The briefing focused on measures to improve the investment climate in Russia.
Briefing by Economic Development Minister Maxim Reshetnikov
Question: Today the Government has supported the draft law on a simplified procedure for issuing residence permits to foreign investors. Mr Reshetnikov, can you tell us in more detail about the proposed changes in the legislation?
Maxim Reshetnikov: The draft law, which the Government supported today, is addressing two issues. First of all, we are improving our migration legislation and enhancing the country’s attractiveness for those who have a desire to come to Russia and can create new jobs and are ready to invest here. And secondly, we are making our investment climate more attractive because there is a demand for this tool: over 20 countries have approved the granting of residence permits for investment. This topic has been discussed for a long time now, and as a result we have coordinated all the relevant positions. The draft law has been submitted to and supported by the Government.
This is the next step we have taken to improve our migration legislation. Before that, we approved a simplified procedure for granting residence permits to skilled professionals and university graduates with honours diplomas. Now investors can make use of this opportunity as well.
What exactly have we simplified?
As of now, it takes 18 months to receive a residence permit: six months to receive a temporary residence permit, which is effective for a year, following which the permit holder may apply for a permanent residence permit. This procedure has been cancelled, and now they will be able to immediately apply for permanent residency.
What are the benefits of a permanent residence permit? It actually gives the permit holders the same rights as those enjoyed by Russian citizens, with the exception of the right to take part in elections, serve in the army, and several other instances. In other words, the permit allows the holders to work in Russia, start a business across Russia rather than in the region where they received the permit, and to have access to all the social services. Consequently, the holders of the residence permit will have to pay taxes and will become tax residents of the Russian Federation. This is a balanced system.
The main subject which we paid much attention to and which we will have to keep working on is the reference point, namely the minimum volume of investment for getting a residence permit.
As of now, we are considering 30 million roubles. It is the basic sum we are discussing with businesses and our colleagues from other federal ministries. These 30 million roubles can be invested in two ways. Investors can create a company and invest in it, but we must be confident that the 30 million roubles have been invested in fixed assets and in the creation of jobs. One of the additional parameters we are discussing is the creation of additional jobs. This is the first option. The second option is to invest in real estate. The figure we are discussing is the same, 30 million roubles, but it should be long-term investment in Russian real estate.
We hope that the State Duma supports this draft law after its reading and that this decision will be formalised in a Government resolution so that the new mechanism can come into effect. We hope that the draft law will be adopted already during the spring session and we will be able to apply it next year. Just the other day we discussed this innovation with European businesses, which have a positive attitude to it.
Of course, there will be no restrictions regarding the home country of foreign investors. We will be happy to welcome everyone. This mechanism fits in with our agenda for the gradual expansion of opportunities for attracting investments and opening up the country to foreign investors and technologies.
Question: Leyla Khamziyeva, RIA Novosti. The President delivered his address yesterday. Can the measures outlined in it influence your assessments of economic growth this year and over a period of the next few years, as well as investment activity?
Maxim Reshetnikov: We have approved the scenario conditions which we will use to draw up the budget, and which the regions and municipalities use as well. In other words, the budgetary process has been launched and the scenario conditions have been set out, but the Presidential address will definitely influence some of the parameters.
I am referring above all to the following two parameters. First, the assessment of people’s real disposable incomes in light of the large-scale programme of additional payments that has been announced. It includes both long-term systemic measures and short-term ones, that is, one-off benefits to be paid this year. Of course, we will take this into account when finalising the financial outlook, which will be used as the basis of the budget. These measures will have a short-term effect. A long-term effect is related to investment. We will need more time to assess this factor, because the amount of allocations made public is quite substantial. I would like to remind you that they include 500 billion roubles in infrastructure budgetary loans for the regions, and another 400-450 billion roubles to be allocated for the substitution of the regions’ debts, including commercial and treasury ones. Therefore, the regions will have more free funds, and the use of these funds will be linked to investments as well.
Why do we need more time to assess the influence of these measures on the economy? Everything will depend on the quality and progress of the regions’ projects, on the level of their implementation. It is one thing to have an idea, even if it’s a good one, which you still need to elaborate, prepare project documentation, send them for examination, and so on. And it is quite another matter when a project has already been launched but is short of funds or can be launched with proper financing. This is a different situation; it concerns projects that have a quick economic effect.
We will now start working energetically with the regions to determine the conditions for implementing this programme. We are already discussing this with the Finance Ministry, and we will also discuss the matter with the regions. As you may be aware, the President has announced a meeting of the State Council on inter-budget relations. Of course, we will submit all our main decisions for the council’s consideration and discussion. At the same time, we will start monitoring the readiness of projects. Based on the results, we will adjust our forecast on additional investments in the economy this year, in 2022, in 2023 and subsequent years. We will also coordinate these efforts with the instructions regarding the National Wealth Fund. The President has mentioned some of possible facilities in his address. We are working on the required financial and economic models and using a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis technique to assess them. There are also other targets for analysis.
