#1UNIVERSITY OF TURKU Saint Petersburg and the Leningrad region - slide package for a foreign investor pan-european institute Elias Kallio October 2019 3 Q 1#2Contents 1. General information 2. Regional economy 3. Prosperity and consumption 4. External economic relations 5. Business environment 6. Additional information The information in this document is compiled from a variety of sources. The Pan-European Institute assumes no responsibility for the completeness or accuracy of the information. UNIVERSITY OF TURKU pan-european institute 3 6 19 23 34 38 2#31. General information a) Geographical location Lappeenranta FINLAND REPUBLIC OF KARELIA Petrozavodsk (420 km) Distances from Saint Petersburg to some European capitals: Helsinki 300 km Vibaro LAKE LADOGA North $18 Primorsk Zelenogorsk Tallinn 320 km Riga 490 km M18 Moscow 630 km St. Petersburg Vilnius 660 km Minsk 690 km South Stockholm 690 km Pulkovo Airport ESTONIA M20 M10 Warsaw 1030 km Oslo 1090 km Berlin 1320 km Veliky Novgorod (200 km) Moscow NOVGORODSKAYA OBLAST London 2100 km ‣ Paris 2170 km PSKOVSKAYS OBLAST Pskov (290 km) UNIVERSITY OF TURKU Railway - Highway +- Airport Veliky Novgorod pan european institute 3#41. General information b) Basic facts Area (% of Russia's total) Population (% of Russia's total) Main cities (thousand people) Borders with Main industries Natural resources Leningrad region Saint Petersburg 1 439 km² (0.008 %) 5 383 890 (3.7%) Machine building, metallurgy, metal-processing, energy, food, chemical and petrochemical, light industry, construction Sand and gravel deposits, peat, clay, pebble, sandstones, loam Leningrad region 84 500 km² (0.5%) 1 847 867 (1.3%) Gatchina (93.7), Vyborg (76.4), Sosnovy Bor (68.3) Finland, Estonia, St. Petersburg, the Novgorod, Pskov, Vologda regions, Republic of Karelia Engineering, chemicals, forestry, agriculture, wood working, pulp and paper, food, fuel, non-ferrous metallurgy and power Forest, bauxite, slate, limestone, phosphorite, clay, granite, gravel • St. Petersburg is second densest populated Federal subject after Moscow out of 85* Federal subjects UNIVERSITY OF TURKU pan european institute *the international community does not recognize Crimea and City of Sevastopol as a part of Russia#51. General information c) Population and labor force (at the end of the year) 2014 2015 2016 2017 City Region City Region City Region City Region City 2018 Region Population (thousand) Population change from previous year (%) Development of labor force - economically active population (thousand) 5 192 1 776 5 226 1 779 5 282 1 792 5 352 1 814 5 384 1 848 - 0.7 0.2 1.1 0.7 1.3 1.2 0.6 1.9 2 846 913 2 905 917 2 971 922 2 991 943 3 010 930 Of which unemployed (thousand) 39 43 62 49 50 44 50 45 45 40 Level of unemployment (ILO definition, %) 1.4 4.5 2.1 5.1 1.6 4.6 1.7 4.6 1.5 4.1 Number of pensioners (thousand) 1 409 484 1 443 497 1 481 512 1514 524 1 548 536 8% • Both, St. Petersburg and Leningrad region are doing quite good St. Petersburg is even having a constant labor shortage • Unemployment rate 6% 5.6% 5.2% 5.5% 5.2% 4.8% • Both regions are constantly developing and new districts are build in Leningrad region, because the city of St. Petersburg is running out of space 5.1% 4% 4.5% 4.6% 4.6% 4.1% 2.1% Leningrad region is also the only Federal subject out of 85* subjects, which government is completely located on a territory of another one 1.6% 1.7% 2% 1.4% 1.5% St. Petersburg Leningrad region Russia 0% UNIVERSITY OF TURKU 2014 2015 2016 2017 2018 *the international community does not 