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Science City, which was adopted by the legislature and is now being implemented.

Under the program, a set of measures is being carried out to attract foreign companies, including the following specific activities:

  • creating a portfolio of investment proposals

  • preparing specialized informational materials about Obninsk intended for foreign companies interested in establishing or expanding their business in Russia

  • marketing the city of Obninsk to help promote it on the Russian and international markets

  • preparing documentation on industrial sites available in Obninsk and on other resources required for foreign companies to establish their businesses

Unfortunately the city's authority to grant tax breaks is quite limited. The only considerable tax benefit available under the present tax law is that regarding the profits tax. Preferential rates on all of the other taxes paid to the city treasury are so small as to make any talk about their attractiveness meaningless.

If the project happens to be of a clearly regional character, however, the situation could become more attractive as a result of additional concessions on taxes payable to the oblast.

Thus, the maximum special exemption for the property tax (50 percent of which goes to Kaluga Oblast and the other 50 percent to the city) can be 100 percent. For the land tax (50 percent remains in Obninsk and 30 percent goes to Kaluga), it will be 80 percent. With the standard rate of 24 percent for the profits tax, the tax benefit for it could reach 68.7 percent (2 percent goes to Obninsk and 14.5 percent to Kaluga).

Other measures within the city's powers include reducing the rate for land rental or making buildings with the required infrastructure available on advantageous terms.

At present, 13 joint ventures and 11 businesses with 100 percent foreign capital are operating in the city. As a rule, these are small businesses. Their activities are rather diversified, including the production and bottling of mineral water (the POLLO firm), ketchup production (MOSSPOL), footwear manufacturing (the Shafran limited liability company), medical technologies and pharmaceuticals (Vienna-Obninsk Biomedical Laboratory, the German Intensive Therapy Clinic, Mir-Pharm), and others. In addition there are a number of Russian firms operating in Obninsk that fill orders for foreign customers, including such high-tech firms as Eridan, Ekon, Converscenter, and Theseus.

Both positive and negative experience has been accumulated in the implementation of international projects in the city. I shall cite two ex



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