Udmurtiya Republic is one of the most progressive regions, with strong industrial traditions, well-developed transport infrastructure, beneficial geographical position, talented scientists, designers and engineers.
The leading global and Russian companies make high investments in the economy of Udmurtiya Republic: KIA Motors, Sinopec (China Petroleum and Chemical Corporation), Siemens, Fresenius, RosNeft, Mechel, RussNeft, TVEL.
Investment climate highlights:
Political stability
Proximity to the key industrial centres of the Urals
Unique base of natural resources, rich oil deposits, forest resources, well-developed agro-industrial complex
Modern transport infrastructure, free access to major air, railway, motor and river routes
High-performance complex of processing industries, metallurgy and machine building
Well-developed financial infrastructure, vast credit and leasing opportunities
Economic benefits for investors, assistance rendered to investors on behalf of regional, district and municipal authorities
High engineering and scientific potential, the leading national technical universities and research centres are situated in the republic
Stable economic growth over the past years
High social standard of living, high consumer demand for goods and services
Investment legislation
The government of Udmurtiya Republic has developed a regulatory framework aimed at stimulation of innovation and investment activities in the region and focused on attraction of investment in the economy of the republic. There have been designed special target programs to support the top-priority branches of industry (machine building and metalworking, textile, light and lumber industries) as well as investment and innovation activities and small business.
Republican target program “Creation of favourable conditions for investment attraction in Udmurtiya Republic in 2010–2014” has been designed. The program defines the most significant conditions needed to enhance investment activity in the republic and helps create a regional system of effective investment process management.
The law “On state support of investment activities in Udmurtiya Republic” was passed in 2006, granting to the investors:
income tax and property tax rebates
subsidies for partial reimbursement of credit interest rate given by commercial banks for investment purposes from the regional budget
deferring, instalment of tax credit, investment tax credit on tax payment and other obligatory payments, payable to the budget of Udmurtiya Republic
state guarantees
informational and organizational support to investors
The basic forms of state support, granted to potential investors, are income tax exemptions – 4%, property tax exemptions – 2,2%, partial reimbursement of expenses connected with service of commercial credits for investment projects implementation and leasing – 2/3 of the existing CB RF refinancing rate.
Much attention is paid to development of state investment and innovation infrastructure. The following organizations operate in the republic: Small Business Support Fund, Innovative Technology Centre and Regional Centre for Nanoindustry.
The State Register of Investment Projects is maintained in Udmurtiya Republic. One can find out more about the database of investment projects and grounds of the Republic on the interactive site http://udminvest.ru.
Udmurtiya Republic authorities pay much attention to fair and exhibition activities. In 2007 and 2008 Investment Forum took place in the region, hosting over 1,000 regional enterprises, banks, investment companies, representatives of science and business. Investment and innovation projects were presented within the framework of the Forum.
Monitoring of investment transactions
One-stop-shop principle is applied to the republican system of project monitoring. State and local authorities monitor the project on all the stages: from its of approval by the government institutions to the launch and operation of industrial facilities.
The Ministry of Economic Affairs of Udmurtiya Republic accumulates information about vacant investment grounds in all the cities and districts of the republic as well as about industries’ development projects.
Investment priorities
The priorities of Udmurtiya Republic Government’s investment policy are as follows: foodstuffs, conversion, subsoil use, fuel and energy, housing, transport, communications and informatics.
Through the past decades Udmurtiya has been closed for foreign partners. Today the Government of the Republic is doing a lot to overcome the consequences of such an artificial isolation, to develop international relations and integrate the region into the global economic environment.
Lately, Udmurtiya has become a lucrative region for foreign investment. For a great while, the foreign and Russian investors have been putting their money in manufacturing of bikes and automobiles, in oil and defense projects. At present, new opportunities have emerged – the market of IT-resources is growing day by day, being one of the most stable and promising ones.
The top-priority investment projects in Udmurtiya Republic are:
Construction of a bridge-crossing over Kama River near Kambarka town, total cost RUR 6.1 bln.
Reconstruction of the central square of Izhevsk, total cost RUR 2 bln.
The project of UdmurtLesProm-Holding JSC for building up production of prefabricated houses with capacity of 170,000 sq.m. of built area per year, total cost RUR 2.4 bln.
Project of GLK (ski resort) “Chekeril” Ltd. on creation of a modern recreation, sports and entertainment zone for the population of Udmurtiya Republic (ski resort, ski trails, horse-racing complex, motodrome, trap shooting range), total cost RUR 2.5 bln.
Project of the Izh-Auto JSC on organization of industrial car assembly of KIA Spektra, KIA Rio and KIA Sorento as a part of industrial development of the enterprise up to 2011, total cost RUR 3.8 bln.
Innovative projects of the Research Institute for Metallurgy Technologies JSC and NPIC “Kachestvo (Quality)” Ltd. in the field of nanotechnologies, total cost RUR 5.5 bln.
Projects of Finance and construction group “ART-TEC” Ltd.: 1. Construction of residential estate “Michailovsky”, class “Exclusive”, including the objects of commercial property situated at the ground floor, total cost RUR 2.5 bln; 2. Construction of Logistics Center, class “В”, to render services to non-food retail companies, total cost RUR 540 mln.
The priorities in industrial development are being identified with the assistance scientists, ongoing business and other interested parties. The Interagency Board on the priorities of industrial development has been established in the Republic. The main task of its working groups is to identify region’s industrial priorities and critical technologies. The following documents have been passed in order to specify the long-term strategy of industrial development: Strategy of sustainable development, Priorities in industrial development of Udmurtiya Republic till 2015, Critical technologies in Udmurtiya Republic.
Medium-term industrial policy is mainly focused on creation of dynamic and competitive industrial complex that would introduce innovations and provide integration of Udmurtiya Republic in today’s global economy. The dynamism of the enterprise as well as speed at which the innovations are developed and introduced in production play the decisive part for competitiveness of manufactured goods.
Udmurtiya can represent the interests of RF in a number of activities, including:
Development of Russian military industrial complex in Udmurtiya which is a unique complex combining scientific knowledge, applied R&D, technologies and design, batch production. The following items are manufactured in the region: missiles “Iskander”, “Topol”, “Medvedka”, “Tochka”, surface-to-air missile system “ТОР-MI”, Kalashnikov automatic rifles (AK), control systems and units for missile complexes of various classes, on-board radio-radar monitoring and control systems for space vehicle flights, mobile radiostations.
Machine tool building. High potential of machine tool building enterprises of Udmurtiya Republic allows envisaging the possibility of creation of Russian Innovation Technology Centre for machine tool building on the territory of the Republic. Udmurtiya enterprises produce electron-beam welding machines and metal spinning lathes which enhance the output and working accuracy. The NITI Progress, JSC - the leader of machine tool industry - conducts technical audit and modernization of processing chains, oriented towards a new end product.
Investment attractiveness
"Expert RA" rating agency assigned ′3B1′ rating (lower potential – moderate risk) to Udmurtiya. The region takes 58th place among Russian regions in investment risk and 42nd place in investment potential. Ecological risk is the lowest investment risk, social risk is the highest one. The highest potential is labour.
In September 2008, the international rating agency Moody’s Investors Service assigned ′Ba1′ global scale rating to Udmurtiya Republic in both the national and foreign currency. National scale credit rating of the region is ′Аа1.ru.′
Fitch Ratings assigned an ′Aa (rus)′national scale rating and ′BB+′ global scale rating to Udmurtiya Republic, the outlook is stable.
Survey by АК&М rating agency ranked Udmurtiya Republic 30th of all the regions of Russia in terms of credit capacity.
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