5 Petrostat 2019, Rosstat 2019, recognize Crimea and City of Sevastopol as a part of Russia pan-european institute#62. Regional economy a) Saint Petersburg and Leningrad region in the economy of Russia in 2017 Saint Petersburg Leningrad region Value Share in Russia's total Value Share in Russia's total GDP (billion €) 58.2 5.1 % 14.6 1.3 % Economically active population (thousand) 2 991 3.9 % 943 1.2 % Retail trade (billion €) 20.1 4.5 % 5.6 1.2 % Investment in fixed capital (billion €) 10.2 4.2 % 5.1 2.1 % FDI (billion $) 5.9 3.9 % 5.3 3.5 % Exports (billion $) 21.8 6.2% 6.0 1.6% Imports (billion $) 22.9 9.6% 3.4 1.7 % Enterprises (thousand) 329.9 8.7 % 25.2 0.7% • • In St. Petersburg all indicators are larger than in Russia on average per capita; in Leningrad region everything except number of companies, economically active population and retail trade are larger than in Russia on average per capita Import to St. Petersburg is almost three times larger than Russian average per capita UNIVERSITY OF TURKU pan-european institute Petrostat 2019, Central Bank of Russia 2019 Rosstat 2019, Rustat based on data from Russian customs 2019 6#7%-change from previous year 2. Regional economy b) GDP of Saint Petersburg and Leningrad region 30% 25% 27.3% 20% GDP of Saint Petersburg, Leningrad region and Russia, bn € 21.7% 20.8% Year Saint Leningrad Russia 18.5% 18.7% Petersburg region 2013 58.2 16.0 1 277.8 11.1% 9.4% 2014 51.9 13.8 1 161.7 8.2% 7.9% 8.2% 2015 49.6 12.5 965.9 || 5.3% 5.5% 5.4% 2016 49.1 12.3 933.9 2017 58.2 14.6 1 136.3 2015 2016 2017 -1.0% -3.3% -4.4% -1.6% 15% 9.3% 10% 8.4% 6.8% 5% 3.6% 2.6% 2.2% 1.0% 0% 2013 2014 -5% -4.2% -10% -15% -20% -10.8% -13.8% -9.1% -9.4% -16.9% St. Petersburg RUB ■Leningrad region EUR UNIVERSITY OF TURKU ■St. Petersburg EUR Russia RUB pan-european institute Leningrad region RUB Russia EUR Because of Ruble's devaluation the GDP development in RUB and EUR differs radically The one in EUR describes the development of real GDP and purchasing power more adequately 7 Petrostat 2019, Rosstat 2019, Statista#82. Regional economy c) Structure of GDP in 2017 Saint Petersburg Others 36% Electricity, gas and water 4% Construction Manufacturing activity 17% activity 5% Transport and communications Real estate, renting 11% 10% Wholesale and retail trade 17% Agriculture, hunting and forestry 5% Electricity, gas and water 6% Others 16% Construction activity 10% Transport and communications 14% Leningrad region Manufacturing activity 30% Wholesale and retail trade Real estate, 12% renting 7% • Because of small amount of natural recourses in both regions, manufacturing and high value added economic activity is more advanced than in many other Russian regions UNIVERSITY OF TURKU pan european institute Petrostat 2019, Rosstat 2019#92. Regional economy d) Investment potential ranking (out of 85* Russian regions) 2017 2018 SPb LR SPb LR Ranking of investment potential 3 23 3 24 Labor potential 3 27 3 26 Consumption potential 3 26 3 25 Production potential 2 20 2 22 Financial potential 3 23 3 22 Institutional potential 2 24 2 33 Innovation potential 3 37 3 28 Infrastructure potential 6 10 6 10 Natural resource potential 85 48 85 48 Tourism potential 4 26 3 25 Ranking of investment risk 9 2 10 4 • After Moscow, St. Petersburg is the leading economic center of Russia Areas of Leningrad region that are located close to St. Petersburg also benefit from this UNIVERSITY OF TURKU *international community does not recognize Crimea and the City of Sevastopol as a part of Russia pan european