INVESTMENT PRESENTATION OF

THE PRIDNESTROVIAN MOLDAVIAN REPUBLIC

TABLE OF CONTENTS

State system

Power Supply and Gasification

Transport Infrastructure

Agriculture and Industry

Touristic-Recreational Opportunities

PMR

General information

Regional Peculiarities of Investment Policy

The Pridnestrovian Moldavian Republic (Pridnestrovie) is a state located in the south-eastern part of Europe which occupies the left bank of the Dniester River within the borders of the former Moldavian SSR and a number of localities on the right bank – the city of Bendery with adjacent villages, as well as villages of the Slobodzeya region such as Kopanka, Kitskany, Mereneshty, and Kremenchiug

Pridnestrovie shares borders with the Republic of Moldova on the west (411 km) and Ukraine on the south-east (405 km)

Landlocked Total square is 4163 km² (10% of the territory of the

MSSR)

General Information

1. Moldovans – 31,9%2. Russians – 30,4%3. Ukrainians – 28,8%

26

28

30

32

31.930.4

28.8

Population – 522 500

Official Languages

Monetary Unit

Moldovan, Russian, Ukrainian

Pridnestrovian Ruble 1 ruble = 100 kopecks

Administrative-Territorial System

PMRSlobodzeyaSlobodzeya

BenderyBendery

DubossaryDubossary

GrigoriopolGrigoriopol

DnestrovskDnestrovsk

KamenkaKamenka

TiraspolTiraspol

RybnitsaRybnitsa

President of the PMR

Head of the State, Guarantor of the PMR’s Constitution and Laws, Human and Citizens’ Rights and Freedoms, the Commander-in-Chief of the Armed Forces of the Pridnestrovian Moldavian Republic

PMR’s State System

The Pridnestrovian Moldavian Republic is a Presidential Republic

• Supreme Council

Consists of 43 deputies

• Constitutional

• Arbitration

• Supreme

• Courts of general jurisdiction

• Government

• Chairman of the Government

• Vice-Chairmen of the Government

• Ministers

• Heads of Public Administrations of Towns and Regions

Legislative

Executive

Judicial

State Powers of the PMR

Power Supply

Export power energy to the

CIS- and far-abroad countries

Installed capacity is 12

energy blocks,

makes up 2520 MW

Major fuels are gas and coal

Installed capacity makes up

48 thousand kW, annual

average output - 260 mln.

kWh.

Moldovan GRES

Dubossary GES

Gasification of Pridnestrovie

97% localities

of the PMRare gasified

192 300 Dwelling houses and apartments

are gasified

85% Dwellinghouses about 4.2 thousand

km of high-, medium- and low-

pressure gas pipelines

are maintained

Transport Infrastructure

two trunk highways of international significance

three gas mains two international trunk railroads

Territory of Pridnestrovie

IX Pan-European Transport Corridor comprises road and railroad componentsmain route’s length – 3 400 km, total length – 6 500 км

Transport CorridorGdansk-Odessa

Corridor’s length – 1816 kmacross Ukraine: railway line – 918 km

highways – 1208 km

Transport Corridors

Black Sea Cargo Port in Ilyichevsk

(Ukraine) about 150 km from Tiraspol

Reni Port(Ukraine)

on the Danube(about 300 km from Tiraspol)

Giurgiuleşti Port (Republic of Moldova)

on the Danube(about 300 km from Tiraspol)

Cargo Ports

Raw Materials Base for Construction Activities

Pridnestrovie features its own base of raw materials:

cement, limestone, sand, gravel and others

Republic has functioning enterprises

JSC Moldova Steel Works (Rybnitsa)

CJSC Rybnitsa Cement Plant

JSC Moldova Steel Works

marketable continuous cast steel billets with cross section area 125x125 mm and length 8000-12000 mm

round bars in rods (diam.10-22 mm) and in coils (diam.5.5-14 mm)

reinforcing bar in rods and coils with nominal diam. 6-40 mm

wire rod for production of fasteners by cold heading (test lots)

shape steel-rod stock (equal angle bars of 25 mm; 32 mm; 35 mm; 40 mm; 45 mm; 50 mm according to CIS and major international standards -DIN, ASTM, BS, EU etc., steel channel №5)

CJSC Rybnitsa Cement Plant

Cement Construction lime

Agriculture

Pridnestrovie has rich fertile lands, favourable climate conditions, sufficient water resources (the River Dniester) for land reclamation, large number of sunny days per year (the average

July temperature is +21 C) and moderate winter temperature (average January

temperature is -5 C)

Agriculture concentrates today 275,0 thousand ha of farmland, 230,2 thousand ha (83,7%) of which is arable and 21,0 thousand ha (7,6%) is occupied by perennial plantings.

