1

Leningrad Region:

A RELIABLE PARTNER

FOR INVESTORSPRESENTED BY:DMITRY YALOV

VICE-GOVERNOR of LENINGRAD REGION

December 17, 2012Helsinki

2

1. Leningrad Region in brief

3LOCATION AND POPULATION

FINLAND

Karelia

Vologda Region

Moscow

Novgorod Region

Pskov Region

ESTONIA

Helsinki

Riga

Lake Ladoga

Gulf of Finland

Saint-Petersburg

Population

1 730 000

Share of rural population

34,6 %

Land area (Sq. km)

85 908,8

LENINGRAD REGION

4DEVELOPMENT DYNAMICS:A REGION WITH DIVERSIFIED ECONOMY

23.8

23.3

11.9

11.3

10.2

6.8

6.4

6.3

GRP Structure (%)

Processing industries Transportation and communications Retail and wholesale trade Agriculture

Construction Production and distribution of electricity Real estate operations Other2004 2005 2006 2007 2008 2009 2010

80

85

90

95

100

105

110

115

GRP BY SUBJECT OF RUSSIAN FED.

GRP BY SUBJECT OF NW REGION

LENINGRAD REGION

Major sectors of economy are:• processing industries,• construction, • transportation.

290 GRP (per capita, thousand rubles)(12th in Russia, 3rd in the NW region

GRP (billion rubles)(17th in Russia, 2nd in the NW region502

GRP index (% year on year)

5INDUSTIRAL PRODUCTION VOLUMES

Mining (bln. Rubles)(Share within Russia - 0.13%)

10966 429481

Production and distribution of energy, water and gas(bln. Rubles)(Share within Russia - 2,2%)

86376

Processing industry(bln. Rubles)

(Share within Russia - 2%)

28%

28%

17%

10%

9%

8% Shares in processing industry

Food and tobacco

Vehicles and equipment

Cellulose, paper, printing and publishing

Coke and oil products

Other non-metal mineral products

Other non-metal mineral products

6LENINGRAD REGION – AMONG

LEADERS OF INVESTMENT ACTIVITY IN RUSSIA

Capital investment (mln. rubles)

Leading regions in Investment-per-capita terms

2002 2005 2008 2011

28212

82859

166112

304770

Tumen Region Sakhalin Region Republic of Komi

Chukotka aut. distr.

LENINGRAD REGION

Republic of Yakutia

Evreyskaya aut. distr.

Amur Region Primorsk Region

Khabarovsk Region

377 365

215178 177 173

152 149 143 132

34%

26%

24%

15% Transportation and communications

Other

Processing

Production and dis-tribution of electrical energy, gas and wa-ter

Share of investment per type of economic activity

7INTERNATIONAL INVESTMENTS

34%

33%

13%

11%

10% Real estate opera-tions, renting and services

Processing industry

Production and dis-tribution of energy, water and gas

Other types of activity

Agriculture and forestry

Structure of foreign investment per country of origin

Structure of foreign investment per typeof business activity

Companies already present in the Region as investors

46%

23%

15%

8%8%

Cyprus

Finland

Other coun-tries

Denmark

USA

8

2. SEVEN DRIVERS OF YOUR SUCCESS IN LENIGRAD REGION

9SEVEN DRIVERS OF YOUR SUCCESS

IN LENINGRAD REGION

1

ACCESS TO KEY MARKETS IN EUROPE

2

DEVELOPED INFRUSTRUCTURE, INFRUSTRUCTURE FOR INTERNATIONAL ACTIVITY

3 A DEVELOPED MARKET OF BUSINESS SERVICES

4

A DEVELOPED INFRUSTRUCTURE FOR IMPLEMENTING INVESTMENT PROJECTS

5 HIGH QUALIFICATION OF LABOR RESOURSES AND FLEXIBLE LABOR MARKET

6

7

A SYSTEM IN PLACE TO FOLLOW THROUGH INVESTMENT PROJECTS

TAX BENEFITS AND OTHER MEASURES TO SUPPORT INVESTORS

10EVERY PROJECT IS IMPORTANT FOR US!

Agency for Economic Development of Leningrad Region

provides services in following through investment projects

1 Locating land plots or production premises required for implementation of investment projects

2Providing information required for implementation of an investment project, including requirements for utility connections, staff recruitment and training, project financing, suppliers and other.

3Providing support in receiving official approvals of project documentation, receiving construction permits and performing other required procedures.

11PROFIT TAX – FROM 18% DOWN TO 13,5%,

PROPERTY TAX FROM 2% DOWN TO 0%

Investment (mln. rubles)

Duration (years)

300 to 500 4

500 to 3000 5

Over 3000, (excluding automotive and machinery)

6

Over 3000 for automotive and machinery

8

Duration of tax benefits Requirements

Investment of over 300 mln. rubles

Certain types of business activity. Sales from specified types of activity to be no less than 70% of the company’s total sales

Benefits are provided after the subject of investment is put into operation

Support for small and medium business

Start-up allowances for business activity

Support of leasing activities

Subsidies to cover certification costs (partially)

Subsidies to cover interest on loans (partially)

12BENEFICIAL GEO-ECONOMICAL LOCATION

St.-PetersburgHelsinki

Riga

StockholmOslo

Warsaw

Copenhagen

Berlin

Prague

Amsterdam

London

Paris

380km

Saint-Petersburg agglomeration is the second largest consumer market in Russia, with 7 mln. inhabitants.

