Moscow: a city for business 17 May 2018, Prague “FOR INDUSTRY 2018” Exhibition Seminar: "Support and opportunities for cooperation of Czech trade and industrial companies with partners from CIS countries“

1st place USD15.3bn Moscow today International centre for business and commerce Moscow has a stable investment growth: . proximity to core consumer markets in Russia, Eastern Europe, CIS countries and the Baltic USD34.3bn . Top-10 global business hubs: more than 60% of the world’s biggest international companies have offices in Moscow fixed capital investments in 2017 12% of total investment in fixed assets in Russia growth of investments in fixed assets is more than 1,7 times for 7 years . 90% of HQs of foreign banks working in Russia and of international financial institutions >50% of all foreign direct investment in Russia USD244bn in total accumulated foreign direct investment (as of 1 October 2017) . approximately 1.0 m legal entities, 15% of the overall number of companies registered in Russia Leader in public-private partnership (PPP) development USD15.3bn 1st place signed agreements on public-private partnership (PPP) projects (2013–2017) in PPP development ranking in Russia (in 2016 and 2017)

Dynamics in the key investment climate and potential rankings Doing Business ranking (for Russia, the Moscow share of values is 70%) National Investment Climate Index 85 regions 190 countries 190 countries 189 countries 35 3 40 85 regions 189 countries 183 countries 51 10 62 76 regions 123 13 2010 2014 2015 2016 2017 2015 2016 2017 Рейтинг Global Cities Outlook (AT Kearney) Рейтинг European Cities and Regions of the Future (FT - fDi Intelligence) 301 cities 10 6 294 cities 35 468 cities and regions 12 49 >25 2015 2016 2017 2014/2015 2016/2017 2018/2019 2016 Городское агентство управления инвестициями

Why Moscow? USD34,8bn >70% 54km >400km >300 +54km 2017-2032 Large-scale development programmes Large-scale development programmes USD34,8bn Targeted Investment Programme (TIP) in 2017–2020 >70% of TIP expenditures go toward developing the transport infrastructure The relocation programme is Moscow’s large-scale infrastructure project for developing the city infrastructure and public spaces, reducing the number of unfit residential buildings, and improving living conditions for residents of five-storey buildings by gradually re-settling them in modern new housing built using state-of-the-art urban standards and approaches. By 2020, Moscow will have completed construction on: >400km of new roads 54km Metro stations Investment: USD60bn Timeframe: 2017-2032 The relocation programme will be financed from the Moscow treasury. To that end, the Moscow Government has established a Moscow Housing Relocation Fund. This is a comprehensive programme stimulating development and attracting private investment into various sectors of the city’s economy. >300 social infrastructure facilities schools, outpatient clinics, pools, etc.) +54km of surface Metro

2,130,000 sq.m 596,7 ha Moscow’s appeal for new investments Convenient conditions for doing business Extended investment infrastructure • over 20 prepared land plots for launching production (over 60 ha in size) • over 8,000 ha of industrial areas One of the leaders in the rating of Russia’s investment climate Leader of national ratings: • development of PPP • transparency of state procurement 30 technoparks and technopolises 2,130,000 sq.m of premises 596,7 ha of land plots The number of technoparks in the city is rising, as are the opportunities for locating new projects on special sites with an extended infrastructure of business support.

Moscow Government support Stable budgetary policy Active investment policy: . Creating favourable conditions for attracting investment from various sources USD27bn 1.1% of GRP – low level of state debt Moscow budget in 2016 . “One-stop-shop” project-assistance service USD122bn . Attracting projects of sectoral leaders and international companies; developing public-private partnership Moscow’s projected 2018–2020 budget . Investment-orientated budget: 36% allocated as investment expenditures Quality investment and business climate: . Tax benefits and reduced ground rent rate offered to investment and priority projects Since 2011, Russia* has gone up 85 places to 35th place in the World Bank’s Doing Business Ranking. . Additional guarantees for investors; protection against non-commercial risks * - 70% of Russia’s total indicator depends on Moscow’s figures

