The city management structure
According to the Constitution of the Russian Federation, a provision is made for dividing the competences and the credentials among the Federation and its constituent entities. The exclusive competence of the Federation includes the administration of the federal governmental property, defense and some other questions.
The mutual competence of the Federation and its constituent entities includes the following, in compliance with the Constitution: the taxation, ownership, occupation and disposition of the land and the mineral resources; the appointment of certain officials of the legal and law enforcement bodies of a corresponding entity. All of the questions that are beyond the excusive jurisdiction of the Federation or the mutual competence of the Federation and its entities are under full management of the entities of the Russian Federation. The administrative arrangement of Moscow is defined by the city Bylaws, adopted in July 2001 and serving as the Basic Law of Moscow. The city administration is carried out by the administrative and legislative government departments.
The administrative department is headed by the Mayor, the commanding officer of Moscow, elected by the citizens for a 4-year period, and represented by the sectoral and functional executive bodies of the city of Moscow in the form of various departments, committees, administrations and the according lower-level structures, responsible for the organization and controlling of the city activities under the direction of the Government of Moscow. The Moscow Mayor is resolving the issues of the city’s social and economical development, maintaining the municipal facilities control and is also performing a range of other executive-administrative functions that are within his power, directly or through the executive authorities of Moscow.
The Government of Moscow is the permanent superior collegial body of the executive authority, possessing the general competence and ensuring the concerted activity of the Moscow executive authorities. The Government of Moscow is headed by the Mayor.
The most important activities of the Government of Moscow include the following: the municipal and public services, including the public transportation, communication and the infrastructural assets; the construction works on the territory of the city; the management and control of the city property, including its sale and rent, as well as the process of privatization; developing the city development economic policy and the city social infrastructure, including the provision of services in the spheres of health care, public education, physical culture and sports, as well as supporting the socially unprotected population groups.
The Mayor issues the decrees and regulations, regarding his competence, which are subject to the compulsory implementation over the whole area of the city, and controls their execution.
The order of the organization and activities of the Government of Moscow is determined by the law of the city of Moscow, passed by the Moscow city Duma on presentation of the Mayor of Moscow. The Government of Moscow is authorized to solve all of the public administration issues, falling into the jurisdiction of the Moscow city executive authority – the entity of the Russian Federation, excluding the issues that fall into the jurisdiction of the federal authorities and the Mayor of Moscow, according to the federal legislation and the legislation of the city of Moscow.
The present Government consists of the following individuals: the Mayor; the Vice-Mayor; the supervisors of the Moscow scientific and production potential development centers and the centers of the interregional and social relations, the economic policy and development of the city of Moscow, the architecture, development and reconstruction of the city of Moscow; the municipal facilities and the social sphere; the chief of the Moscow Government Office; the deputy Mayors of the Government of Moscow: for the international and the external-economic relations, for the issues of the interregional cooperation and sports; an authorized Mayor representative in the Moscow city Duma; the Government ministers: the heads of the departments of science and the industrial policy, the support and development of the small business, the natural resources management and the environmental protection, the consumer market and services, the food resources; the finances and the prefects of the administrative districts.
The territorial executive authorities, subject to general jurisdiction of the Government of Moscow, are the prefectures. The executive-administrative, coordinating and control functions and credentials of the city administration by the administrative districts are performed by the prefects, appointed and dismissed by the Mayor of Moscow. The authority of a district is the Municipal Council, consisting of the district Assembly and the head of the Municipal Council, who is in charge of the district Assembly and the district administration. The Municipal Council solves the local character issues and manages the district’s economic and social services. The representative body credentials of the district Municipal Council are performed by the Assembly, the members of which are the councellors. They are elected by the citizens for a 4-year period. The head of the Municipal Council organizes its operation on the principle of individual responsibility, operates within the confines of the jurisdiction of the Municipal Council and possesses a decisive vote.
At the present time, Moscow has 10 administrative districts and 125 regions.