Traditional and Priority Agricultural Sectors of Pridnestrovie

vegetable growing

gardening

growing of grapes

tobacco beet seed production

livestock farming

Challenges for Agricultural Infrastructure Facilities

restoration and modernization of water mains of the reclamation system

establishing new and maintaining available centers for cereal, vegetable and fruit breeding

formation of general republican structures for animal breeding, diary husbandry and poultry farming

creating plant protection and veterinary centers

opening of machine and tractor centers

establishing the system of crop insurance

futures lending and provision of financial services for purchase of agricultural equipment and leasing

creating new and modernizing old enterprises for processing and conservation of agricultural products

Why Pridnestrovian Agriculture Is Investment-Worthy

free market of home-produced foodstuffs. Pridnestrovie imports over 11.4% of foodstuffs (73.7% of the volume of realized food products in the domestic market). Their volume makes up about 200 mln. U.S. dollars

existing rich traditions and production experience in vegetable growing, gardening, growing of grapes and wine and cognac production

Sectors of Industrial Complex

Power energy

Iron and steel industry

Light industry

Building materials industry

Machinery and metal working

Electro-technical

Chemical

Woodworking

Furniture

Printing

Vitreous

Types of Industrial Products

Pridnestrovian Industry comprises144 enterprises

Power energy Apparel Big electric machines

Low-voltage equipment

Cable products Cotton fabrics Rolled steel products Pumps

Cement Fiberglass and

fiberglass products

Furniture Footwear

Equipment for foundry

Electric insulating materials

Touristic-Recreational Opportunitiesof Pridnestrovie

Dniester Health Resort in Kamenka

Dnestrovskie Zori Recreational Complex

Health Resort “Dniester”(Kamenka)

It is a large specialized balneo-climatic health resort. This region is often called little Switzerland. Here one can find a successful combination of mountain and river air, mild winters, continuous

warm summer, barometric pressure and relative humidity perfect for health improvement and proper rest.

Diagnostic and treatment base of the health resort features all necessary modern methods of treatment and diagnosis. The main factors for good rest and fruitful treatment are aerotherapy, air and sun bathing, swimming in the water of the Dniester. Directly on the territory of the health center there is a functioning well of medical-

mineral water “Dnestryanka”.

The health resort is located on the very bank of the Dniester. Parkland occupies more than 20

hectare and is surrounded by a hundred-meter rocky hill which fosters special climate

conditions..

Recreational Complex“Dnestrovskie Zori”(“Dniester Dawns”)

Plenty of sunny days, picturesque forest area, clear river air of the Dniester valley and available natural springs of mineral water of

the “Truskavets” type create excellent conditions for rest and treatment.

Health complex occupies 50 hectare of forest, has four double-stored capital residential buildings with rooms equipped with all modern conveniences. Main treatment features of the “Dniester

Dawns” health center are climatotherapy and balneotherapy based on the use of natural mineral water.

Chemical effects of the mineral water on the organism are directly connected with the presence of hydrogen sulfide, sulfates, chloride

of sodium, iodine, bromine, and calcium in it.

Health complex is located on the bank of the Dniester River in the village of Mereneshty,

between Tiraspol and Bendery.

Natural and Cultural-HistoricMonuments of Pridnestrovie

Grigoriopol Region

Glinoye Village – building of the Polish

church of 1846

Karmanovo Village – building of the Protestant Church of XIX c.

Teya Village – building of the

church of XIX c.

