PROCEDURES FOR SERVING FOREIGN INVESTORS

Contacts with foreign partners begin in the Committee for Foreign Economic Activity under the Moscow city administration, a specialised agency of the Moscow city executive power. The Committee's activities mainly aim at improving the Moscow city investment policy; developing trade co-operation with the focus on creating mechanisms for promoting goods and services offered by Moscow-based companies to external markets; regulating efficiency of the development of Moscow-based hotels and regulating the gambling industry.

The Committee is now developing new approaches to serving foreign investors. These approaches involve the following: creating comprehensive methods for preparing, presenting and implementing investment projects; establishing functional zones in the major city territories and directly supporting major urban development projects.

All aforementioned measures made it possible to create a city network for handling investments which is intended for serving foreign investors and to facilitate the increase in the amount and quality of investments.

A foreign company may submit to the Committee for Foreign Economic Activity its proposal concerning the project which the company intends to implement in co-operation with the city. (Proposals with more efficient financing mechanisms are considered more preferable.) Each proposal, regardless of the economy branch for which it is intended, is considered for no longer than a one-month period. The project may be related to a production or non-production branch of the economy. If required, the Committee will establish interaction with the branch city agencies. The main criteria for selecting projects for implementation include the return on investments within a reasonable time period and future profitability and also replenishment of city coffers, improvement of the city's architectural view and of the environmental security.

If a foreign partner is interested in any of the projects represented in this booklet, the investor shall inform the Committee for Foreign Economic Activity in writing about intentions to implement the selected project. After that the Committee will provide the investor with all the documents required for that project and will brief the investor about the procedures for obtaining initial permits.

Concurrently with that the Committee will consider the future implementation of the joint-project regarding its economic, financial, technological, etc. safety. In co-operation with the investor the scheme for implementing the project is selected. The following forms may be considered: joint venture, complete foreign financing of the project; issuing bonded loans; issuing bonds convertible to shares of specific enterprises; leasing; settling transactions; real-estate investment agreements; participation of foreign construction companies in the construction of real-estate objects as general contractors under the condition of raising credit funds by the companies themselves; concessions. The city participates in such enterprises either by establishing a new company or by acquiring shares (parts) of such enterprises.

The interaction with the Committee makes it possible to comprehensively assess risks of the future project and analyse the project viability and to establish interaction with the agencies issuing required permits. In order to ensure successful co-operation, the Committee develops mechanisms, schemes and terms for attracting resources and for increasing attractiveness of city projects for foreign investors. If required, independent experts are involved in the co-operation activities.

Specific form of the participation and details of the future projects are determined in the way of negotiations. Based on the negotiation results the parties develop a general concept for the implementation of the joint project. The Committee for Foreign Activity prepares a regulatory order document (Decree of the Moscow city administration or of the Moscow Mayor) which sets the property form; procedures and terms for the development of initial permits; reservation and allocation of land lots; terms for conducting the tender for leasing certain land lot; terms of the project implementation (or of its parts) and also the rights and liabilities of the investment project participants. After the issuance of the order document the investor may start implementing the project. The city which have to implement particular provisions of the order document may not hinder the investor's activities and must perform the orders made to them regarding the implementation of the investment project.