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23.10.2018
Austrian investors explore the capabilities of Moscow’s economy
On October 23, the Digital Business Space was the venue for the Russian-Austrian Business Forum “Prospects for the Development of Business in Russia” with the participation of business circles from the Federal State of Vorarlberg. 

The moderator of the forum, PricewaterhouseCoopers’ partner, Mr. Kirill Nikitin, noted that Moscow is a city, competing with the largest megacities of the world, which affords the choice of best practices of interest to the regions. 
 
According to the Head of the Federal State of Vorarlberg, Mr. Marcus Walner, the region occupies a relatively small area in the west of Austria with a population of about 400 thousand, but it has a considerable industrial potential. The economic growth rate is three times the average for Austria.

 More than 30% of the population is employed in the industrial sector, while industrial enterprises produce 25% of the total value. If earlier the territory was considered the center of the textile industry in Austria, currently the decisive role is relegated to electronics, metalworking and the food industry. There exist many small woodworking, chemical enterprises and craft workshops. 

The peculiarity of the federal land and its economy is that about 50% of the production is exported - the export volume reached 10.2 billion euro. The list of export products includes metal products, machine tools, boilers and mechanical equipment, chemical products and products made from synthetic materials, furniture, lumber and wood products, textiles, sports goods, as well as fruits, fruit juices and dairy products. Most goods are exported to the EU countries (51%). The most important partners are Germany and Switzerland. Currently, appliances and machinery, sporting goods and clothing are supplied from Vorarlberg to Russia, but the export volume is yet not significant, amounting to EUR 134 million. 

 “Our  distinguishing mark  is the implementation of the process of continuous innovation on a daily basis. We also focus on educating young people, especially professional cadres for the industry. With good will and good products we are prepared and ready to develop a dialogue with Russia,” said Mr. Walner. The Head of the Federal State touched upon that tourism is highly developed in Vorarlberg and many Russian tourists visit ski resorts during winter, and there is yet a potential for further development in that area. 

The Ambassador of the Republic of Austria to Russia, Mr. Johannes Aigner, noted that, despite the modest territory of the State, the GDP per capita is 10% higher than this figure in Moscow. “Although we observed a drop in exports of 30% for understandable reasons, now there is again an observable growth in mutual trade. The volume of foreign trade between Austria and Moscow reached $ 2.7 billion, ” said the Ambassador of the Republic of Austria. He noted that in the land of Vorarlberg, it is particularly family enterprises that carry on the traditions of industrialization going back several generations, which may become a good example for the Moscow entrepreneurship. 
 
The structure of the Moscow Chamber of Commerce and Industry includes the  Commission for Foreign Economic Cooperation with partners in Austria, said the Senior Vice President of the Moscow Chamber of Commerce and Industry, Mr. Yury Sharandin. He called on Austrian companies to post their commercial offers on the “Business Market” portal, created by the MCCI - a B2B world market, which has already been joined by more than 100 enterprises, having posted more than 500 commercial offers there. He also invited members of the Vorarlberg business delegation to participate in the International Moscow Urban Forum. 

The Executive Director of the Russian-Austrian Business Council, Mr. Anatoly Golovaty, noted that in 2017, the trade turnover between the countries grew by 40%, and imports from Austria to Russia - by 30%. The volume of Russian investments exceeded $ 26 billion, Austrian enterprises invested about $ 5 billion in Russia. 

Ms. Natalya Popkova, the Head of the Industrial Policy Directorate of the Department of Entrepreneurship and Innovative Development of the City of Moscow, reported that in 2015, Moscow passed a new law on industrial policy. The law has determined the main priorities for the development of industry: it is the deployment of compact, efficient, environmentally friendly industries, employing highly skilled labor and ensuring a high level of remuneration.  
 
Ms. Popkova noted that today's benefits for investors in Moscow, which are available in different formats, allow achieving a general reduction in the tax burden from 17 to 25% per year. “The most preferential treatment exists in the “Technopolis Moscow” SEZ (Special Economic Zone), where all taxes — on profit, property, and transport — are zero for 10 years; there is no such practice anywhere in Russia. On the territory of the SEZ, it is possible to build, as well as lease the existing premises that are operational. We are ready to guide an investor from the first to the final stages of a project’s implementation.”  Ms.Popkova reminded that for the needs of production applications, there is an opportunity to get 5 - year loans at preferential rates from 1 to 5% per year, as well as subsidies for the purchase of industrial equipment, participation in exhibitions and obtaining international certificates. 

The Trade Advisor of the Austrian Embassy in the Russian Federation, Mr. Rudolf Lukavski, noted that Russia today is in the 17th position on the list of trading partners, which indicates a high potential for trade expansion. The most important goods imported from Austria are machinery and equipment, electronics, equipment for the automotive industry and rolling stock (33%), and medicine (26%). Fuel resources and metals are exported from Russia. About 700 Austrian enterprises operate in Russia, not only in Moscow, but also in many Russian regions. 

Mr. Artem Barashev, the Deputy Director of the City PPP (“Public-Private Partnership Development Center”) Investment Management Agency, presented an overview of the economic potential of Moscow. The volume of accumulated investments in Moscow amounted to 263 billion dollars. Moscow ranks 35th in the “Doing Business” comfort rating, ahead of some European capitals. “Investment projects and programs of the Government of Moscow in the development of transportation infrastructure, housing renovation, development of a medical cluster, - just to site some examples, - have a multiplier effect, giving impetus to the development of diverse areas. 

In terms of the level and effectiveness of attracting investments, Moscow ranks 6th among 301 European cities, ”said Mr. Barashev. Austrian enterprises have invested $ 3.2 billion in the economy of Moscow, and are thus in the 4th place after Germany, France and Italy. He drew attention to the possibility of entering into offset contracts, which guarantee the sale of products, such as drugs, for example, by using the state order system. 

Mr. Vasily Kalinkin, the Head of the Competitive Policy Directorate for Investment Trading and Competition Development of the Moscow City Department, presented opportunities for acquiring premises in Moscow. He noted that the availability, variety of offers and the ease of participation in electronic procedures are producing good results . Mr. Kalinkin stressed that all offers, as well as all information for investors, are available on the Investment portal of the Government of Moscow.

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