The local self-government in Moscow is carried out within the intercity municipal formations, created on the territory of the regions of Moscow. The local government administrations consist of the local self-government representative body (the municipal Assembly), the executive-administrative body (the municipality) and other local self-government authorities, formed in accordance with the municipal formation’s Bylaws. The local character questions are the issues, related to the direct habitability support for the population of the municipal formation. More specifically, the following falls into the category of the municipal formations’ competence: adopting the plans and programs of the municipal formation development in accordance with the General development plan of the city of Moscow, the town-building development plans for the local units of Moscow as well as any other town-building documentation of Moscow, approved in accordance with the applicable procedures; the realization management of the indicated plans and programs; approval of the budget process and the local budget regulation, the local budget execution; adoption of the report about its performance in accordance with the applicable legislation; the socially important objects construction proposals to the executive department of Moscow, according to the town-building standards and the rules of the city of Moscow, based on the General development plan of Moscow, the town-building development plans for the local units of Moscow as well as any other town-building documentation, approved in the procedure prescribed by law; the maintenance and exploitation management of the municipally owned objects of the social sphere, education, health care, physical culture and sports and their reserved property in accordance with the legislative act of the city of Moscow; taking special measures for preserving the local character historical and cultural monuments in accordance with the federal laws and the laws of the city of Moscow; developing the local traditions and ceremonies; the small business promotion on the territory of the municipal formation and so on.
The representative and legislative authority of the governmental power is the Moscow city Duma, elected by the citizens of Moscow for a 4-year time period and consisting of 35 members (deputies.) The Duma’s jurisdiction includes the adoption of the Bylaws and other laws of the city of Moscow as well as the regulations of the Moscow city Duma. The City Duma is also performing the general control function of the activities of the Government of Moscow.
The basic credentials of the Moscow city Duma are the following: adoption of the bylaws and other laws of the city of Moscow; adoption of the Duma regulations; reviewing and adoption of the Moscow city budget and the budget of the city target budget funds (TBF); the Moscow city budget and the city TBF budgets control, the Moscow city budget and the TBF budgets implementation reports approval; assigning the regional and local taxes and exactions, as well as the exemption procedures and the size of the rates and the federal taxes concessions within the frame of the rights, conferred to the constituent entities of the Russian Federation by the federal legislation; the approval of the General Development plan of the city of Moscow, the target programs of the city, the city socially-economical development programs, as well as their performance reports, presented by the Mayor of Moscow; defining the operating procedures of the activities of the local authorities; establishing the sources of income of the municipal formations’ budgets and the procedure of the regional taxes and charges income distribution between the city budget and the municipal formations’ budgets; determining of the fines and other kinds of administrative responsibility of the citizens, officials and organizations for the law violations, regarding the management of the city of Moscow and so on.
The city justice system contains the trial courts of general jurisdiction and the Arbitration court of the city of Moscow.
The territorial-property relations
Moscow doesn’t only constitute an independent entity of the Russian Federation, but also is an independent entity of the territorial-property relations.
In connection with the adoption and effectiveness of the Land Code of the Russian Federation, the legislative department has adopted a decision to systematize the regulatory legal acts of the city of Moscow, related to the territories relations issues, as well as the construction and reconstruction of various objects on the territory of the city. The founding acts in these areas, being the most interesting ones for the attracted investors, are the following Laws of the city of Moscow: “About the land-use and site development in the city of Moscow” and “About the permit for the construction and reconstruction of the town-building objects in the city of Moscow.”
The land-using law offers the main concepts and terms, which are necessary to know for an investor (or another interested party), when performing an activity directly related to the objects construction (reconstruction) on the territory of the city. The law also presents some new concepts, such as the “territorial zone” i.e. a part of the territory of Moscow, within the boundaries of which, there operates a single town-building regulation; a “town-building regulation" is a document, which contains the land usage types and the usage restrictions. The law also includes the fundamental for the attainment, possession and the termination of the proprietary rights and other rights to land.
As for the quantitative relation, administrative districts of Moscow possess the following land resources:
| District |
Area (hectare) |
| Central |
6 617,55 |
| North-Eastern |
10 188,30 |
| Eastern |
15 483,55 |
| South-Eastern |
12 771,83 |
| South |
13 177,29 |
| South-Western |
11 136,22 |
| Western |
15 335,43 |
| North-Western |
9 328,10 |
| North |
11 336,74 |
| Zelenograd’s |
3 719,99 |
| TOTAL: |
109 095,00 |
In accordance with the Constitution of the Russian Federation and the Bylaws of the city of Moscow, the landed property, managed by the city, is divided into 2 types:
FEDERAL, including:
- the federal property, located on the territory of the Federation entity;
- the federal property of the Russian Federation;
- the land plots, which contain the buildings, constructions and premises, which accommodate the legislative, executive and juridical authorities of the Russian Federation, as well as the General Prosecutor of the Russian Federation, the Central Bank of the Russian Federation, the Pension Fund of the Russian Federation and so on.
