Business Forum “Business Crimea Days in Moscow” held on November 23 at the Chamber of Commerce and Industry of Russia featured a presentation of the opportunities offered by Crimea’s largest business event, the Yalta International Economic Forum (YIEF).
Sergey Aksyonov, Head of the Republic of Crimea, called YIEF a key instrument in attracting investment into the region. “We think that YIEF is one of the principal venues for attracting both Russian and foreign investors,” Mr. Aksyonov stressed in his address at the Business Crimea Days in Moscow.
Replying to questions from the media, Mr. Aksyonov noted that YIEF-2018 will offer potential investors sites for business projects. “The Forum should offer investment sites that have already undergone every registration procedure, with strictly defined borders for specific investment projects. We are doing systemic work in the area,” Head of the Republic of Crimea said.
He also said that the program of the 4th Yalta International Economic Forum was still being compiled, and it would be aimed at creating a business environment that is comfortable for investors. “We need to create a comfortable business environment, and we are working on it. All the processes should be accessible electronically. Then no one will depend on some individual official,” Mr. Aksyonov noted.
He also stressed that Crimea’s leaders are interested in medium businesses from other Russian regions coming to Crimea. “We want to attract medium business,” the Head of the Republic said. “Large companies are interested in Crimea, but there are nuances stemming from the sanctions, although many in some way enter Crimea via their subsidiaries. I think Crimea may offer medium business space for work and opportunities for development.”
YIEF Presentation: Growth Dynamics
Sergey Lazutkin. Director of the Yalta International Economic Fund, gave the presentation.
“YIEF exhibits excellent growth dynamics,” Mr. Lazutkin noted. “For three years running, the number of attendees has been doubling: the first YIEF had 600 participants, the second had 1,100, and the third 2,200. We expect no fewer than 3,000 people at the upcoming 4th YIEF, including approximately 500 international participants from 60 countries.”
He stressed that preparations for YIEF-2018 were going full tilt. “Invitation campaign is underway, we are compiling lists of speakers and the subject range for the Forum’s discussions,” the YIEF Fund Director said. “This year, Roscosmos was active at the Forum, they organized a session on sectoral issues and invited foreign colleagues to Yalta. We hope that Russia’s other largest state corporations will be just as active at the next YIEF.”
Yaroslav Ivanchenko, a member of the YIEF Fund board, Director of the State autonomous institution “Business and Cultural Centre of the Republic of Crimea,” suggested that, given YIEF’s dynamic development, a Congress Center should be established in Crimea to serve as the main venue for the Yalta International Economic Forum and other business, political, and cultural events.
“It is now necessary to found a large Congress Center in Crimea to host major international events. This center could serve as the venue not only for the Yalta International Economic Forum, but also for other large events held during the year,” Mr. Ivanchenko said. He also noted that international business circles are exhibiting growing interest in Crimea. “Last year, approximately 200 foreign delegations visited Crimea to offer economic projects,” Mr. Ivanchenko said.
Moscow – Crimea: special cooperation terms
Andrey Nazarov, co-chair of the Organizing Committee of YIEF-2018, co-chair of the All-Russia Public Organization "Delovaya Rossiya", suggested introducing special economic terms for those Moscow enterprises that are ready in invest in Crimea.
In 2016, investment into Moscow’s economy totaled 1.7 trillion rubles, Moscow companies have significant investment resources that could be partially channeled into Crimea’s economy, Mr. Nazarov noted. He proposed creating a mechanism that would allow Moscow-registered companies to carry out economic activities in Crimea without having to register at the peninsula. “That will allow indemnifying the companies against the risk of western sanctions,” Mr. Nazarov explained.
In addition, he suggested developing a mechanism granting Moscow companies ten-year deferral on taxes payable to the Moscow treasury on condition their investment into Crimea’s economy equals the assessed tax.
“They will be granted a ten-year deferral for the tax amount payable to the Moscow treasury on condition that amount is invested into Crimea. And for Moscow not to worry about not receiving those funds, they will be encumbered, used as collateral and if the company fails to pay, ten years later its Crimean assets will be transferred to Moscow,” Mr. Nazarov said.
He noted that for that mechanism to be introduced, much preparatory work needs to be done and several procedural restrictions currently in place need to be bypassed. “However, despite those factors, if Mr. Sobyanin and Mr. Aksyonov do have the political will for the plan, we may set up a working group and by the next YIEF, we may have developed the legal mechanism for creating special economic conditions; we could present it as the Forum and then work,” Andrey Nazarov said.
He believes that applying the proposed mechanism could significantly speed up the development of Crimea’s economy. “If 100 medium-sized Moscow companies join this cooperation project, Crimea will receive no less than 500 billion rubles in 5 years. This is comparable to the total investment amount, both public and private, that Crimea has received since reunification with Russia,” Mr. Nazarov noted.
Rafael Abramyan, Director of the Department for Economic Cooperation with CIS Countries and Development of Eurasian Integration at the Ministry of Economic Development of Russia, suggested that Crimea entrepreneurs use the Ministry’s platforms to establish contacts with foreign partners.
“Foreign partners’ temporary withdrawal from the Crimean market tells us we need to re-orient and search for partners in the post-Soviet space and, which is particularly important, in Russian regions,” Mr. Abramyan noted. “Our ministry holds large annual inter-regional events with Turkmenistan, Azerbaijan, Kazakhstan, Abkhazia, Tajikistan, Uzbekistan, and other CIS countries. Today, we are ready to promote Crimea, to invite members of the Crimean business community to use this work format.”