Crimea to become special economic zone with tax breaks to attract investors

Moscow will make Crimea a special economic zone with tax breaks to attract investors, Russian Prime Minister has announced at a government session in Crimea’s capital Simferopol.

“We made a decision to make Crimea a special economic zone,” Medvedev said. “Today the state duma began reviewing this legislation.”

Companies that make investments with the authorities of Crimea and Sevastopol could be given tax breaks, Prime Minister said

“We have to ensure swindlers don’t take advantage of this state in transition,” Medvedev said. “It is our purpose to make the peninsula as attractive as possible for investment.” The Prime Minister described the development of Crimea as a national priority and compared the importance of the region to that of the Far East.

Earlier, Medvedev drew parallels between Crimea and another Russian region that’s geographically separated from Russia. He said Crimea could acquire the status of a special economic zone similar to the one enjoyed by Russia's western Kaliningrad region.

"As well as in the case of Kaliningrad, a specific law is required which allows tax privileges to all large investors, ready to put money into the region," Medvedev said last week.

Speaking in Simferopol on Monday, the Prime Minister said Crimea was ready to be integrated into the Russian monetary system.

“For fully fledged integration of Crimea into the ruble zone, Russian currency has been delivered in sufficient volumes to the peninsular,” he announced.

Medvedev said the ruble has already started circulating in the region. “Now, our main task is to expand the Russian banking network to Crimea,” he added. The Crimean parliament approved switching to the Russian currency earlier in March. The MPs decided to also keep the Ukrainian hryvnia as a second official currency until 2016, to make the transition to the ruble less painful.

Medvedev earlier this month ordered the cabinet to have a comprehensive program on the development of Crimea and Sevastopol ready by July.

Vice-premier Dmitry Kozak, who supervises the peninsular, said the plan could be ready as early as April 15. Before being entrusted with overseeing Crimea, Kozak was in charge of preparations for the Sochi 2014 Olympic and Paralympic Winter Games.