- the federal property of the Federal entity.
PRIVATE (a land-plot sale experiment in Zelenograd.)
At the same time, the main land usage form in Moscow is rent. The land tenant-rights realization is one of the suppositions for the appearance of the new immovable properties. The investors, obtaining the tenant-rights at contests, receive a guaranteed opportunity of the land reclamation. The provided areas in Moscow now offer hundreds of apartment buildings, malls, servicing points, parking lots, maintenance services centers, public catering establishments and administrative buildings.
The land plots are subject to either a long-term lease (up to 49 years) or a short-term lease (up to 5 years). The leasehold relations are defined by the lease contracts. The land plots, which are in the city’s possession, may be leased out or passed for a permanent (open-ended) usage.
The right of a permanent (open-ended) land usage may belong only to the governmental and municipal authorities and the governmental enterprises. All other legal and physical persons may own the land plots only under authority of a rental agreement or the property right. The transfer of the land plots, beneficially owned by the city, for rent is carried out by the results of a contest. However, if a person beneficially owns a house (building), the land plot is presented for rent with no contests held. According to the results of the contest, there is issued an order document of the Government of Moscow, which serves as the foundation for the land relationship preparation: formation of a rent contract or issuing a certification for the right of ownership of a land plot.
The land provision types of Moscow:
- the short-term lease (up to 5 years);
- the long-term lease (up to 49 years);
- the sublease (for the time not exceeding the lease time);
- the free limited utilization (for the socially important objects);
- the right of a permanents (open-ended) usage (for the governmental institutions).
Using the land in Moscow is to be paid for. The main forms of paying for the land are the land-tax, rental fee and a one-time-only land fees, which are raised when a land plot is sold or the right for the conclusion of a land lease contract is sold.
The types of the civil transactions with the rental rights and the land plots:
- the pledge of the tenant right (hypothecation);
- the sale and purchase of the tenant rights;
- depositing into the authorized capital;
- the sublease.
The order of selling the rental rights to the land lots
The commercial land lots in Moscow are offered on a competitive basis with the payment of the right for conclusion of a land lease at a market value. The procedure for carrying out the land tender is defined by the regulations of the Mayor of Moscow: № 571-RM from 18.12.92; № 721-RM from 18.12.92 and № 603-RM from 29.11.94. The land tenders are carried out by the City land acquisition and the town-building regulation Committee, as well as by the regional territorial-property committees, attached to the prefectures of the administrative districts (hereunder referred to as Committee.)
The according committee approves the registry of the competitive land plots. The Moscow city architecture committee (Moskomarkhitektura) and the Department of the land resources of Moscow provide the preparation of the initially-approving documentation for each one of the competitive land slots. The structure and the preparation procedure of the documentation have been defined by the 08.04.97 № 273-RM regulation of the Mayor of Moscow.
The calculation of the starting price of the right to conclude a renting treaty is performed in accordance with the approved technique subject to the Moscow Government regulation № 1022-PP from 13.11.2001 with final confirmation at the commission.
The permitted individuals to compete are the legal and physical bodies, who have incorporated the tender participation request and have also provided the following documents:
- a letter of guarantee of the applicant, confirming that the conditions of the competition have been met;
- the offers for the declared price (in a sealed envelope);
- the copies of the payment documents, confirming the depositing of the down payment in the amount of 10% of the starting price.
The offers of the participants are review by the Committee, on the basis of the set terms and the contest winner detection criterion.
As a rule, the winner detection criterion is the price, offered for the right to rent a land plot.
At a Committee session, the envelopes with the suggestions are being opened and the winner becomes the person, who had offered the maximum price for the leasing right.
The winner of the tender must pay the stated sum inclusive of the pre-paid down payments within 10 business days. However, the Committee may decide to grant the installment payment of the right to lease a land plot up to a 1-year period. The other participants receive their down payment within 10 business days since the results of the tender have been declared.
After paying the stated sum, the winner of the tender obtains a right to sign the land rental contract with the land recourses Department of the city of Moscow (as a representative of the Government of Moscow), protected by the Civil Code of the Russian Federation, the Land Code and other applicable laws.
