RS Brief news Moscow to attract foreign capital

Moscow to attract foreign capital

March 2011

Russian President Dmitry Medvedev has tasked the Russian and Moscow governments with transforming Moscow into a major financial capital. Moscow should become an international financial centre in the near future.
The Presidential decree has already taken shape in the specific activities to be implemented before long. The President has ordered Prime Minister Vladimir Putin and heads of Moscow and Moscow region governments - Sergey Sobyanin and Boris Gromov to supervise the execution of this plan.

In particular, they are requested to develop for Moscow and Moscow region a set of specific targets used in the assessment of the infrastructure of major financial centres in line with the best Russian and European indicators before September 30, 2011. Moreover, Vladimir Putin, Sergey Sobyanin and Boris Gromov should review the existing federal, regional and sectoral programs, related to the infrastructure development in Moscow and the Moscow region, in terms of directing these programs towards the achievement of key targets.

Some of the planned measures for turning Moscow into an international financial centre have already been implemented, for example, in terms of tax policy. The tax on income from the sale of shares in the implementation of long-term investment has been abolished in Russia since January 1, 2011. The government is not going to restrict the activities of national financial institutions as well. "We do not intend to further limit the financial activities. On the contrary, we are planning to maximise the opportunities available for financial institutions”, characterized these trends Dmitry Medvedev, “We expect to receive significant benefits from the development of the Russian financial sector. That's why I want to emphasise that we will not introduce special taxes for the financial sector."

The fact that foreign entities have been able to borrow and raise capital in rubles in the Russian market since 2011 is another practical step in this direction. "This project is of global significance and it is an important tool for the integration of Russia into the global economy, " the President mentioned. He added that Russia is working to improve the efficiency of the judicial system for finance companies that will work on sites of the international financial centre.

From this point of view it is important to introduce international financial reporting standards. "There should be a venue where all the main types of financial instruments could be found. It is essential to introduce in a timely manner what we have been trying to introduce for the last few years, namely: international financial reporting standards for issuers and for regulatory and tax authorities ", said the President.

Furthermore, in late February Prime Minister Vladimir Putin signed the Regulation on the recognition of IFRS and the explanations for their application in Russia. This document is to be passed in accordance with the Law on consolidated financial statements. Another important detail is that the State Duma of the Russian Federation approved the first reading of the draft law on accounting, related to the new rules governing the accounting in Russia. A significant part of this project speaks in favor of unification of the Russian accounting system with the IFRS. You can find out more in the articles ‘Russia to get a new law on accounting’ and ‘Regulations to be replaced with standards’.