Ministry of Economic Development
of the Russian Federation

     

Leasehold of land plots within the special economic zones

Leasehold of land plots within the special economic zones

Investor who has obtained the status of a special economic zone resident and is carrying out business activities within its territory shall be provided under a leasehold agreement with a land plot allotted, registered in the state cadastral register at a resident account and located within a zone (Clause 2, Article 32, Chapter 7 of the Federal Law dated July 22, 2005 No. FZ-116 “On Special Economic Zones in the Russian Federation”).

The land plot shall be provided at a discounted rate, which in on average is 2% of the cadastral value of the plot. Reducing factors are also stipulated for each of the special economic zones. Thus, a significant reduction in rental rates compared with the average figures is achieved. For example, the rent of a plot located within the territory of SEZ JSC Dubna is now 1.50 RUR per sq. meter per year.

For reference:

Cadastral value of a land plot is – a calculated value in monetary terms, determined in accordance with the duly approved methodology and representing the views of the value of a land plot with regard to its current use. (Decree of the Government of the Russian Federation dated August 25, 1999, No. 945 “On State Cadastral Value of Lands”)

State cadastral value of land is based on land classification in terms of intended purposes and types of functional use. Each land plot of special economic zones has its established cadastral value.

Alongside with application on provision of a land plot for rent to be submitted to the managing company (JSC "SEZ") a resident shall submit the following documents:

  1. State Registration Certificate of organization;
  2. Certificate of Incorporation as a resident of a SEZ, which is issued by the Ministry of Economic Development of Russia;
  3. Identity document of the applicant’s representative;
  4. Credentials of the representative acting on behalf of a legal entity as an applicant.

Service in entering into a land lease agreement are free of charge and shall be provided no later than within 30 days upon the date of receipt of the application within the required set of documents.

The timeframes of land lease agreements are at least 1 year and not more than the term of the agreement on the conduct of relevant activities within the SEZ.

The procedure of calculating rents under lease agreements concluded with the legal entities and individual entrepreneurs registered as residents is set out by Order of the Ministry of Economic Development of Russia dated July 14, 2006 No. 190 "On approval of the methodology of calculating rent under the lease agreements".

The standard land lease agreement for a land plot located in SEZ and being federally or municipal-owned was approved by Order of the Ministry of Economic Development of Russia dated April 12, 2006 No. 95 "On approval of standard forms of leases of real estate and land plots for operations".

For reference:

In accordance with Article 35 of the Federal Law dated July 22, 2005 FZ No. 116 “On Special Economic Zones in the Russian Federation”, a resident of a SEZ – a tenant of a land plot federally and (or) municipally owned shall not be entitled to sublease the plot and transfer its rights and obligations under the agreement to another person, to provide the land plot for free use, as well as to pledge lease rights and to use the plot as a contribution to authorized capitals of business entities, or as a share in producers’ cooperative.

Buying-out land plots in SEZ by tenants who are owners of real estate property they have constructed

According to Clause 3, Article 32, Chapter 7 of the Federal Law dated July 22, 2005 No. FZ-116 “On Special Economic Zones in the Russian Federation”, the tenants of land plots within the boundaries of special economic zones, being owners of real estate property constructed by them, have the right to buy land plots located under the property in accordance with the legislation of the Russian Federation. The land plot price is determined by the land plot owner in accordance with the Land Code of the Russian Federation dated October 25, 2001 No. 136-FZ.

To carry out a buy/sell procedure of a land plot the folllowing documents are to be submitted to the authority of special economic zones:

1. Application for buying out of a land plot containing information about the applicant, the documents confirming the applicant's title to constructed real estate and details about the land plot;

2. Cadastral passport issued by the Federal Service for State Registration, Cadastre, and Cartography (Russian State Register);

3. Extract from the Unified State Register of rights to immovable property and transactions with it showing the title to the real estate property located on the requested land plot (Russian State Register);

4. Documents confirming the applicant’s title to real estate properties constructed by him.

As a result of providing the service, a Resolution by the Ministry of Economic Development of Russia on buying out a leased land plot is issued for a resident.

 

Rent of immovable property located within a special economic zone and being federally or municipally owned

Before renting office space, a company, which has obtained the status of a special economic zone resident, shall contact the SEZ management company (JSC ”SEZ”) to get assistance in finding free office space.