Russia Hopes New Economic Package Will Stimulate Small, Medium Business Growth

In an effort to stimulate small and medium enterprises (SME) in manufacturing, services and research, a new government stimulus package includes a two-year tax holiday, and a five-year tax holiday for SMEs operating in the Russian Far East and Eastern Siberia.   Another major innovation to be implemented in 2014 is the establishment of the Federal Guarantee Fund, which is designed to make it easier for businesses to gain access to credit financing. Natalya Larionova, the head of the SME and competition department at the Economic Development Ministry, told RBTH that the fund will support new investment projects worth a minimum of 300 million rubles (about $9 million).  Foreign investors will also qualify for all the stimulus measures announced by the government, but only if they meet several conditions. Under Russian law, small companies set up by foreign citizens acting as individual entrepreneurs enjoy the same rights as Russian small and medium businesses.  If, however, the company was founded by a foreign legal entity or firm, it will have to seek a large Russian partner or several smaller partners (who control at least a 75% stake in the company) if it wants to be treated in the same way as any other Russian company.
http://rbth.ru/business/2014/01/23/new_businesses_in_russia_to_take_a_two-year_tax_holiday_33471.html

Russia Plans IPO of Largest Oil Shipper

The Russian Government has announced plans to sell controlling share of the country’s largest shipping company, Sovcomflot, in a public offering, provided it receives a suitable offer says Deputy Prime Minister Igor Shuvalov.  Half of the money from the IPO will go to Sovcomflot, which specializes in petroleum and LNG shipping, for maintenance and further development of its 156 vessel fleet.  Shuvalov stressed the government didn’t set any deadline for Sovcomflot’s initial offering. The stock will be listed as market conditions become suitable, with a two stage plan anticipated. “At first we plan to sell 25% minus one share stock, then 25% plus one share stock. I hope the deals would follow each other,” Shuvalov explained.
http://rt.com/business/news/russia-sovcomflot-privatization-plan-920/

Experts at International Investment Forum Urge Russia to Boost Competitiveness

According to experts at the 11th International Investment Forum in Sochi, Russia's economic potential is being lost by poor management, with absolute government dominance at the root of many of the country’s key problems. “If you have too strong government dominance, then you have problems with things like corruption, inefficiency, no clear targets and things like that,” noted Ilkka Salonen, chairman at Uralsib bank.  Russia ranks 67th on the global competitiveness scale, and lags behind in efficiency as well. Under the TP-Index that shows a company's turnover to workforce ratio, each worker at Russia’s largest private energy company Integrated Energy Systems produces an average of $175,550 in annual revenue, while by comparison, workers at US Energy Future Holdings produce an average of $895,650 in annual revenue. Overall, 244 agreements were made at the 2012 Sochi Forum, worth $11.1 billion. The figure compares with 295 deals worth $13.85 billion done in 2011.
http://rt.com/business/news/sochi-forum-government-economy-836/

Russia and China Pledge Work on Global Recovery at APEC Summit

At the APEC summit on Saturday Chinese and Russian leaders urged Asian-Pacific countries to protect themselves by forging deeper regional economic ties.  Spelling out plans to pump $157 billion into infrastructure investments in agriculture, energy, railways and roads, China's Hu said Beijing would do all it could to boost prospects of a global recovery by rebalancing its economy. Putin added that trade barriers must be smashed down. "The global economic recovery is faltering," he said.  Pledging that Russia would be a stable energy supplier and a gateway to Europe for Asian countries, he suggested that "[w]e can overcome the negative trends only by increasing the volume of trade in goods and services and enhancing the flow of capital." General discussions at the two-day APEC summit focused on food security and trade liberalization, and an agreement was reached before the summit to slash import duties on technologies that can promote economic growth without endangering the environment.
http://www.reuters.com/article/2012/09/08/us-apec-summit-idUSBRE88702W20120908

Multimedia Journal Aims to Attract Moscow Investment

Beginning in October, Moscow's Department for External Economic Relations will publish a multimedia journal -- available in English, Russian and German -- aimed at attracting small to medium-sized investors to Moscow.  The free journal will be available via download on iPhone, iPad and Android devices, and will also be accessible via a PDF download from the department's website. Among other things, the journal will provide an overview of economic and legal issues facing foreign investors, with particular emphasis on taxation issues and documentation required to register a company in Moscow. Alexei Sitnikov, head of the International "Skolkovo" Development Fund, believes that using this type of progressive, electronic communication (the type actively used by the younger generation of entrepreneurs and investors) will be a key to attracting foreign investment to Moscow, and to Russia in general.
http://izvestia.ru/news/533763

General Motors to Invest $ 1 Billion in Russia over Next 5 Years

General Motor's head of international operations, Tim Lee, said the company plans to invest $1 billion over the next five years to expand car and components production in Russia.  Lee indicated that GM, which currently produces cars in Kaliningrad, St. Petersburg and Togliatti, will invest the money to increase output capacity and in sourcing local components.  The number of cars sold in Russia rose 40 percent last year to 2.5 million, with growth slowing this year, but remaining in the double digits.  In June, GM started work on expansion of its plant in St Petersburg, where it plans to more than double production to 230,000 vehicles per year.  The Petersburg plant makes the Chevrolet Cruze sedan and the Opel Astra hatchback. The expansion will add production of the Astra sedan.  Lee also said GM would expand production of the budget Chevrolet Niva sport utility vehicle, being made in a joint venture with Russia's AvtoVaz.

http://www.reuters.com/article/2012/08/29/us-gm-russia-idUSBRE87S08C20120829

Russia Hopes Upcoming Asia-Pacific Economic Cooperation Forum Will Boost Foreign Trade, Particularly With Asia and U.S.

For the first time in its history, the Asia-Pacific Economic Cooperation (APEC) forum will take place in Russia, with a keynote speech by President Putin in Vladivostok on September 7th.  The Russian government expects the upcoming forum will help to attract more investment to Russia and remove doubts  about the country's efforts to invest abroad, First Deputy Prime Minister Igor Shuvalov said Tuesday.  "The main result will be how much investment Russia will receive after the meeting and how the other economies will be ready to accept Russian investment," Shuvalov said at a news conference.  Shuvalov hopes the APEC forum will help Russia to achieve its goal of having at least 50 percent of its foreign trade come from Asian economies and/or the United States.  Noting that Russia has long had stronger trade ties with Europe, Shuvalov acknowledged that Russia will continue to seek a new trade agreement with the European Union, with the ultimate goal of establishing a free-trade zone.  Shuvalov also noted that Russia will apply as much effort to promote trade with the Asian economies, adding that he hopes that Putin would set up an agency to advance trade ties with Asia.
http://www.themoscowtimes.com/special/apec/2012/apec-summit-might-boost-investment.html