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Foreign Investment
in the Russian Federation

(Microsoft Word Format, size 80 KB)


 Bankruptcy Law
Bankruptcy procedures can be launched only by a person who was unable to successfully return money through executive procedures. Debtors have the opportunity to save a business from bankruptcy through a financial recovery procedure, which allows creditors two years for the process or can stop it any time upon payment of the debt.
The Law on Investing Funds to Finance Employee Pension
Savings Insurance pension contributions are deposited in separate bank accounts of the Pension Fund in the Central Bank of Russia or in the Federal Treasury. Savings may be invested in government and federal securities, into bonds of Russian holders and into foreign currency. The funds are state property.
Aleph Capital
regularly receives confidential information as part of our normal client relationships. To breach a confidence or to use confidential information improperly or carelessly would be unthinkable.

The Most Significant Economic Bills
    Passed During the Spring Session 2002

    Tax Code Chapter on Small Business Taxation

       Small enterprises with fewer than 100 employees and with an annual turnover
           of less than 15 million rubles will pay taxes equivalent to either 6% of turnover
           or 15% of income, instead of a single social tax, income tax, VAT, enterprise
           assets tax and sales tax.

    Tax Code Chapter on Transport Tax

       Tax rates depend on the vehicle's engine capacity: for vehicles with less than
           100 hp the rate is 5 rubles/hp; 100-150 hp = 7 rubles/hp; 150-200 hp – 10
           rubles/hp; 200-250 hp - 15 rubles/hp; over 250 hp – 30 rubles/hp. Tax rates
           may be changed by regional authorities but by no greater difference than five
           times the amount stipulated.

    Agricultural Land Use Law

       Within two years, owners of land shares must determine the use of the land –
           to transfer to authorized capital stock, to lease, to proxy governance, to sell
           or to leave it for personal agricultural needs. The need to convert shares into
           a specific land piece is only required in the last two instances. The law strictly
           prohibits land sale to foreigners.

    New Version of the Securities Law

       The National Banking Council received the status of supervisory body.
           Government representatives and deputies of the council have the authority to
           restrain expenses of the Bank of Russia on parts not related to monetary and
           credit policy performance.

    Obligatory Vehicle Insurance - Civil Responsibility Law

       Insurance rates are not determined by law – it is subject to the government’s
           specification. Rates can not be changed more often than once every six months,
           and these changes can not affect insurance premiums during the validity of a
           paid insurance policy. The maximum amount of compensation is 400,000 rubles.
           The amount of a third party’s injury compensation is limited to 240,000 rubles,
           and property damage is limited to 160,000 rubles.

    Package of Bills on Ministry of Railway Transport (MPS) Reforms

       The MPS is divided into a number of structures with different functions: state
           regulation, management of transport infrastructure and railway transportation.
           All MPS assets are transferred to OAO “Russian Railways” (RZhD). In the initial
           stage, the company will own several cargo carriers (the package was adopted
           in the first reading).

    Arbitration – Procedural Code

       Economic disputes are referred to the exclusive jurisdiction of arbitration courts;
           people’s courts can no longer consider cases of individuals against companies.
           The prosecutor's authority is limited: they can appear before the court only in
           favor of the state and not in the interest of individuals, as it is now.

    Amendment to the Law “On Customs Tariffs”

       As of Jan. 1, 2003 the amount of export duties on mineral oil must not exceed
           90% of the oil export duty.


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