Russia’s Eurasian Diamond Centre (EDC) has established a facility in the Vladivostok Free Trade Zone to create a diamond infrastructure cluster in the Russian Far East that will unite the companies of the industry and will focus on export-import operations with the countries of the Asia-Pacific region, the Ministry for the Development of the Russian Far East said on Thursday. The EDC is part of ARLOSA, a group of Russian diamond mining companies and a world leader in the diamond mining industry, holding the world’s largest diamond reserves in Yakutia.
The Eurasian Diamond Centre opens up opportunities for companies in the rough and polished diamond industry, and also for retailers and jewelry manufacturers, including the luxury segment, cultural values and antiques markets participants. The unique platform allows developing and implementation of new manufacturing technologies, holding of exhibitions and regular auctions of precious gems and opening of new market channels.
Foreign investors have already been investing in the facility. India’s KGK Group of companies, a global leader in gems and jewelry, expects to employ up to 500 people at their new facility (also near Vladivostok), and have been granted a certificate of residence for the Free Trade Zone, giving them tax and customs preferences, and lower shipping costs.
The opening event was attended by Yury Trutnev, Deputy Prime Minister of Russia and Presidential Envoy to the Far Eastern Federal District, AK ALROSA President Andrei Zharkov, and head of the Republic of Sakha (Yakutia) Yegor Borisov. Trutnev stressed that the opening of the Centre was the company’s response to the government’s initiative. “Russia is the world’s biggest producer of diamonds. Yet our diamonds are sold in other countries and cities, and they are also cut there. We should learn how to sell diamonds, how to make gems out of them, and how to make jewellery pieces out of gems. This will allow us to create more jobs, thus, boosting the development of Russia and the Far East.”
The EDC is expected to attract considerable attention from China, Hong Kong, Singaporean, Indian, and Japanese dealers, with the expectation of a tripling of sales of Russian diamonds in the Asian market.
Chris Devonshire-Ellis of Dezan Shira & Associates comments, “Foreign businesses in Asia need to get used to the fact that Vladivostok is a new and fast growing Asian sea port. The Free Trade Zone there is well connected in terms of rail, shipping, and air. It gives access to Siberian commodities and is well positioned to also allow access to Asia’s massive consumer base – Shanghai is only a three hour flight, and the city, port, and free trade area can be entered for 8 days with visa free access. Businesses involved in the gem and jewelry industries in Asia now need to be looking at Vladivostok as a trading hub.”
Chris Devonshire-Ellis is the Founding Partner and Chairman of Dezan Shira & Associates. He is based in Europe. The firm provides European businesses and governments with strategic, legal, tax and operational advisory services to SMEs and MNCs investing throughout Asia and has 28 offices across China, India and the ASEAN nations as well as St. Petersburg and Moscow. Please contact the firm at firstname.lastname@example.org or visit the practice at www.dezshira.com
Dezan Shira & Associates´ Russian investment brochure offers an overview of the services provided by the firm – both foreign investment into Russia and Russian investment into Asia. It is Dezan Shira´s mission to guide investors through Russia´s complex regulatory environment and assist with all aspects of establishing, maintaining and growing business operations in the region.
In this issue of Russia Briefing, we explain the basics of business set up for foreign investors, from trademark registration, representation, trading mechanisms, and manufacturing. With low corporate tax rates, Russia is set to become the most dynamic of the trade corridors opening up to Asia.