Russian entrepreneurs interested in moving their business to China

Aleksandr Kalinin, head of one of the entrepreneurs' organizations, spoke about the growing interest of Russian entrepreneurs in Chinese industrial parks.

In an interview with "Vedomosti" on the sidelines of the Eastern Economic Forum, the businessman pointed out that the Chinese are actively encouraging companies from the Russian Far East to register their businesses on the other side of the Amur.

The Chinese offer is expected to include lower taxes, cheap financing and grants for capital spending.

Lower VAT and easier access to financing

The DRT consulting company, previously operating in Russia under the Deloitte brand, confirmed that companies are showing interest in relocating to China. Data from the B1 company show that there are currently approximately 3.8 thousand companies in China. organizations with Russian participation.

These are primarily importers, producers of electronics and appliances, consumer goods and car parts. Companies from the light industry sector are also represented.

As Natalja Chobrakowa, associated with B1, emphasizes, the VAT rate is to be an important argument. According to data quoted by "The Moscow Times", it is 13 percent in China. for most goods, while in Russia it is expected to reach 22%. A reduced rate of 3% is available for small businesses in China.

Loans are an additional incentive. Russian companies have limited access to cheap financing due to high interest rates in the country. China, however, offers loans whose interest rates - according to business representatives - may be around 3%.

Relocating large plants remains difficult

However, experts point out that moving to China is not an easy solution for every company. Relocation of a large factory, heavy industrial enterprise or activity requiring extensive infrastructure involves high investment costs.

Settlements between China and Russia are also a serious problem. Banks may change payment requirements, and operations may be limited depending on the counterparty, type of goods or transaction structure. Companies with foreign participation in China are also subject to banking and currency controls.