its innovation incentive into legal form by introducing the Law on the
Innovation Center Skolkovo (FZ # 244 dated 28.09.2010) (the Law) and the Law on
the Amendments in connection with the Law on the Innovation Center Skolkovo (FZ
№ 243 dated 28.09.2010) (the Law on amendments). The Skolkovo project is
of particular interest for investors, as innovations play an important role in
the successful business. What are the most interesting
provision to be examined in the Laws? Primarily:
activities that can be exercised by the projects participants;
set forth to project participants;
activity of foreign citizens;
tax and accounting issues.
What types of activities can be exercised by project
provides that Skolkovo participants can exercise only research activities.
Meanwhile, research activity includes not only research and development but
also results commercialization. It should be taken into consideration that
research activity can be exercised in the following directions:
and energy saving including development of innovative energy technologies;
primarily in the sphere of telecommunications and navigation systems (including
establishment of the corresponding terrastrial infrastructure;
in the sphere of equipment and drugs development
development and software
The control over
the research activity will be exercised by a special Managing Company, which
will be created with the participation of the Russian government.
What requirements are set forth for project participants?
Under the Law,
a project participant is a legal entity established in Russia exclusively for
the purpose of exercising research activity described above. Also it is
necessary to obtain a project participant status, that is to say, to be
included in the special register that is kept by the Managing Company. Four
conditions should be satisfied:
a legal entity is
establshed in conformity with the Russian legislation;
executive body and other bodies and persons entitled to act without a power of
attorney on behalf of the entity, are constantly located on the territory of
documents of such a legal entity provide that only research activity can be
a legal entity undertakes
an obligation to exercise only research activity in accordance with the Law and
Project Rules, that are to be approved by the Managing Company.
foreign investor can use an "entity participating in the project
implementation" concept, that is to say, legal
entities (not only Russian) can participate in project implementation on the
basis under agreements concluded with the Managing Companies or a project
participant. But it should be repeated that in order to obtain the project
participant status itself, a foreign investor should establish its Russian subsidiary
Managing Company: what does it mean?
Company is a legal entity which is granted vast powers
by the Russian Government. Each project participant or other entities
which are connected with the Center, will have to cooperate with it.
Among its functions are the following:
general control over
and coordination of activities;
infrastructure on the Center territory;
defined by the Law;
Also, it is the
Managing Company that will approve the Project Rules which
will clarify the specific details of the Project activities.
What is the procedure for foreigners to work in
to ease the process of engaging foreign labor force. Let us consider the
process in brief.
First of all, two
main exceptions are set forth in this respect for the Project:
-there is no necessity to obtain permits in state bodies -
invitations and permits are obtained through the Managing Company or its
-there is no need to receive special quotas for hiring
foreign employees as opposed to the standard procedure.
permits term should not exceed the term of the labor or civil works agreement
under which a foreigner will work in the Center. The maximum term is three
years since the date of arrival in Russia, but that term can be prolonged every
Due to the fact that Skolkovo is inseparably concerned with active
construction activities with regards to infrastructure objects, it is necessary
to have a look at the particularities of construction on the Skolkovo
territory. The preparation and approval of the General Plan, rules of
development and land usage are within the competence of the Managing Company.
There is no state examination of the project documentation of the capital
construction objects, construction and capital repairs of which are to be
undertaken in Skolkovo, as well as of the engineering results. Instead this examination
is to be conducted by the Managing Company. Also the forms of
permission and commissioning certificates will be approved by the Managing
What about tax and customs
privileges? What will be the impact on the accounting issues?
The Law provides for reimbursement of the paid customs duties by
providing subsidies under the following conditions :
duties were paid for
the goods, imported
§ for the purposes of construction of the Skolkovo
objects as well as for furnishing them with equipment;
§ for the purposes of exercising research activity;
the Managing Company
submitted to the competent authority all the necessary information in the
written form ( goods nomenclature, their quantity, cost and entities which
As an example one another favorable provisions, we can cite the
tax-exemption for the companies with project-participant status. Under article
145.1 of the Russian Tax Code there is no obligation to pay taxes within
ten-year period since acquiring the project-participant status. But there is an
obligation for a project participant to submit the following document to the
the exemption right (the extract from the accounting books).
The are two conditions under which the exemption can expire:
the annual turnover exceeds
1 billion roubles;
the loss of the
In cases where the annual income of project participants does not exceed
1 billion roubles, there is no reporting
For sure, the institution of the special innovation legislation is
favorable in terms of research activity as well as commercialization of its
results. The high-tech market participant should pay attention to the Project
Rules (to be soon approved by the Managing Company). In fact, Skolkovo is
planned to be "a state within a state". Nevertheless, the intentions
of the Government themselves are not enough for innovation,
it is necessary to attract hi-tech companies to invest and to participate in
the Project. That is why the Law provided certain privileges for those who are willing
to be an investor in the Russian innovation sphere. In the coming years we’ll
be able to judge on the efficacy of the proposed mechanisms.