The land rental contact is signed within a 30-day period since the date of issuance of the tender results protocol.
Signing a rental contract provides the tender winner with a judicial opportunity to build and exploit a required object on the rented land plot. The constructed object completely becomes the private property of the investor. The land spot rental contract is an economic contract, and the rights of both parties in relation to this contract may be defended in the arbitration court.
In accordance with the Civil Code of the Russian Federation, the legal and physical bodies, who have paid for the right of conclusion of a rental contract at market value, obtain a possibility of purchase and sale of their rental rights, the down payment, the authorized capital deposit and other kinds of market operations. At the same time, they are free to choose their partners and to transact legal market operations. The interference of the Moscow executive authorities into the process of selecting a business partner is not permitted. The functions of the executive authorities include just the registration of these transactions, provided by the law and the city normative base.
In those cases when the real estate object creation investment project is planned to be realized according to an investment contract with the city, which makes provision for shared space distribution of the investor and the city, the question is reviewed by the City tender committee for the identification of investors for the realization of the town-building projects in the untenable fund of the city of Moscow.
At a sitting of an indicated committee, there is defined the advisability of realization of the investment project subject to conditions of an investment contract or by means of execution of a land rental contract with the payment of the rental rights.
The territorial-property documents preparation
The land-user rights protecting and including the land plots into the market relations is impossible without the registration of the rights to land, in accordance with the applicable legislation of the Russian Federation and Moscow with issuing of the corresponding certifying documents.
For the registration of rights to land, the land resources Department of Moscow creates the land management files for each land plot. The specialists conduct a legal review of the documentation, presented by the land-user, as well as the land surveying, setting the land plots’ borders, preparing a project of an administrative act of the executive authority of the city of Moscow about the land plots assignment and the establishment of the right of possession. Next, there are registered the rights to land with issuing of the certifying documents of a standard pattern (rental contracts, uncompensated temporary usage contacts, registering of a permanent (open-ended) usage right.) Besides that, the land resources Department of the city of Moscow carries out the transaction processing with the land rental rights, such as a pledge, hypothecation, purchase and sale, a registered capital investment and so on.
The general information for the land-users, regarding the contract relations registration
- The land-user presents a set of documents to the Territorial association of the land-use regulation and fills out a declaration of the fact of the Moscow land plot usage. The documentation set includes the following:
- at a new provision of a land plot: a copy of the certificate of registration, the copies of the constituent documents (a passport copy for the physical bodies), the property documentation copies and the initially permissive documentation.
- at the establishment of the land plot usage right: the copies of the certificate of registration, the copies of the constituent documents (a passport copy for the physical bodies), the property documentation copies, a title history, the Technical Inventory Bureau documents – a technical passport, the 1A form, the floor plan and the site plan.
- Territorial association of the land-use regulation defines the boundary map of the land plot after accepting the documentation.
- After presenting the boundary map, correlated with the neighboring land-users and the correlating entities, to the Territorial association of the land-use regulation, the question is further reviewed by the district or city land relations Committee for making a decision and issuing an order document.
- After accepting a positive decision, issuing of the order document and carrying out the boundary work, there is a rental agreement or some other certifying document settled between the land-user and the Moscow land resources Department as well as the Plan of the land plot.
- The document landing to the land-users takes place.
The review of the main market segments of the Moscow real estate
The increase of the investment activities could not but influence the real estate market of Moscow, which undergoes significant changes during the last few years, both quantitative and qualitative.
By the results of the year 2003, the total volume of the closed office real estate transactions has increased by 33%; the volume of the sales premises has increased by 25%, compared to the year 2002. The total volume of the office premises comes up to nearly 7 million square meters. The volume of the new offers for the administrative-office premises of the A and B class, which is not realized on the market, has increased by 47%, compared to the year 2002. The demand of the potential office tenants is still exceeding the supply.
There still takes place an active attraction of the foreign investments into the development of the trade real estate, the most perspective trade premises construction regions being the suburbs of Moscow along the Moscow Ring Road. The total volume of the trade premises market today amounts to nearly 2, 4 million square meters. In the year 2003, the number of trade premises in Moscow increased by 25%, compared to the year 2002 and the trade premises share in the retail turnover has increased to 6%. Today, the Moscow market presents the trade chains of the well-known western brands: Меtro, Cash&Carry, SPAR, Aushan, Marionnaud, Sephora and so on.