institute RA Expert 2019 Saint Petersburg = SPb Leningrad region = LR#10%-change from previous year 2. Regional economy e) Development of investment in fixed capital 45% 35% 25% 15% 5% 3% 24% 10% 13% 42% -5% 2015 2016-1% 2017 -15% 22% Investment in fixed capital of Saint Petersburg, Leningrad region and Russia, billion € Year Saint Leningrad Russia Petersburg region 28% 2014 6.8 2.9 203.7 2015 5.4 3.0 154.2 2016 6.7 3.3 152.2 2017 7.6 4.7 186.0 4% 2018 7.9 6.0 183.9 2018-1% • -21% -25% -24% Saint Petersburg Leningrad region Russia UNIVERSITY OF TURKU pan european institute Both, St. Petersburg and Leningrad region, are constantly above the Russian average 10 Fedstat 2019#112. Regional economy f) Investments into fixed capital by sectors in 2017 Saint Petersburg Others 30% Construction 8% Electricity, gas and steam 10% Manufacturing activity 13% UNIVERSITY OF TURKU pan-european institute Real estate 26% Goverment and military 5% Leningrad region Others 11% Transport and communications 30% Real estate 12% Transport and communications 13% Electricity, gas and steam 20% Manufacturing activity 22% 11 Fedstat 2019#122. Regional economy g) Transport infrastructure Sea and • river transport • Airports • Saint Petersburg Leningrad region The territory of St. Petersburg and Leningrad region is the European gateway of Russia as well as a major destination and transportation hub for all the transportation modes St. Petersburg is Russia's largest sea and river port in the Baltic Sea The port complex includes: The Grand Seaport of St. Petersburg (freight turnover amounted 59.3 million tons in 2018), The Lumber port, river ports on Vasilievsky Island and in the Nevsky Freight District, port facilities in Lomonosov and Kronshtadt Passenger terminal on Vasilievsky Island (regular voyages to Estonia, Finland, Latvia, and Sweden) River ports: Leningradsky, Podporozhsky and Sviritsky The length of navigable waterways over 2 000 km The total length of all rivers 50 000 km Main rivers: Neva, Svir, Volkhov and Vuoksa Sea ports: Ust-Luga (98.7 million tons in 2018), Primorsk (53.5 million tons in 2018), Vyborg (1.9 million tons in 2018), Vysotsk (18.8 million tons in 2018) • The Baltic Sea is connected with the Black Sea through canals · Airport complex Pulkovo located 16 km south of Saint Petersburg and consists of 3 buildings, the newest one was built in 2013 Direct air links with most major countries and airlines Over 18 million passengers in 2018, the Pulkovo Airport is the 38th busiest airport in Europe UNIVERSITY OF TURKU pan-european institute 12#132. Regional economy h) Transport infrastructure and cargo volumes Saint Petersburg Railways 5 railway stations: Baltiyskiy, Finlandskiy, Ladozhskiy, Moskovskiy and Vitebskiy Highways · • Public transport Length of railways - 432 km Trains to the Czech Republic, Estonia, Finland, Latvia, Lithuania, High-speed trains to Moscow (4 hours) and Helsinki (3.5 hours) Length of roads - more than 3 000 km Connected to Estonia, Finland, Moscow, Murmansk and Pskov St. Petersburg Ring Road was opened in 2011, length – 142 km Western Rapid Diameter, a toll road, was opened in 2016, length - 47 km - Subway: 69 stations (124 planned), passengers in 2016 – 740 million Tramway system: length - 228 km, passengers in 2016 - 182 million Trolleybus system: passengers in 2016 - 143 million Bus system: passengers in 2016 - 450 million Leningrad region Main railway stations: Gatchina, Mga, Volkhovstroy and Vyborg Length of railways - about 2 250 km, railway density 33 km / 1000 km² Length of