Taxation & Incentives

Key provisions of the tax regime:

• Full exemption from all types of taxes for activities carried out by SFIT entities on the territory of Tamchy SFIT (Art. 19(2) of Law No. 136, Art. 467(1) of KR Tax Code).
• Exemption period: 49 years from the date the Law enters into force (until July 21, 2074).
• Activities carried out by SFIT entities outside the SFIT territory (elsewhere in the KR) are taxed under the general KR tax regime (Art. 465(2), Art. 467(3) of KR Tax Code).
• SFIT entities shall fulfill state social insurance obligations, including those that cover their employees (Art. 19(3) of Law No. 136).
• Tax administration for goods crossing the SFIT border is carried out under EAEU legislation and KR customs legislation (Art. 467(2) of KR Tax Code).
• Goods exported from SFIT to the rest of the KR territory are taxed in accordance with KR tax legislation (Art. 467(3) of KR Tax Code).

Customs Regime (Art. 20 of Law No. 136)

• Free customs zone procedure applies at SFIT: SFIT entities may bring and use goods without payment of customs duties and taxes.
• SFIT is part of the EAEU customs territory.
• SFIT is not a customs control zone under the EAEU Customs Code.
• SFIT entities may carry out economic activities using foreign goods and EAEU goods.

Currency Regime (Art. 21 of Law No. 136)

Free circulation of foreign currency and virtual assets, including in the course of the provision of services and settlements between legal entities and natural persons. Settlements with foreign participants may be conducted in any currency by agreement. The Council may make decisions on the issuance of virtual assets and other settlement methods on SFIT territory.

Financial Activities (Art. 13 of Law No. 136)

• The SFIT Financial Regulator is in charge of licensing and supervision of financial activities and is not accountable to the National Bank of the KR.
• Establishment of stock, currency, and cryptocurrency exchanges, banks, crypto-banks, brokers, and other financial institutions is permitted.
• Financial institutions of SFIT are not subject to KR legislation on banks, securities markets, or virtual assets.
• AML/CFT compliance is mandatory.

Legal Regime (Art. 18 of Law No. 136)

• SFIT regulations are based on the principles of the English legal system and other common law jurisdictions.
• Civil, financial, labor and procedural relations are regulated by SFIT regulations.
• Conducting permitted activities at SFIT may not be considered a violation of KR regulatory legal acts.
• Norms of the Civil Code, Land Code, CPC, Labor Code, tax and migration legislation of KR apply only insofar as not regulated by SFIT regulations (Law No. 137).

Labor Regime (Art. 23 of Law No. 136)

• Entities and governing bodies may hire foreign nationals without KR work permits.
• Hired foreign nationals are exempt from obtaining KR work permits.

Investor Protection (Art. 24 of Law No. 136)

• SFIT entities enjoy the same benefits as investment residents under KR legislation.
• Interference in SFIT activities by any government agency or local authority of the KR is prohibited.
• SFIT governing bodies are not accountable to KR state bodies, except as provided by Law.