As a result of the active development of the trade sphere, there has happened a significant activation of the warehousing realty market: the construction volume of new premises of the A and B class hag increased by 75%, compared to the year 2002. The total volume of the warehousing realty market amounts to nearly 3, 9 million square meters. The demand is significantly outgrowing the supply; the growth volume of the new construction is quite behind the demand growth.
According to the report of the Knight Frank company, who is performing a regular monitoring of the major real estate markets of the world, at the present time, Moscow can compete with the other real estate markets around the world, including Asia, and is taking a 4th place.
According to the results of the rating, performed by the Paris research institute for the questions of the urbanization and the world real estate markets studying, the first place in the independent research “The effectiveness of investing into the real estate of the European capitals” was occupied by Moscow.
The preparatory stages fore the construction start and the permissive documentation
The construction of objects in the city of Moscow, irrespective of their designation, includes the following main stages: the pre-project preparation of the construction, the project planning, obtaining a permit for construction and the construction itself.
The pre-project preparation of the construction consists of two periods: the pre-investment and the investment periods.
During the pre-investment period, the following town-building documentation is developed: distribution of the construction types, developing the schemes of engineer support of the construction regions’ territories and the reconstruction and the site planning projects.
The present documentation is performed in accordance with the General development plan of the city of Moscow.
During the investment period, the following is carried out: developing of the town-building justification for the placement of the object i.e. establishing the possibility of the object constructions (reconstruction) at the specific location with due consideration of the historically-cultural, sanitary, ecological and other requirements; obtaining the required permissions from the municipal administration authorities and so on.
The result of the pre-project preparation is the legal act of the municipal administration, which defines the Client and the realization conditions for the investment-construction activity.
During the process of the construction project planning, the architectural project, the project and working documentation are developed and adopted.
The results of the construction pre-project planning and project planning is the project approval, obtaining the construction permit and order.
The preparation of the pre-project and project documentation is carried out by the legal and physical bodies, licensed for performing the according activities.
The construction permit
The law about the construction/reconstruction permit for the town-building objects in the city of Moscow contains a list of concepts, which will be used by the parties when obtaining the according permits and agreements of the city authorities, such as: the town-building objects and complex; a preliminary estimate of the town-building requirements of the construction; the town-building justification of the object location and construction, the initially permissive documentation for the construction, the decision about the construction and the construction permit, the act of authorized usage of the town-building object’s territory e.t.c. The law closely regulates the procedure of obtaining permits and a set of documents, required to start the object construction or reconstruction.
The act of the authorized usage of the town-building object’s territory contains the requirements, parameters and conditions of the authorized usage of the town-building object’s territory.
The rights of the investors and other interested parties in connection with the object construction or reconstruction are protected with the norms of the law of the Russian federation and Moscow, apart from their proprietary right to these objects.
The Client is authorized to perform the object construction, reconstruction or other construction works given the following:
- a legal act of the municipal administration, authorizing him to perform the town-building activities, or
- the registered property and land relations, or
- a registered permit to perform the installation or ground work.
The works, requiring the permit registrations, are the construction, reconstruction, restoration and others of this kind.
When developing the project documentation, it is necessary to carry out a state environmental appraisal in accordance with the “About the environmental appraisal” Law of the Russian Federation.
Before starting the construction, the Client must possess the following documents:
- a legal act of the city administration, permitting the construction or the reconstruction;
- a construction (reconstruction) permit;
- the documents, confirming the right of use of the real estate object;
- the project documentation and so on.
The permissive documentation
The preparation of the permissive documentation is carried out by the City Architectural Committee of Moscow (Mosckomarhitektura) in accordance with the affirmed town-building documentation or given the town-building justification of the object placement.
The permissive documentation includes:
- the main requirements and recommendation for the object placement;
- the boundaries of the land plot;
- the technical and economic parameters of the object;
- the conclusion of the environmental appraisal;
- the requirements and recommendations regarding the construction and other characteristics.
There are certain validity periods, defined for the permissive documentation of the object’s construction (reconstruction). At the expiration of the validity period of the permissive documentation, upon the Client’s request, Mosckomarhitektura determines the possibility of its reissuance, extension or cancellation. .
The regulatory considerations of the activities of the enterprises with the foreign investments in the city of Moscow
The conditions for the entrepreneurial activities of the foreign investors in the Russian Federation are regulated by the “About the foreign investments in the Russian Federation” Federal law of July 9, 1999 № 160-FZ.