roads - over 22 000 km 15 federal routes, 5 of which are in the International E-road network Ongoing construction of the Moscow-Saint Petersburg motorway, length 684 km Suburban electric trains and buses to Saint Petersburg and within the Leningrad region A subway station located (Devyatkino) in the territory of Leningrad region, building one more station is in process 2017 Cargo volumes 2013 2014 2015 2016 City Region City Cargo traffic (million tons) 129.4 162.5 231.3 Region 50.3 City 236.4 40.5 41.8 Passenger traffic (million people) 1704.0 102.2 1647.0 108.7 1658.0 94.5 1678.0 91.9 Region City Region City Region 268.4 280.7 49.7 1682.0 88.7 UNIVERSITY OF TURKU =]] pan european institute 13 Petrostat 2019#142. Regional economy i) Development of industrial production %-change from previous year 20% 15% 10% 5% 8% 6% 0% -1% 2015 -1% 2016-2% 2017 -5% -6% -10% -9% -15% -20% UNIVERSITY OF TURKU pan european institute -10% 4% 1% 15% 3% 3% -0.3% 2018 -1% 2019 Saint Petersburg Leningrad region Russia 14 Fedstat 2019#152. Regional economy j) Development of industrial production 2015-2018 (percentage from previous year) 2015 2016 2017 2018 Industrial production Mining operations Manufacturing activity 92.7 City Region 93.0 99.6 83.1 129.6 98.7 Electricity, gas and steam 95.3 100.1 City Region City Region 103.9 103.7 105.7 100.7 105.1 143.9 53.5 106.3 97.8 101.4 103.7 105.5 105.8 105.7 104.8 103.2 94.8 City Region 105.0 115.4 101.6 105.2 104.0 101.5 109.6 · Water and waste disposal 95.5 98.3 104.4 106.4 110.1 109.6 111.1 114.8 UNIVERSITY OF TURKU pan-european institute 15 Fedstat 2019#162. Regional economy k) Development of prices* (percentage, end of the year) Development of consumer prices 120% 118% 116% 114% 112% 110% 108% 106% 104% 102% 100% 2014 2015 2016 Development of prices on industrial products* 120% 118% 116% 114% 112% 110% 108% 106% 104% 102% 100% 2017 2018 2014 2015 2016 2017 2018 -Russia --Saint Petersburg Leningrad region -Russia -Saint Petersburg Leningrad region UNIVERSITY OF TURKU pan-european institute *mining, manufacturing industries, gas, electricity, steam, air conditioning, water, supply water disposal, waste collection and disposal and liquidation of pollution *measured in RUB 16 Rosstat 2019, Petrostat 2019, Fedstat 2019#172. Regional economy I) Development of retail trade 25% 20% 15% 10% 5% 0% 1% 1% %-change from previous year 2014 2015 -5% -10% -8% -7% -8% 2016 -6% 22% 21% 18% Retail sales of Saint Petersburg, Leningrad region and Russia, billion € Year Saint Leningrad Russia Petersburg region 2013 21.7 5.9 559.4 2014 20.0 5.4 517.3 2015 16.8 4.6 404.4 2017 2018 2016 16.6 4.6 380.9 -3% 2017 20.1 5.6 451.1 -5% -5% 2018 19.1 5.5 426.5 -15% -20% -25% -16% 16% -22% ■Saint Petersburg Leningrad region Russia UNIVERSITY OF TURKU pan european institute 17 Petrostat 2019, Rosstat 2019#182. Regional economy m) Distribution of enterprises and organizations by ownership (percentage of total) 2013 2014 2015 2016 2017 City Region City Region City Region City Region City Region State- and municipal-owned 1.6 8.5 1.6 8.4 1.4 7.9 1.5 8.3 1.5 8.1 Religious and public 1.4 4.2 1.4 4.3 1.4 4.1 1.4 4.2 1.4 4.1 organizations Private 92.1 83.0 92.2 83.2 92.6 84.0 92.7 83.6 92.7 84.0 Public-private (without foreign 0.4 1.0 0.4 1.0 0.4 0.9 0.3 0.8 0.3 0.7 organizations) Foreign-owned 2.6 1.6 2.6 1.6 2.6 1.6 2.5 1.6 2.6 1.7 Jointly Russian and foreign- 1.7 1.3 1.6 1.2 1.5 1.2 1.5 1.1 1.4 1.1 owned Others 0.1 0.4 0.1 0.3 0.1 0.3 0.0 0.2 0.1 0.3 Total 354 312 38 040 357 124 37 893 374 986 38 286 355 758 