Purposes for supporting new investment projects 1. Stimulating launch of new investment projects in creating industrial production units. IPP status can be granted to the following investment projects: . for creation, modernization and (or) mastering of the manufacture of industrial products*; 2. Creating favorable conditions for manufacturing products with high value added and export potential in Moscow. . for creation of an industrial complex; . for creation of an industrial park; 3. Developing the city’s innovative and industrial infrastructure through increasing the number of technoparks and industrial parks. . for creation of a technopark; . projects carried out on concession agreements and PPP agreements; Support from the Moscow Government is being carried out by granting the status of an investment priority project of the Moscow City (hereinafter, IPP). IPP status allows investors to receive regional tax relief and benefits related to lease of land plots. The tax burden reduction can be up to 25%.

Investment priority projects Where to invest? Investor benefits: Industrial complexes Technoparks Industrial parks Investment priority projects Profit tax by 26% (12.5% instead of 17%) Property tax by 50% Property tax by 100% Land tax by 80% (20% of tax charged) Land tax by 99% (0.7% of tax charged) Ground rent rate by up to 80% Ground rent rate by up to 99% Priority areas for attracting private investment are: . guarantee of protection against non-commercial risks . possibility of obtaining land plots without a tender . long-term government contracts . low-interest loans (5% interest rate for up to 5 years, between USD 171 and 857 thousand) . targeted subsidies (partial reimbursement of business expenditures) . sureties not in excess of 70% of the total surety required

Special Economic Zone “Technopolis “Moscow” 47% Profit tax rate – 0% Transport tax rate – 0%* decrease in regional tax burden Property tax rate – 0% Land tax rate – 0%* Free customs area 5sites 207,5 ha total area Discounted buyout of land lots Discounted lease of land lots Free of charge connection to utilities Current opportunities of SEZ for localization Green-field projects Brown-field projects Existing manufacturing, laboratory and office sites of SEZ: 18 372.900 m2 area Technopolis Moscow vacant land plots 0,35 to 8,91 ha Alabushevo (Zelenograd) 23.700 m2 area Alabushevo (Zelenograd)

Development of public-private partnership mechanisms >11 1 place billion EUR 787.5 billion RUB 1 Place PPP development ranking among Russian regions 3 place 13 place Volume of PPP project contracts in 2013 – February 2018. 2013 2015 2017 Concession projects - 930 million EUR (65 billion RUB) North alternate route for Kutuzovsky Prospekt; Medical projects. Life cycle contracts – 5.6 billion EUR (394.5 billion RUB) for metro and land transport rolling stock supply and maintenance. Long-term contracts with an investment component – 3 billion EUR (213 billion RUB) management of MCC transport operation; supply contracts with investment obligations imposed on the supplier; removal and recycling of waste. Real estate leasing with investment obligations - 64 million EUR (4.5 billion RUB) preferential leasing programs: "Doctor Next Door", private education facilities, cultural heritage items. Corporate form of PPP - 1.6 billion EUR (110.5 billion RUB) construction of transfer hubs NATIONAL INFRASTRUCTURE AWARD ROSINFRA Top-3 Moscow City Investment Agency in "Qualified customer" nomination of ROSINFRA rating 2016 Городское агентство управления инвестициями

Long-term government orders in exchange for investment (offset contracts) Investor benefits: Strong demand for products Moscow's public procurement – 7,9 billion € (550 billion RUB) per year Long-term guarantee of demand from the Government of Moscow Term of contract: up to ten years Prompt resolution of land issues Allocation of a land plot without an auction Conditions for investors: Amount of investment in manufacturing > 14,3 million € (1 billion RUB ) Products manufactured and supplied Products of Russian origin Priority areas for offset contracts: Medicines and medical devices Public transport vehicles) Utilities equipment/vehicles Equipment/machines/facilities for Moscow Housing Relocation Programme Computer&Telecom equipment

Thank you for your attention Evgeny DRIDZE Deputy Head of the Department for External Economic and International Relations of Moscow Contact Details: Phone: +7 (495) 633-68-66 E-mail: dvms@mos.ru www. dvms.mos.ru