2005 2010 2011

5781.3

9638.9

14996

3183.94521.8

7494Exports

Импорт

13TRANSPORTATION INFRUSTRUCTURE

14OVER 50% OF EMPLOYED HAVE HIGHER

OR MIDDLE PROFESSIONAL EDUCATION

27%

27%

27%

16%

4%

Higher professional

Middle provessional

Basic professional

complete middle (general)

base general

Structure of labor resources per level of education

12%

20%

11%

16%

7%

34%

Agriculture, forestry, fish industry

Processing industry

Construction

Wholesale and retail, services

Transportation and commu-nications

Other

Structure of labor resources per type of business activity

Greater part of labor resources is employed in processing industries and services

15

Priozerskiy

Vyborgskiy

Vsevolozhskiy

Sosnovoborskiy

Lomonosovskiy

Kingiseppskiy

Slancevskiy

Volosovskiy

Luzhskiy

Gatchinskiy

Tosnenskiy

Kirovskiy

Kirishskiy

Volhovskiy

INDUSTRIAL PARKS OF LENIGRAD REGION

1. Industrial park «GREENSTATE» 112 hec.

2. Industrial park «Marienburg» 34 hec.

3. Industrial park «Doni-Verevo» 183 hec. 4. Industrial park «Prinevskiy» 12.7 hec.

5. Industrial park «KOLA» 123,7 hec.

6. Industrial park Morozova 26,5 hec.

7. Industrial park «Utkina Zavod» 140 hec.

8. Industrial zone «Kirpichniy zavod» 20 hec.

9. Industrial zone «Fornosovo» 256 hec.

10. Industrial zone in Tosno 100 hec. 11. Industrial zone «Ulianovka» 135 hec. 12. Industrial zone «Krasnoborkaya» 270 hec.

13. Industrial park «Fedorovskoe» 120 hec.

< 30 hec. 100 to 200 hec. over 200 hec.

16LENIGRAD REGION AND CITY OF ST.-PETERSBURG ACCOMODATE:

8,5% Russia’s construction companies

Russia’s hotel companies 3,7%

6,2% Russia’s financial companies

Russia’s real estate companies9,2%

Russia’s transportation and communication companies

9,6%

17

3. LARGEST INVESTMENT PROJECTS OF LENINGRAD REGION

18DEVELOPMENT OF UST-LUGA

SEA PORT AND ADJAСENT AREA

Recreational cluster Transportation and

logistics cluster

Residential cluster (city)

Agricultural cluster

Industrial cluster

2011 2015 2020 2025 2030

22.7

128.2

150.2160.2 165.2

Freight traffic forecast for Ust-Luga port

Five clusters of Ust-Luga Total area - 10 000 hectares, including 3000 hectares of Industrial cluster

Over 600 billion rubles to be invested

Over 50 companies

Over 17200 employees

Time line 2011-2030

UST-LUGA

19REGIONAL INDUSTRIAL PARK

Goals: Improving investment attractiveness and developing industrial potential

Tusks:

- Support of clusters already developing in the region,

- Modernize machinery and electronics sectors,

- Complete infrastructure for manufacturing facilities.

Location: Tosno District

Distance from: Saint-Petersburg (ring road) – 35 km Federal highway (St.-Petersburg-Moscow) – 0 km

Size: 100 hectares

Infrastructure : will be financed by regional budget

Time line: 2013-2014

Automobile parts (OEM)

Port equipment

Construct. equipment

Forestry equipment

Agricultural equipment

Electronics

20DEVELOPING THE NORTH-WESTERN

NANOTECHNOLOGICAL CENTER

Specializing in: neutron technologies, nano-materials and nano-electronics

Location: Gatchinskiy district of Leningrad Region

Timeline: 2013-2015

Project budget: 1,2 bln. rubles

Participating parties: Government of Leningrad Region, “Rosnano”

Partners: St.-Petersburg Institute of Nuclear Physics, Saint-Petersburg National Research University

Structure:

Two technology buildings (1000 sq. m each) and one business-incubator (1 000 sq. m)

Services: - Structuring and

“packaging” of innovation projects;

- Consulting services, including management consulting;

- Marketing services;- Technological

consulting;- Patent and legal

services;- Financing services;- Equipment rental;- Premises rental.

Contact information:

Committee for Economic Development and Investment Activity of Leningrad Region Phone: + 7 812 274 14 46Fax: +7 812 274 64 30econ@lenreg.ru

Agency for Economic Development of Leningrad Region

Phone: + 7 812 576 41 35 Fax: +7 812 576-66-54 aerlo@lenreg.ru

Thank You for Your attention!