37 130 345 277 36 028 UNIVERSITY OF TURKU pan-european institute 18 Petrostat 2019, Rosstat 2019#193. Prosperity and consumption a) Development of gross average wages, €/month Gross average wage, €/month 1,400.00 € 1,200.00 € 1,000.00 € 887 800.00 € 600.00 € 400.00 € 200.00 € 0.00 € 1329 1204 798 698 712 630 640 642 497 500 946 657 959 823 1109 813 588 594 494 496 576 587 • 2013 2014 ■Saint Petersburg 2015 Leningrad Region 2016 2017 2018 Russia Moscow Living standards in Moscow and St. Petersburg differ substantially from the rest of Russia UNIVERSITY OF TURKU pan european institute 19 Petrostat 2019, Rosstat 2019 1129#203. Prosperity and consumption b) Main socio-economic indicators of living standards, €/month Saint Petersburg -Per capita income (€/month) -Minimum subsistence level (€/month) Leningrad region Per capita income (€/month) Minimum subsistence level (€/month) 1,000.00 € 881 900.00 € 798 800.00 € 700.00 € 1,000.00 € 824 900.00 € 813 800.00 € 698 642 657 700.00 € 630 600.00 € 600.00 € 588 576 497 484 500.00 € 500.00 € 400.00 € 400.00 € 300.00 € 300.00 € 182 173 179 161 200.00 € 154 163 200.00 € 159 142 153 132 130 144 100.00 € 100.00 € 0.00 € 0.00 € 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 UNIVERSITY OF TURKU pan-european institute 20 Petrostat 2019, Rosstat 2019, Fedstat 2019#213. Prosperity and consumption c) Number of passenger cars per 1000 persons 350 330 322 310 299 300 298 295 296 294 294 291 289 290 270 283 321 321 309 307 306 305 302 301 250 2014 2015 2016 2017 ■Saint Petersburg Leningrad region ■Russia ■Moscow UNIVERSITY OF TURKU pan european institute 2018 296 21 Petrostat 2019, Rosstat 2019#223. Prosperity and consumption d) Average apartment size (square meters per person) 30 28.4 27.1 25.7 24.5 24.9 24.9 25.2 24.4 24.3 25 23.3 23.4 23.7 23.6 22.2 21.4 20 20 Square meters 15 10 10 5 0 2013 UNIVERSITY OF TURKU pan-european institute 2014 2015 2016 Saint Petersburg Leningrad region ■Russia 2017 22 Petrostat 2019, Rosstat 2019#234. External economic relations a) Exports and imports, billion $ 40 35.8 35 30.8 30 25 22.2 22.4 20 15.8 15.8 15 13.6 10 5.1 4.4 5 0 2013 20.3 10.0 15.5 22.9 21.8 21.0 26.6 22.8 7.1 5.7 4.8 4.1 3.2 3.6 2.6 2014 2015 Exports of goods St. Petersburg Exports of goods Leningrad region 2016 2017 Imports of goods St. Petersburg Imports of goods Leningrad Region UNIVERSITY OF TURKU pan european institute 2018 23 Rustat 2019 based on data from Russian customs#244. External economic relations b) Share in Russia's exports and imports Share in Russia's exports Saint Petersburg Leningrad region Share in Russia's imports Saint Petersburg Leningrad region 14% 14% 11.7% 12% 12% 11.4% 11.1% 10.7% 10.1% 10% 9.6% 10% 8% 8% 6.1% 5.9% 6% 5.5% 6% 4.5% 4.6% 4.2% 4% 3.2% 4% 2.9% 2.6% 1.7% 1.6% 1.6% 1.6% 1.7% 2% 1.5% 2% 1.5% 1.6% 1.7% 0% 0% 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 • Both, the exports and the imports, are larger in terms per capita than Russian average UNIVERSITY OF TURKU 24 Rustat 2019 based on data from Russian customs pan european institute#254. External economic relations c) Exports by country in 2018 Others 39% Kazakhstan 3% Saint Petersburg Algeria 4% China 6% Belarus 6% UNIVERSITY OF TURKU pan-european institute Netherlands 26% Others 36% Germany 9% Leningrad region China 18% USA 7% Sweden 5% Finland 7% USA 6% Estonia 7% Netherlands 14% Denmark 7% 25 Rustat 2019 based on data from Russian customs#264. External economic relations d) Imports by country in 2018 Others 44% Saint Petersburg China 23% Germany 9% South Korea 6% Japan 