Russia launches Investment Protection and Promotion Mechanism (IPPK)

In conditions of high uncertainty, an additional incentive for investment and the implementation of investment projects is the restart of the investment protection and encouragement mechanism (IPP). The relevant law was signed by the President of the country this week.

“For investors who have concluded an SZPK, the law guarantees the non-application of legislative acts that worsen the conditions for investment activities for 3 years. Stabilization is envisaged for all acts of tax legislation and measures of state support for up to 20 years,” the minister said.

The minister emphasized that the proposal of the Republic of Tatarstan regarding the recognition of borrowed funds as capital investments was taken into account in the law.

When concluding an SZPK, it is possible to reimburse part of the investment costs for creating infrastructure, paying interest on loans, paying coupon income on bonded loans in the form of subsidies or tax deductions.

In addition, tax monitoring of SZPK projects is being introduced, which will eliminate inspections and reduce the administrative burden on businesses.

Currently, the Ministry of Economic Development is considering 7 applications from republican enterprises for the conclusion of a SZPK in the field of digital technologies, chemistry and petrochemistry.

“Relaunching the SZPK mechanism will create more comfortable conditions for long-term investment planning and ensure the effectiveness of state support measures,” said Midkhat Shagiakhmetov.