Malayeshty Village –

nature reserve

Slobodzeya Region

Chubruchi Village –National Park

of Landscape Art named after D.K.Rodin

(1958)

Kitskany Village – Novo-Nyamensky

Monestary Complex

Turunchyuk island (area - 8 800 га),

Turunchyuk River, rapids – opportunities for sport

fishing, active leisure

Kapi Lake

Dubossary Region

Nature Reserve

“Yagorlyk”

Rogi Village – rocky

monasteries

Rogi Village- Kochiery Village (river band, left bank) – opportunities

for hang-gliding

Novaya Lunga up to Grigoriopol - canyon,

Tamashlyk Valley with a waterfall

Kamenka region

Oknitsa village - Scythian burial

mound, II century B.C.

Rashkovo village

Nature Reserve – natural landmark

“Deep Valley”

Krasnaya (Red) Mountain

(opportunities for hang-gliding)

Village Valia-Adynke – Cave of Ustim

Karmelyuk

Rybnitsa Region

Vykhvatintsy village• Rock shelter of the Paleolithic age, 350 B.C. – the oldest early men site on the territory of the

PMR, one of the few sites of this period in Eastern Europe • Mafteya Ravine (area of 70 ha) is accumulation of instruments of labour of the Stone Age man

• Tripolye. Memorial sign near the burial ground. Monument to one of the most prominent cultures of the Ancient World.

• Building of the music school named after G. Rubinstein. The year of construction – 1901 (1829-Russian composer was born in the village of Vykhvatintsy; 1901-music school was built; 1979-

museum was opened).

Stroentsy village• The Tower of Winds is the monument to Field-Marshal Peter Wittgenstein erected by his

granddaughter Emilia Trubetskaya, XIX c.• Terraced vineyards built by Trubetskoy family in the middle of the XIX c.

• The Mill is the monument of the XIX c., one of the most advanced constructions of that period. Swiss equipment.

• The Church, built in 1829 on the means of P. Wittgenstein• “Stroyenetsky Ravine” – 1200 ha (stretched from the village of Yantarnoye to the village of

Belochi): sinkhole, waterfalls, brooks, rocks of peripheral part of reef formations of limestone of different colours, springs with hydrogen sulfide and iron oxide.

Belochi village

• Watermill on the small river Zolotaya (Golden) is a construction of 1884-1894; mechanisms of unique construction are from Zurich (Switzerland)

• Stone Cross – a monument to fallen Cossacks in 1675• Building of the stable and kitchen of Matkovsky’s estate (ice storage room, cellar) – a

monument of XVIII - XIX cc.

Villages of Popenki and Zozulyany - ancient villages,

ethnographic tourism is possible

Village of Bolshoy Molokish: canyon, springs.

Dialect of the Moldovan language - opportunities for ethnographic tourism

Voronkovo Village: preserved traditions

of carpet weaving and folklore

Butuchany Village: nice recreation area. Place opportunity for

children’s camp.

Rybnitsa Region

Foreign investors in the PMR

Foreign states

International organizations

Foreign legal persons

Foreign citizens and, in cases expressly provided by the legislation, stateless persons

Investment funds functioning on the territory of the PMR and carrying out investment activity based on attracted foreign capital

Types of Investment

freely convertible or other foreign currency which is the object of operations carried out by banks and investment funds

machines and equipment

property and non-property rights transferred by an investor, including the right to intellectual (industrial) property

Capital Expenditures of Organizations according to Forms of

Property

49%

30%

20%

2011

private ownership

foreign ownership

state ownership

Competitive Advantages of the PMR

Convenient transport and geographic location which favours the development of industrial and agricultural potential

Important road and railroad main lines and gas lines running through the territory of Pridnestrovie and linking Russia and Ukraine with countries of Eastern and South-Eastern Europe

Republic’s location in the area with high agro-climatic and biological and soil potential

Availability of extensive production infrastructure and highly qualified personnel

PMR’s Investment Legislation

Law on Investment Activity

Law on Foreign Investment on the Territory of the Pridnestrovian Moldavian Republic

