Conclusion of Formation and Corporate Agreement to Establish Japanese Project Promotion Vehicle in the Russian Far Eastern Region
Facilitating and enhancing investment by Japanese companies in the Russian Far Eastern Region
- Region: Europe
- Equity Participations
The Japan Bank for International Cooperation (JBIC; Governor: Akira Kondoh) signed on April 27, a Formation and Corporate Agreement with The Far East Investment and Export Agency*1
(FEIA) and JSC The Far East and Baikal Region Development Fund*2
(FEDF), to establish a joint venture company named the Japanese Project Promotion Vehicle in the Far East Limited Liability Company ("Far East JPPV")*3
, and the signed agreement was exchanged among the parties during the visit of Prime Minister Shinzo Abe to Russia.
The purpose of Far East JPPV is to enhance Japanese companies' investment in Advanced Special Economic Zones*4
("ASEZs") and the Free Ports*5
in the Russian Far East Region, by mitigating the concerns of Japanese companies involved in project formation through its coordination with Russian governmental authorities and providing tailored advisory services. Far East JPPV will utilize the status and the network of the FEIA, FEDF and JBIC as governmental institutions, to effectively achieve its purpose.
The Russian government positions the development of the Russian Far Eastern Region as one of the top priorities and is willing to promote further foreign investments toward this region, including the investments from Japanese companies. The establishment of Far East JPPV thus is in line with the policy of the Russian government and it is also expected to contribute to maintaining and strengthening the international competitiveness of Japanese companies through promotion of Japanese companies' investment.
As Japan's policy-based financial institution, JBIC will continue to support Japanese companies' business activities in Russia through its coordination with the Russian governmental institutions, and thereby contribute to further deepening the economic relations between Russia and Japan.
- *1 FEIA, established in 2016 under the Ministry for the Development of the Russian Far East, conducts public relations and other activities to attract investment into the Russian Far Eastern Region.
- *2 FEDF, established in 2011 by Bank for Development and Foreign Economic Affairs (Vnesheconombank), aims at promoting development in the Russian Far Eastern Region.
- *3 JBIC signed a Term Sheet with FEIA and FEDF for establishing Far East JPPV LLC on 15 December 2016.
- *4 ASEZ is a region where preferential tax treatment and deregulation have been introduced with a purpose of promoting private-sector investment. Currently, 13 areas in the Russian Far Eastern region are designated as ASEZs, including Khabarovsk.
- *5 Free Port is also a region where preferential tax treatment and deregulation have been introduced with a purpose of promoting private-sector investment as is the case with ASEZ. Currently, 5 areas in the Russian Far Eastern region are designated as Free Ports, including Vladivostok.