More SMEs to Enjoy Arctic Benefits

Photo: Melnik Vladimir/

More SMEs to Enjoy Arctic Benefits

The Government made it easier for small and medium businesses to apply for a status of a resident in the Russian Arctic’s free economic zone. By its ordinance adopted on 20 October 2021, it approved the list of areas where SMEs are exempt from the requirement to invest into immovable property to become a resident.

According to law, to qualify for such status, a legal entity or a person is expected to invest at least 1 million rubles (about USD 14,400) into a project in the Russian Arctic, including into construction or refurbishment of a building to be further used for the project’s purposes. However, in July 2021, this requirement was rescinded for SMEs falling into one or several categories as defined by the Government. As per the revised law on Arctic benefits, sums put by such SMEs into purchasing machines, equipment and other tools shall also count towards the required minimum investment amount. It is this list that was introduced by the mentioned ordinance.

Overall, the list includes 58 areas covering most of sectors where Arctic-based SMEs operate. Among these sectors are animal husbandry, forestry, metal working, as well as production of food, furniture, clothing, paper and leather goods. Such socially significant sectors as education, library services, healthcare, publishing, and MSW treatment were also listed. The Arctic benefits will become available to SMEs working in the tourism and hospitality industry, which are regarded as one of key drivers of both economic growth and employment in the Russian High North. The list also includes several hi-tech categories such as telecoms, software engineering, IT, and production of computers, optics and electronic equipment.

The document will considerably ease SMEs’ access to benefits relating to the status of a resident of the Russian Arctic Zone. In turn, this will open new avenues for development and secure new growth opportunities in the Russian High North.

Arctic Today is a column by PORA CEO Alexander Stotskiy analyzing major international, national and regional events and trends in the Arctic.
Alexander Stotskiy
25 October 2021
Arctic Today