In particular, the Federal legislation makes provision for granting the tariff customs privileges when importing goods in the capacity of the foreign investor’s investments into the registered capital of the enterprises with the foreign investments.
The exemption issues are regulated by the mentioned “About the foreign investments in the Russian Federation” Federation law; the Russian Federation “About the custom tariff” Law of May 21, 1993 № 5003-1; The Russian Federation Governmental Regulation “About the benefits for payment of the import custom duties and the value-added tax in relation to the goods, imported by the foreign investors in the capacity of an investment into the registered (reserve) capital of the enterprises with the foreign investments” of July 23, 1996, № 883; the Recommended Practice for applying the tariff benefits when importing goods in the capacity of an investment of a foreign investor into the registered (reserve) capital of the enterprises with the foreign investments (the letter of the State Customs Committee of the Russian Federation, dated July 3, 2002 № 01-06/26232.)
Besides that, the Internal Revenue Code of the Russian Federation has established that the investments, received from the foreign investors for the financing of the capital production investments, are not included into the taxable base when calculating the profits tax, providing that they have been used within one calendar year since the reception date (p. 251.)
The “About the foreign investments” law provides for an opportunity of granting additional benefits to the foreign investors by the entities of the Russian Federation and the local authorities, within the framework of the jurisdiction, provided by the Law. The decision-making on the issues of granting the mentioned benefits is made by the according legislative authorities in the regions of the Russian Federation.
The procedure of working with a foreign investor
In fact, working with a foreign partner begins within the walls of the external economic activities Committee of the city of Moscow – a branch agency of the executive authority of the city of Moscow. The main goals of the Committee are: improving the investment policy of Moscow; attracting foreign investments into the economics of Moscow; development of the foreign trade cooperation and the arrangement of promotion of the Moscow’s enterprises products and service to the external markets; increasing of the development effectiveness if the city hotel industry as well as the regulation of the gambling business.
The work of the Committee is carried out in conjunction with the functional and branch authorities of the city, the external-economic units of the entities of the Russian Federation; the Chamber of Commerce and Industry of Russia and Moscow; the federal ministries and departments; the embassies and trade representations of Russia and Moscow in the foreign countries, as well as with the foreign representations in Moscow.
The priority directions of the investment policy in the city of Moscow are concentrated on:
- the adaptation of the city investment conditions to the real demands and possibilities of an investor;
- the development of the city regulatory base on the questions of the investments and the investment cooperation, as well as creating the according management structures;
- the orientation on the international documentation standards for the investment projects;
- the promotion of the investment capabilities of Moscow.
Thanks to a systems approach to the selection of the investment proposals, the capital managed to create a competitive environment for the potential foreign investors. A precise preliminary analytical evaluation of the future partners and their economic potential, as well as the analysis of the proposed projects realization financial schemes, allowed excluding those alternatives, which could have been unfavorable for the city in both the economic and social way.
According to the totals of the year 2003, the funds, obtained by the economics of Moscow from the foreign sources, have for the first time exceeded the volume of the city budget, counting up to nearly 14 billion dollars.
To begin the realization of a foreign company’s project, you must send you proposal to the external economic activities Committee with a notification about the intention of carrying out a certain project together with the city (the preferable proposals may be the ones with the most effective financing version.) The proposal is reviewed during a 1-month period, apart from the branch directionality: this may be a project in the production sphere or in the non-production sphere.
The main conditions for the project realization perspective are not just the return on investments within an acceptable time period and the future profitableness, but also the supplement of the city revenues, the improvement of the architectural appearance and the environmental security of the capital.
In case a foreign partner is interested in one of the presented projects, he would also need to present a written notice to the external economic activities Committee about his intention to realize the selected project.
The realization of all of the city investment projects in different spheres of economics of Moscow is carried out on a competitive basis.
At the same time, the Committee is considering s future realization of a joined project form a variety of points: the economic safety, the financially-economic, technical etc. together with the investor, there is being solved the issue of selecting a realization scheme for this project, which may be a joined enterprise in the form of a joint-stock company; the 100% foreign investments into the projects; as well as a form of issuing of the bonded loans; issuing of the bonds, convertible into the shares of the specific enterprises; the compensatory deal; investment contracts in the real estate sphere; the participation of the foreign construction companies in the immovable property construction in capacity of the general contractors on condition that they will attract the credit resources. The city’s participation in the commercial association is performed by the establishment of a new association or by its shares acquisition.