Law on Tax on Income of Organizations

Law on Customs Tariff

Law on State Support to Innovation Types of Activity

Customs Preferences

customs benefits when importing property – for those enterprises whose share of foreign investment in the registered fund (capital) makes up no less than 30% and amount of foreign investment in the registered fund (capital) of the enterprise is more than 10 thousand U.S. dollars, or the sum of foreign investment in this enterprise exceeds 25 thousand U.S. dollars, regardless of the share amount in the registered fund (capital) of the enterprise

exemption from payment of customs duty, excise duty and import tax on tangible and intangible assets imported by a foreign investor to Pridnestrovie as a property deposit when forming or increasing registered capital of the enterprise

customs benefits in the form of tax-free import of goods, works and services for own production and export of goods, works and services of own production – for those enterprises whose share of foreign investment in registered capital makes up no less than 30% and the sum of foreign investment in registered fund exceeds 50 thousand U.S. dollars, or the sum of foreign investment in the enterprise exceeds 150 thousand U.S. dollars regardless of the share amount in the registered fund

Tax Preferences

by 10% - when amount of investment is between 10 000 U.S. dollars and 250 000 U.S. dollars

by 30% - when amount of investment is between 250 000 U.S. dollars and 500 000 U.S. dollars

by 50% - when amount of investment is more than 500 000 U.S. dollars

Organizations with foreign investment with more than 50% of revenue from sales of products (works, services) of own production are entitled,

during 5 years after receiving the first income from sales of products (works, services) of own production, to reduced tax rate on income from sales of products (works, services) in the following amounts, depending on the amount of actually introduced foreign investment in the registered

found (capital) of organizations:

Preferences for Investors in Innovation Types of Activity for the Period of:

10 years – in case of actual or planned investment in the building and (or) reconstruction of objects, purchase and adjustment of equipment as part of implementation of the registered innovation project of no less than 1.7 mln. Euros and creation of additional jobs with average number of employers of no fewer than 80 people

5 years – in case of actual or planned investment in the building and (or) reconstruction of objects, purchase and adjustment of equipment as part of implementation of the registered innovation project of no less than 0.85 mln. Euros and creation of additional jobs with average number of employers of no fewer than 50 people

3 years – in case of actual or planned investment in the building and (or) reconstruction of objects, purchase and adjustment of equipment as part of realization of the registered innovation project of no less than 0.3 mln. Euros and creation of additional jobs with average number of employers of no fewer than 20 people

up to 3 years – in case of actual or planned investment in the building and (or) reconstruction of objects, purchase and adjustment of equipment as part of realization of the registered innovation project of less than 0.3 mln. Euros and creation of additional jobs with average number of employers of fewer than 20 people

Areas of Investment Activity

additional preferences for economic activity in the industrial sector, in the field of new technologies, in the sphere of processing of agricultural products (in the form of tax holidays for newly established manufacturing enterprises and free economic areas for depressive regions and localities)

shaping precise and stable legislation defining organization and conduct of business, introduction of simplified and preferential tax regimes for economic entities developing and implementing new types of production and IT technologies

drawing up simpler and faster administrative procedures for approval of new investment projects to be launched

conclusion of direct agreements with investors on mutual and stable commitments to ensure state support of major investment projects providing for obligations for allocation of land, supply with infrastructure communications and tax incentives – on the part of the state, and obligations to create jobs, ensure volume of production and provide employment in the specific territory – on the part of the potential investors

protection of investors from monopolists abusing their dominant market position

final formation of existing normative-legal acts suggesting the possibility of building an efficient “business-state” tandem based on partnership, with sectors of production having all forms of ownership, not only state or private, since withdrawal of the state from all sectors of economy is unreasonable

reforming accounting and financial reporting in compliance with international standards and that of the Russian Federation

final formation of transparent rules of carrying out foreign economic activity, simple, fast and open procedures of customs clearance and control over movement of goods across the border

introduction of “good conduct of activity” criteria for economic agents, according to which subjects (investors) with positive image of economic activity can get the so-called “green corridor” at all government authorities in order to minimize expenditures on relevant procedures, inter alia during customs control

attraction of foreign investments in the economy of the state by creation under auspices of the Ministry of Foreign Affairs of the Pridnestrovian Moldavian Republic of the network of Pridnestrovian trade-economic representations using opportunities of legal systems of hosting countries