moscow priority sectors, were presented at the exhibition.
“Moscow has 32 large and medium-sized enterprises ― pharma manufacturers, 82 research institutes, 243 health facilities in 34 technology parks, the Technopolis Moscow special economic zone, 11 enterprises with contract manufacturing sites and land plots (large-scale investment projects),” Alexander Prokhorov added.
According to Emil Petrosyan, Deputy Head of the Moscow City Department of Investment and Industrial Policy, the Moscow Government has already concluded two offset pharmaceutical supply agreements for 53 international non-proprietary names. The total private investment will be $ 140.4 million.
In Moscow, manufactures of these goods are located in the Technopolis Moscow special economic zone. The residents are provided with preferential rent terms and tax benefits.
Moscow is ready to offer Arab countries other cooperation formats and has all the resources for new investment and industrial projects.
“Moscow has one of the best investor support systems today. According to the results of 2018, the Moscow Government granted more than RUB 164 million of subsidies, with more than RUB 111.6 million for leasing and RUB 52.8 million for loans. The Moscow Government assumed budgetary commitments for 2019–2020 under concluded agreements for RUB 169.7 million roubles. It should be noted that the Moscow Government paid out RUB 184.9 million under previous commitments and agreements concluded from 2016 to 2017,” Alexander Prokhorov said.
Arabia Expo 2019 is open at the Manege from 8 to 10 April to be attended by delegations from 22 Arab countries and 85 regions of Russia, about 10,000 participants in total, including 700 Middle East companies and business associations.