6% Belarus 3% Finland 4% USA 6% UNIVERSITY OF TURKU pan-european institute Others 46% Leningrad region Germany 13% India 5% Taiwan 4% France 5% China 12% Finland 8% Italy 8% 26 Rustat 2019 based on data from Russian customs#274. External economic relations e) Export structure in 2018 Transport 3% Machinery, equipment and vehicles 4% Metals 6% Others 18% UNIVERSITY OF TURKU Saint Petersburg pan-european institute Mineral products (oil & gas) 69% Books, paper and cardboard 5% Plastics and rubber 7% Chemical products 11% Others 17% Leningrad region Mineral products (oil & gas) 59% 27 Rustat 2019 based on data from Russian customs#284. External economic relations f) Import structure in 2018 Others 45% Saint Petersburg Chemical products 7% Agricultural products 7% UNIVERSITY OF TURKU pan-european institute Machinery, equipment and vehicles 29% Others 33% Transport 12% Plastics and rubber 9% Leningrad region Agricultural products 10% Machinery, equipment and vehicles 35% Food, drinks and tobacco 13% 28 Rustat 2019 based on data from Russian customs#294. External economic relations g) Structure of all investments in fixed capital, percentage 2012 2013 2014 2015 2016 2017 City Region City Region City Region City Region City Region City Region Equity 44.3 16.9 47.2 22.9 42.9 35.2 50.0 36.7 64.2 41.8 57.4 30.4 Loans 13.1 20.0 14.7 27.0 15.8 19.5 7.7 14.6 5.2 10.6 6.6 12.5 Assets from 29.2 16.0 27.4 14.9 23.4 18.8 26.9 22.3 16.0 16.6 21.7 15.4 state budget Foreign assets 1.0 1.7 0.5 1.8 0.1 0.1 0.4 0.2 0.2 0.1 0.5 0.2 Others 12.4 45.4 Total (billion €) 8.8 8.3 11.2 10.2 33.4 6.0 17.8 26.4 15.0 26.2 14.4 30.9 13.8 41.5 10.3 3.3 7.1 3.3 9.2 3.6 10.0 5.1 UNIVERSITY OF TURKU pan-european institute 29 Petrostat 2019#304. External economic relations h) Development of FDI inflow, million 14000 13,058 12000 10000 8000 6000 4000 3,762 2000 0 2013 UNIVERSITY OF TURKU pan-european institute 7,912 7,509 7,632 4,746 3,423 5,775 5,869 5,289 2014 2015 ■Saint Petersburg 2016 Leningrad region 2017 6,467 4,823 2018 30 Central Bank of Russia 2019#314. External economic relations i) Share in Russia's total FDI, percentage Share in Russia's total FDI 10% 9% 8% 7% 6% 5% 4% 3% 6.7% 5.6% 5.4% 5.5% 3.2% 2.6% 2% 1.9% 1% 0% 2013 2014 2015 4.6% 3.9% 4.2% 3.5% 3.4% 2016 2017 --Saint Petersburg --Leningrad region. Shares of both, St. Petersburg and Leningrad region, are larger in terms per capita than Russian average UNIVERSITY OF TURKU pan european institute 2018 31 Central Bank of Russia 2019#324. External economic relations j) Foreign investment by country of origin in 2018 British Virgin Islands 2% France 2% Saint Petersburg Others 28% South Korea 3% Switzerland 3% Germany 4% Sweden 8% Netherlands Finland 5% 4% UNIVERSITY OF TURKU pan-european institute Cyprus 40% Uzbekistan 2% Austria 3% Kazakhstan 3% Germany 3% Finland 8% Others 21% Leningrad region Ukraine 8% Netherlands 12% Switzerland 22% 32 Central Bank of Russia 2019 Cyprus 19%#334. External economic relations k) Visitors in hotels and other accommodation services (thousands visitors) 6000 St. Petersburg 6000 5000 4000 3000 1,004 901 1,047 2000 1,278 5000 1,662 4000 3000 2000 3,349 2,498 1000 1,804 1,940 2,058 1000 0 2013 Leningrad region 37 55 17 27 29 603 486 334 343 333 0 2014 2015 2016 ■Foreign citizens 2017 2013 2014 Russian citizens 2015 2016 2017 ■Foreign citizens Russian citizens UNIVERSITY OF TURKU pan-european institute 33 Rostourism 2019, Petrostat 2019#345. Business environment a) Special economic zones in Saint Petersburg Total area 182.3 hectares (two