Arctic Benefits Law as a Major Factor of Growth

Photo: Matveev Alexey/

Arctic Benefits Law as a Major Factor of Growth

Almost a year ago, on 28 August 2020, the Law on Providing Support to Businesses in the Russian Arctic was enacted. The said law has established in the Russian Arctic a special economic zone -- the largest in the world -- and introduced a package of tax benefits and other incentives aiming to stimulate economic growth in the country’s northernmost regions.

The law, which is now widely seen as an important step towards a healthier investment climate in Russia’s High North, was a long-awaited one. Suffice it to say that it took about 15 years to convince the decision-makers of the need to develop a special regulatory framework for the Russian Arctic and reach necessary compromises in a broad dialogue involving key stakeholders such as the public, the federal and regional governments, big business, SMEs and the expert community.

There are some visible results already. In the space of a year since the law’s entry into force, 186 business entities have been registered as residents of the Arctic special economic area. As part of their projects, about 268 billion rubles (USD 3.6 billion) will be invested, paving the way to creating some 8.7 thousand jobs.

The enactment of the law marked an important milestone in terms of shaping the future of the Russian Arctic. In fact, with this law, grounds have been laid for the development of a modern legislation intended specifically for the country’s polar regions.

The latter is of utmost importance to the Arctic -- the region known for its poor infrastructure, huge distances, limited/seasonal availability of transport, harsh weather and challenging climate. For the mentioned reasons, any project in the High North usually requires considerable investment of time and money. The Arctic preferences law helps to at least partially reduce the costs involved and therefore improve feasibility and effectiveness of new projects.
Alexander Stotskiy
25 August 2021
Arctic Today