Territory of priority social and economic development Naberezhnye Chelny

Territory of priority social and economic development (TPSED) - is a part of the RF territorial entity. It includes closed administrative territory with special legal status of business activityestablished in compliance with the RF Government decision to form a beneficial environment for investments into the territory, accelerated economic growth and most livable conditions. It has beenestablished for the period of 10 years

Legal and regulatory framework Federal Act No 473 of December 29, 2014 “On Territories of priority social and economic development in the Russian Federation”; Russian Government Decree No 614 of June 22, 2015 “On characteristics of priority social and economic developmentterritories on RF mono-industry municipalities (towns)”; RF Government Decree No 44 of January 28, 2016 “On the territories of priority social and economic development of Naberezhnye Chelny establishment”; RT Cabinet of Ministers’ Decree No 61 of February 04, 2016 “On adoption of the agreements conclusion procedure for the activity on the territory of priority social and economic developmentestablished in the Tatarstan mono-industry municipality”.

Legal entity registration on the territory of the city; Not underreorganization, liquidation or bankruptcy processes; Notaxes, charges or insurance payment to budget funds in default and other tax liabilities; No branches or representations outside TPSED territory; Activityand investments carried out within TPSED, including capital investments. Requirements to the TPSED residents:

Requirements to investment projects: Implementation within the mono-industry city of Naberezhnye Chelny; The list of approved types of economic activity; Jobs creation: -for new companies (no less than 20 jobs during the first year of the project implementation). No less than 30 jobs during the whole period of implementation; -for operating companies (no less than the average staff number for the last 3 years). Capital investments volumeshall be no less than 5 million rub during the first year after incorporation. And no less than 50 million rubduring the whole period of implementation. Foreign labor power intake in the amount not exceeding 25% of the whole staff number.

The list of economic activities subject to special legal business activity status: 1.Plant and animal production, hunting and respective services in this area provision. 2.Fishing and fish farming. 3.Food industry. 4. Beverages, spa and mineral waters and other drinking water in bottles production. 5. Production of textile items. 6. Production of clothes. 7. Leather and leather items production. 8. Wood processing and production of wood and cork items (except furniture),straw items and weaving materials.

The list of economic activities subject to special legal business activity status: 9. Paper and paper itemsproduction. 10. Printing and copying of recorded media. 11. Production of chemicals and chemical products. 12. Production of medicines and items used for medical purposes. 13. Production of rubber and plastic items. 14. Production of other non-metal mineral items. 15. Metallurgical production. 16. Production of fabricated metal items (except machinery and equipment). 17. Production of computers, electronic and optical devices. 18. Production of electrical equipment.

The list of economic activities subject to special legal business activity status: 19.Machinery and equipment production, not included into other groups. 20. Production of motor vehicles, trailers and semi- trailers (except trucks). 21. Production of other means of transport and equipment. 22. Production of furniture. 23. Production of other finished items. 24. Publishing activity.

Special legal status of business activity : Name of tax TPSEDwithout TPSED Income tax,incl.5 % -12 %20% The Russian FederationThe first 5 years - 0 %The second 5 years - 2 % 2.0% The Republic of TatarstanThe first 5 years - 5 %The second 5 years - 10% 18.0 % Land taxMunicipality0%1.5 % Property Taxof Tatarstan companies 0%2.2% Insurance premiums in the off budget funds The Russian Federation, incl.: 7.6 %30% Pension Fund6.0%22.0 % Social Insurance Fund1.5 %2.9 % MandatoryHealth Insurance Fund 0.1 %5.1%