sites): 40% . Noydorf 19.0 hectares ● Novoorlovskaya 163.3 hectares 35% Focus industries: 30% • Microelectronics 25% · Pharmaceuticals and medical 20% industries 20% • IT and telecom 15% • Energetics 10% • • Corporate income tax reduced to 15.5% . Incentives for resident investors: • Land tax exemption . Property tax exemption Transport tax reduced from 1-200 RUB/horsepower to 0 RUB/horsepower* • Customs free zone UNIVERSITY OF TURKU | pan-european institute *In Russia, the transport tax is determined by amount of horsepower in the car i.e. the engine's power 5% 2.2% 1.5% 0% 0% 0% 0% Profit tax (for the entire period of SEZ) General terms Property Tax (within 10 years from the date of registration) Terms of SEZ residents Land Tax (within 5 years. of the registration) 34 Russian Special Economic Zones#355. Business environment b) Some industrial parks of Leningrad region Ust-Luga Greenstate Distance to St Petersburg Specialization 130 km Enterprises, petroleum and petrochemical sectors 1.5 km Logistics, packaging, engineering, production of car parts, building materials and foodstuffs M10 1 km Multiprofile Fedorovskoe 2 km Enterprises Some examples of residents Producers of car parts, equipment and electronics, refiners of hydrocarbon Gorigo (logistics complex), Siemens TGT (production of gas turbines), Viking Life- saving Equipment and Ponsse (maintenance), Pit-Product (meat processing) John Deere (farm machinery), Sotrans (logistics, cargos), Tender (wholesale) Gelios (metal goods), Stillwood (furniture), Jotun (liquid and powdered paint), Lenprobeton (concrete products) Contact details http://www.ust-luga.ru/group/ulip/ https://www.yit-greenstate.com/en http://mcm10.ru/en/ http://fedorovskoe.pro/ UNIVERSITY OF TURKU pan-european institute 35 Investment portal of Leningrad region 2019#365. Business environment c) Automobile cluster in Saint Petersburg St. Petersburg is Russia's leading center for the automotive industry: • 5 plants, one more is being built Company Opened Annual production volume Value of investments Number of workers • 8 000 workers Toyota 2007 • Gross investment over 1 billion $ 50 000 - 100 000 $ 500 mn* 2 600 • More than 400 000 cars manufactured every year Nissan 2009 50 000- $ 420 mn 2 200 Other clusters 100 000 • Pharmaceutical and medical cluster Hyundai 2010 200 000 $ 450 mn* • Power engineering cluster MAN 2012 1 000 $ 110 mn 2 200 100 • Shipbuilding cluster • Radio electronics cluster • Aerospace cluster . ⚫ IT Cluster UNIVERSITY OF TURKU pan-european institute * converted from RUB on 2017 exchange rate 36 Expert online#375. Business environment d) 2018 FIFA World Cup in Saint Petersburg Saint Petersburg is one of the Russian cities which hosted the 2018 FIFA World Cup, including a semi- final match. Owing to this fact, Saint Petersburg and Leningrad region received funding by FIFA, as well as federal and municipal funding for implementation of infrastructure projects. Projects implemented: • • • Zenit Arena for 69 500 people for 1 billion € Pulkovo's new airport terminal for 1.2 billion € Development of Gatchina that was the place of accommodation for one of the teams Development of metro and commuter transport UNIVERSITY OF TURKU pan european institute 37#386. Additional information a) Consulates general (1/2) Country Armenia Azerbaijan Belgium Bulgaria China Cyprus Denmark Estonia Finland France Germany Greece Hungary India Israel Italy Japan UNIVERSITY OF TURKU pan european institute http://russia.mfa.am/ru/ Web page http://azconsulate.spb.ru/ https://russia.diplomatie.belgium.be/fr/ambassade-et-consulats https://www.mfa.bg/en/embassies/russiagc3 http://saint-petersburg.china-consulate.org/ http://www.mfa.gov.cy/mfa/consulate/consulate spb.nsf/cgsp04_en/cgsp04 en?OpenDocument https://rusland.um.dk/en/about-us/contact/ http://peterburg.estemb.ru/ https://finlandabroad.fi/web/rus/etusivu https://ru.ambafrance.org/-Consulat-general-de-France-a-Saint-Petersbourg- http://www.sankt-petersburg.diplo.de/Vertretung/stpetersburg/ru/Startseite.html https://www.mfa.gr/russia/ru/consulate-general-st-petersburg/ https://szentpetervar.mfa.gov.hu/rus http://cgispburg.gov.in/index.php http://embassies.gov.il/SPB/Pages/default.aspx http://www.conssanpietroburgo.esteri.it/ https://www.st-petersburg.ru.emb-japan.go.jp/itprtop ru/index.html 38#396. Additional information a) Consulates general (2/2) Country Kazakhstan Latvia Lithuania Norway Poland Romania Slovakia South Korea Spain Sweden Switzerland The Czech Republic The Netherlands The United Kingdom Turkey Ukraine UNIVERSITY OF TURKU pan european institute http://mfa.gov.kz/en/s-petersburg https://www.mfa.gov.lv/en/stpetersburg Web page http://consulate-stpetersburg.mfa.lt/ https://www.norway.no/ru/russia/norway-russia/consulate-general-st-petersburg/ https://sanktpetersburg.msz.gov.pl/ru/;jsessionid=7E583458EE63AD93EC09A26308B1C6B5.cmsap1p https://moscova.mae.ro/en https://www.mzv.sk/web/cgsaintpetersburg-ru http://rus-stpetersburg.mofa.go.kr/worldlanguage/europe/rus-stpetersburg/main/index.jsp http://www.exteriores.gob.es/Consulados/SANPETERSBURGO/ru/consuladoenruso/Paginas/default.aspx https://www.swedenabroad.se/en/embassies/russia-saint-petersburg/ https://www.eda.admin.ch/countries/russia/ru/home/predstavitelstva/botschaft/generalconsulate.html http://mzv.cz/ https://www.netherlandsworldwide.nl/countries/russian-federation/about-us/consulate-general-in-st.-petersburg http://ukinrussia.fco.gov.uk/ru/about-us/other-locations/st-petersburg-consulate-general/ http://stpetersburg.cg.mfa.gov.tr/Mission https://spb.mfa.gov.ua/ru 39#406. Additional information b) Some authorities The Governor of Saint Petersburg • Address: Smloniy • https://www.gov.spb.ru/governor/ The Regional Government of Leningrad region ● Address: prosp. Suvorovskiy, 67 http://lenobl.ru/ru/ Committee on External Relations of Saint Petersburg • Address: Smloniy http://kvs.spb.ru/ The Committee on Foreign Economic and Interregional Relations of Leningrad region Address: prosp. Suvorovskiy, 67 http://inter.lenobl.ru/ru/ UNIVERSITY OF TURKU pan european institute 40#416. Additional information c) Some useful links and business supporting services • • Baltic Rim Economies - https://sites.utu.fi/bre/earlier-bre-reviews/ Electronic Publications of the Pan-European Institute - https://www.utu.fi/en/university/turku-school-of- economics/pei/publications-and-reports American Chamber of Commerce in Russia - https://www.amcham.ru/eng • Association of European Businesses - https://aebrus.ru/en/ • British Chamber of Commerce in Russia - https://www.rbcc.com • Chamber of Commerce - http://spbtpp.ru/ • Foundation for Assistance to Small Business Lending - http://credit-fond.ru/ . Information and analytical resource on key indicators of investment attractiveness of St. Petersburg http://spbinvestment.ru/ru - • Unified Entrepreneurship Center - https://www.crpp.ru/en/aboutsenteren ● Public Council for Small Business Development - http://www.osspb.ru • St. Petersburg International Business Association - https://www.spiba.ru UNIVERSITY OF TURKU pan european institute 41