Alexander Krutikov

The opportunities for cooperation between Korea and the Far East are vast. Today, a competitive investment space has been created in the Far East; investors get incredible tax benefits and preferences; infrastructure is being created at the expense of the state, electricity tariffs are being reduced, and each investment project gets personalized support

Over the last 5 years, 33% of direct investment in Russia has happened to the Far East. <...> There are not too many projects with participation of Korean companies, and our objective is to intensify this cooperation

We are losing the competition for Korean investment. Over the past 25 years, Korean business in the Far East has had a lot of setbacks, which has affected the confidence of Korean business in the local business environment. And trust has not been fully restored. <...> Korea is also losing the competition for the opportunities in the Far East. China, Japan and India have significantly increased their investment portfolio and started implementing major projects

To intensify the shelf exploration takes three main solutions. First is the development of competition. <…> Second is stimulus and regulation mechanisms required to fulfil the projects. <…> We suppose that the tax regimen needs to be changed for the shelf projects. The preference system we prepared takes that into account. <…> It includes spreading the 4th complexity category to the entire shelf without term expiration. We suppose that the state should intensify investments in technologies required to explore the shelf in particular and the Arctic in general

President of Russia trusted us with the development of the Arctic zone on the Russian Federation. He pointed out three goals we need to achieve. First is raising the quality of life in the Arctic. 2.5 million of our compatriots live in rather grave conditions. Second is the economic development of those territories. <…> Third is a notable, sizeable increase in cargo transfer along the Northern Sea Route. <…> There is only one realistic way to achieve these goals. It’s attracting private investment to these territories. There are no funds available to flood the Arctic with money, thus improving the quality of life. <…> Private investment means jobs, improving the quality of those jobs, and growth of regional taxation base

Infrastructure density is 10 times lower than in the European part of the country; this factor deters investment in the Far East tremendously

When the investor builds the infrastructure for their enterprise, they can’t pay taxes to comply with the infrastructure’s worth <...> We managed to prepare this mechanism together with the Finance Ministry, they supported it <...> And <...> the idea is so that not only the engineering infrastructure could be compensated, but the social one, too

There are many claims against this instrument of support, both from the Accounts Chamber and the Ministry of Finance <...> Because it is perceived by everyone as if budgetary money is ‘handed out’ this way

The unique thing is that the government gives free money for building infrastructure wherever a new enterprise appears, not demanding property, let alone equity, in return; in fact, it is <…> an incentive to come to the Far East

Facilitating access to nonbank financing for investors and creating and independent financial regulator within the Vladivostok Free Port management that would provide the residents with access to the financial centre and monitor their activities

It is the opening of the financial market for foreign credit organizations and creation of opportunities for opening offices of foreign banks here, in the Far East, without the right to attract money from Russian citizens. It is the creation of a multi-currency crowd-funding platform – digital financial assets exchange

The President (of the Russian Federation – ed.) has made a decision to provide incentives to attract more financial establishments to the Far East, to develop the financial market, to rise its development level up to requirements of investors that come here. <...> Together with the Bank of Russia we have managed to formulate a ‘target-based model’ of what has to be done in the Far East

For the first time, we saw a serious gap between the development level of business activities in the Far East and that of the financial market. <...> If we take a look at the Far Eastern financial market we will see no competition at all – almost all loan services are provided by three state-run banks, the level of penetration of loan products for entities, for individuals, the level of penetration of insurance products – we are the last in the Russian Federation according to these criteria. At the same time, all those investors, both Russian and foreign, who come to the Far East, need access to high-quality financial services, professional project consulting services, which we don’t have in the Far East