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Crimea Offers Scenery and Tax Breaks; Russian Business Unconvinced

Published: May 30, 2014 (Issue # 1813)



  • Waves lapping up against a monument to the scuttled ships of the Black Sea Fleet in the bay of Sevastopol.
    Photo: Denis Abramov / Vedomosti

In an effort to jumpstart Crimea's faltering economy, a government plan could offer tax breaks and other juicy business conditions on the peninsula for the next half century — but even this may not be enough to attract businesses to the badly run-down region.

Russian politicians began talking about creating a special economic zone in Crimea almost immediately after the referendum on March 16, in which more than 90 percent of voters supported leaving Ukraine to become Russia's 22nd republic.

"Our aim is to make the peninsula as attractive as possible to investors, so that it can generate sufficient income for its own development," Prime Minister Dmitry Medvedev said in early April, RIA Novosti reported.

The legislation, which is currently under development in the Economic Development Ministry, provides truly appetizing conditions: residents of the special economic zone are freed from property taxes, land taxes, transport taxes and federal profit taxes, Gazeta.ru reported, citing a copy of the document. These conditions are sure to pique investors' interest, although in the current draft only the largest players will qualify. The price of becoming a resident eligible to receive the zone's privileges costs 150 million rubles ($4.3 million), putting the status effectively out of the reach of small and mid-sized businesses.

"Crimea is a tourism and service zone, the local population earns most of their income through small businesses. The entry ticket should be affordable," said Andrey Goltsblat, Managing Partner of Goltsblat BLP. This issue is already receiving attention: Russian business lobby group Delovaya Rossia has proposed lowering the limit to 70 million rubles ($2 million) for medium-sized businesses and 20 million rubles ($580,000) for small businesses, co-chairman Andrey Nazarov said.

But if the legislation is to achieve its aims at all, it will have to overcome one crucial obstacle that has become the elephant in the room during political and business debates over Crimea. The regions' social and transportation infrastructure has received essentially no investment since the fall of the Soviet Union, and would now be hard put to support an influx of demanding modern businesses.

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ALL ABOUT TOWN

Wednesday, July 30


SPIBA continues their series of Look@It tours, which focus on the success stories of major brands in the St. Petersburg market. Today’s event will focus on the Gorky Golf Club and will also be held there. For more details visit spiba.ru



Thursday, July 31


Develop your leadership abilities during a lecture by famous Russian author and coach Radislav Gandapas. The event starts at 9 a.m. at 5 Lodeinopolskaya Ulitsa. The price for entry is 20,500 rubles ($570).


Relax and enjoy a Parisian atmosphere with some romantic and laidback jazz tunes during the Night of French Music at Lenny Jam Cafe, 63 Ligovsky Prospekt. The entrance fee is 250 rubles ($7).


The Women’s Business Club is hosting a Beauty Brunch where participants are invited to discuss the latest news in the beauty industry and listen to lectures by professional stylists in the business.



Friday, Aug. 1


Bikers from all around the world will gather to take part in a parade, extreme shows and rock concerts during the International Biker Festival that revs its engines today and runs through Aug. 3 near Olgino Hotel, 4/2 Primorskogo Shosse.


The Peter and Paul Fortress will be turned into an open-air cinema today and tomorrow as part of the 5th International Short and Animation Film Festival. A huge screen across the fortress walls will air short films non-stop with board games, photo sessions and other activities also on offer for visitors. For more information, visit www.opencinemafest.ru



Saturday, Aug. 2


Gatchina Palace Park Museum will host its second annual Night of Light, an impressive audio-visual show across the night sky. Tickets are 600 rubles ($16).


If graphic design is more your thing then check out Illustration Day, where you will be able to visit an exhibition, attend lectures by professionals and even show experts some of your own work. The event starts at noon at Zona Deystvia, 73 Ligovsky Prospekt. The entrance fee is 350 rubles ($10).



Sunday, Aug. 3


History lovers shouldn’t miss the chance to see reenactments of World War I battles in Pushkin at noon. Besides exciting war scenes, visitors can enjoy live music, historical costumes, an equestrian show and a fancy-dress parade starting from the Moscow gates.


Garage Sale, the popular and growing flea market where nothing is priced over 500 rubles ($14.11), starts today at noon in Loft-Project Etagi, 74 Ligovsky Prospekt. Be sure to get in early to score a bargain. Entry costs 50 rubles ($1.40)



Monday, Aug. 4


Continue the working week with a calm and steady mind with a free yoga lesson at 7 p.m. in the Bukvoed store at 23A Vladimirsky Prospekt.



Tuesday, Aug. 5


Visit The Romanov Dynasty doll exhibition today, where more than fifty porcelain dolls depicting Russian rulers, and made by Olina Ventzel, will be on show. The exhibition continues through Aug. 31 in Sheremetyev Palace, 34 Fontanka Naberezhnaya.



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