As for the financial participation scheme of the foreign companies in the realization of large-scale projects, the preferable one is the investment, not the crediting participation with the parties sharing the investment risks. In its turn, the city may support the foreign investments by taking the participating interest in the projects.
The interaction with the Committee allows to thoroughly treat the risks of a future project, to take the required measures of providing the feasibility and to improve the cooperation with the entities, performing the permissive functions. For a successful work in this direction, the Committee develops the mechanisms, schemes and conditions of the attraction of the means, increasing the attractiveness of the city projects for the foreign investors. In certain cases, independent expert are being invited.
In the course of the negotiations, there is discussed a specific form of participation and all of the details of the future project. As a result, both parties produce a common realization conception of the joint projects.
In case of the specific investor winning the investment project realization tender, the external economic activities Committee prepares an investment contract, which normally reflects all questions, related to the patterns of ownership; the procedure and timing for the preparation of the initially permissive documentation, the reservation and assignment of the land; the project realization (separate stages) timing; the rights and obligations of the project participants. After signing an investment contract, the investor may proceed to the direct project realization and the municipal structures, which have been assigned to perform certain regulations of the contract, must not interfere, but carry out the incumbent instructions, concerning the investment project realization.
The Committee members follow the project at all stages of its realization.
At the realization of the project together with the external economic activities Committee of the city of Moscow, the foreign investor will obtain the following advantages:
- the lack of necessity to personally come in contact with various coordinating authorities;
- saving the time and funds on various procedures;
- elaborate preparation of the documentation, required for competing in the investment project realization tender;
- an ability of engaging into the project’s economy directly until the completion of the plan coordination process and receiving an official approval;
- help in searching for partners for the project (stage) realization, as well as a direct partnership with the Government of Moscow when creating the enterprises with the city’s share.
The registration procedure for the enterprises with the foreign investments
The registration procedure of the legal entities, whose authorized capital includes a foreign capital share is regulated by the “About the state registration of the legal entities” Federal Law with the specifics, defined by the “About the foreign investments in the Russian Federation” Federal Law. By the "state registration of the legal bodies" the law shall basically mean the following: an act of the federal authority, by means of which there is the information entered into the state register about the creation, reconstruction and liquidation of the legal bodies, as well as some other data, such as: the legal organizational form and address of a legal body; the information about the incorporators; the volume of the authorized capital; the data about the obtained licenses and so on.
In accordance with the regulation of the Government of the Russian Federation of 17.05.2002 № 319, the authorized federal executive entity, performing the state registration of the legal bodies as of July 1, 2002, is the taxes and dues Ministry of the Russian Federation.
Creating the legal bodies, whose authorized capital includes a foreign investment share, is processed in the same manner as the creation of a legal body with no foreign capital contribution. The restrictive character exemptions for the foreign investors may be defined only by the federal law and only to that extension that is necessary for the protection of the basics of the constitutional system, morality, health, rights and legitimate interests of the other people, the provision pf the country’s defense and the governmental safety.
The state registration is carried out based on the location of a standing executive agency (collegiate or individual) during a time period of no more that 5 business days.
At the state registration of a created legal body, the following documentation must be presented to the registering entity:
- a state registration application in the due form;
- a decision about creating a legal body (a protocol, agreement or some other document);
- the constituent documents of the legal entity;
- an extract from the register of the foreign legal entities of the country of origin or another equal legal validity proof of the legal status of a foreign legal body incorporator;
- a document, certifying the state due payment.
On or prior to one day after the state registration, the registering entity issues (or directs to) the applicant a document, certifying that fact of making an entry in the state register.
A refusal of the state registration is possible in two cases:
- at the nonpresentation of the documentation, indicated above and required for the state registration;
- the documentation presentation to the inappropriate registering entity.
A refusal of the state registration decision may be taken in a time period of no more that 5 days. This decision may be appealed against in a judicial procedure. The registering entity indemnifies against damage for the registration refusal or the violation of order of the state registration, if it is proved that the violations have been committed through its fault. In case there takes place a provision of the unreliable evidence, required for being included into the state register, the applicant party will bear the responsibility in accordance with the legislation.
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