Russia To Build Ten Industrial Technology Parks In The Far East By 2030

The Russian government is to build at least 10 Industrial and Technology Parks in the Far East and the Russian Arctic by 2030, the Kremlin said on Tuesday (November 4). Instructions were issued by the President, and read “To the Russian government: Taking into account previously issued instructions, ensure the creation by 2030 in the Far Eastern Federal District and the land territories of the Arctic zone of Russia of at least 10 industrial parks, technology parks and business parks to accommodate small and medium-sized businesses carrying out production activities in the areas of national technological priorities, as well as companies included in their supply chains.”

The Russian Far East is part of North Asia. It is the easternmost part of Russia and the Asian continent, and is coextensive with the Far Eastern Federal District, which encompasses the area between Lake Baikal and the Pacific Ocean. The area’s largest city is Khabarovsk, followed by the major Vladivostok sea port. It shares land borders with China, and North Korea to its south, as well as maritime boundaries with Japan to its southeast, and with the United States along the Bering Strait to its northeast.

The types of Parks mentioned typically provide investment incentives, offering land use and utilities at attractive rates, in addition to sought after income tax breaks. These are likely to offer similar rates as per the example of the expanding Kulibin Industrial Park in Nizhny Novgorod, where preferential terms reduce income tax rates for its residents from 25% to 2% for the first five years after receiving their first profit, to 5% for the next five years, and 14.5% thereafter. It also provides 0% rates for property, land, and transport taxes. The standard corporate income tax rate in Russia is 25%.

Industrial and Technology Parks concentrate businesses from a specific industrial sector, and provide supporting science and research facilities, often in cooperation with Universities. They provide for fast new tech cooperative development and are increasingly being implemented in Russia as well as China, where their use has underpinned much of the PRC’s recent tech development.

There have been on-going discussions between the Russian and American Presidents concerning US investment into the Russian Far East, mainly in the mining sector and especially in the rare earths and LNG industries. Early discussions have also been held about the potential for building a Bering Strait Tunnel. The availability of established Industrial Parks throughout the Russian Far East would make regional foreign investment attractiveness much higher. Russian companies too, would also be looking to invest as many have pulled investments from overseas and are looking to domestic Russian opportunities for returns.

Obvious opportunities here exist with Russia’s expanding infrastructure developments with China as well as a State Policy of improving trade capacity between the Russian Far East, and Southeast Asia.