Investors prefer to open new enterprises in regions other than Moscow due to high salaries in the city, Alexander Prokhorov, head of the Moscow Department of Investment and Industrial Policy, said at a RIA Novosti news conference on Wednesday, November 6.
According to Alexander Prokhorov, Moscow has a series of competitive advantages that other regions do not have, but many investors prefer to open new businesses outside of Moscow.
“It is simply cheaper,” Prokhorov explains.
He said that Moscow officials are trying to encourage the opening of new enterprises in the city. In particular, Moscow has signed six special investment contracts worth RUR 8.3 bln ($130 mio) with the city’s enterprises in the past year. A special investment project is an industrial policy tool: a region signs an agreement with a private company. The private investor undertakes to build a new facility, while the state guarantees the stability of the tax legislation and provides state support. According to Prokhorov, Moscow signed six such contracts between October 2018 and October 2019.
In addition, 19 agreements on granting the status of a special economic zone have been issued over the past year. This allowed for creating an additional 1.7K jobs. Eight municipal enterprises also received the status of an industrial complex.
According to Prokhorov, another success of Moscow’s industrial development policy was the conclusion of eight export contracts worth RUR 3 bln ($47 mio).