PDF, 3464 KB - Roland Berger
PDF, 3464 KB - Roland Berger
PDF, 3464 KB - Roland Berger
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e<br />
Decree 166 allows to avoid import duties on components in echange<br />
for the gradual localization of the products<br />
Duration of validity • Greenfield – 8 years<br />
• Brownfield–7years<br />
Tariff duties for the<br />
import of components<br />
Decret 166 – "Industrial assembly" (April 2005)<br />
• From Ø 14.5% to Ø2%(weighted average 2) )<br />
Required investment • No minimum investment<br />
Requirements on the<br />
production volume<br />
Requirements on<br />
manufacturing content<br />
Local content<br />
requirements 1)<br />
• Minimum production capacity 25,000 units/a (2 shifts) – no regulation<br />
on actual production output<br />
• Welding/Painting/Assembly<br />
– Greenfield 30 months after SOP 3)<br />
– Brownfield 18 months after SOP 3)<br />
Local integration targets as reduction in value of the standard component<br />
list (can be achieved through paying regular duties on the components)<br />
• 10% – 24 months after SOP 3)<br />
• 20% – 42 months after SOP 3)<br />
• 30% – 54 months after SOP 3)<br />
Examples • SOK (KIA), SeverstalAuto (FIAT)<br />
• Planned: Renault , Toyota, Volkswagen<br />
Further requirements<br />
"Hard" requirements:<br />
• Applying company must be<br />
a Russian legal entity<br />
• Yearly reporting to Russian<br />
authorities<br />
• Usage of imported<br />
components (at reduced<br />
duties) only for industrial<br />
assembly<br />
Can be changed:<br />
• Project itself (greenfield or<br />
brownfield)<br />
• Business plan<br />
• Production plan and<br />
production output<br />
• Investment value<br />
1) Based on (supplier) ex-works value of imported components 2) Based on an average C class car cost structure<br />
3) SOP means in this case start date of the agreement<br />
Source: Russian tariff regulation; Ministry of economic development and trade, Interviews<br />
MUC-90007-497-09-03-E.ppt 36