5. Market economies work on the assumption that market forces, such as supply and demand, are the best determinants of what is right for a nation’s well-being. These economies rarely engage in government interventions such as price fixing, license quotas and industry subsidizations. While most developed nations today could be classified as having mixed economies, they are often said to have market economies because they allow market forces to drive most of their activities, typically engaging in government intervention only to the extent that it is needed to provide stability.
6. In accounting, an economic entity is one of the assumptions made in generally accepted accounting principles. Basically, any organization or unit in society can be an economic entity. Examples of economic entities are hospitals, companies, municipalities, and federal agencies.
7. Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; (also) an item of real property; (more generally) buildings or housing in general. Also: the business of real estate; the profession of buying, selling, or renting land, buildings or housing.
Task 6. Determine the key information in each paragraph of the text “Industrial and Economic Potential of the Krasnoyarsk Krai” and the corresponding key concepts, words and expressions; write them down in the language of the original text.
Task 7. Find the Russian equivalents of the written down English words and expressions from the text “Industrial and Economic Potential of the Krasnoyarsk Krai” (Task 6).
Task 8. Translate the first seven paragraphs of the text “Industrial and Economic Potential of the Krasnoyarsk Krai” into Russian, using the words and expressions from Tasks 6–7 and a dictionary if necessary.
Task 9. Summarize in English the main ideas of the text “Industrial and Economic Potential of the Krasnoyarsk Krai”; give a 300–350 word written summary.
Text 4. Legislative Acts Regulating Investment Activity
Task 1. Read and study the following text, referring to the vocabulary list given below.
There are following legislative acts that regulate investment activity in the Krasnoyarsk Krai:
• Constitution of the Russian Federation;
• Civil Code of the Russian Federation;
• Investment Activity Act;
• Investment Activity in the Form of Capital Investments Act;
• Russian Federation Federal Act on Foreign Investments;
• Leasing Act;
• The law of the Krasnoyarsk Krai “On state support of investment activity in the Krasnoyarsk Krai”.
The law “On state support of investment activity in the Krasnoyarsk Krai” is aimed at the development of investment activity in the region, creation of the most favorable conditions for the investors and establishes additional guarantees of investment activity which are carried out in the form of capital investments in the Krasnoyarsk Krai.
General principles of state support of investment activity in the Krasnoyarsk Krai are:
1. Objectivity and economic validity of the decisions made.
2. Transparency and availability of information necessary for realization of investment projects for investors.
3. Purpose-oriented character of regional budget distribution.
4. Efficiency and economy of the regional budget use.
5. Diversification of risks between investors connected with realization of the investment projects.
6. Equality of investors and unification of public procedures.
7. Mutual responsibility of territorial state government bodies and investors.
8. Equation of state interests and interests of the investors.
The basic form of investment activity state support is the regime of creating the most favorable conditions for stimulation of investment activity, which is carried out by granting to the investors:
1. Tax benefits.
2. State guarantees of the Krai.
3. Budget investments into the authorized capital of legal persons.
4. Budget credits.
5. Investment tax credits.
6. Privileges on immovable property rent.
7. Subsidies for compensation of a part of expenses on payment credit interests at Russian crediting organizations for realization of the investment projects or leasing payments paid to the Russian leasing companies for the property got under the leasing contracts for investment project realization.
8. Other financial and non-financial forms of support, including rendering information and consulting assistance to the investors within the limits of power given to the territorial state authorities by the current legislation.
Activity of investors at mineral raw-materials complex is regulated by Earth bowels Federal Legislative Act and Federal Legislative Act: Concession Agreement Act. Nowadays the entrepreneurial mechanism, based on tax schemes, which has much in common with product sharing agreements is the most expedient at mineral resources processing. That would let to achieve a long-term compromise between the State and an investor.
The product sharing agreement is a development contract for mineral resources searching, prospecting and extraction for a fixed period.
The product sharing agreements are signed by the government with competition or auction winner realized in the course of statutory legislation and coordinated terms, but not later than one year from the day of declaration of the results of the competition or the auction.
Deposit can be included in a field’s exploitation list if it has substantiations of the Government of Russia for inclusion that’s deposits in mentioned lists. Development of minerals is allowed at 30 percent interest of the explored and accounting reserves by the State. The investors can be legal persons or created on the basis of the contract associations of legal persons. License for right of development is given to investors by the terms of the Agreement.
Production is subject to division between the State and investor in accordance with the terms of the Agreement in the following way:
• fixing general quantum of output and production value;
• fixing of quantum part of output, which is passed to investor for compensation of its expenditure on execution phase by the Agreement (compensatory production).
The maximum level of compensatory production must not overdraw 75 % and 90 % on the assumption of mining on continental shelf of the Russian Federation – 90 % total volume of production output. The structure of costs for compensation to the investor at the cost of compensatory production finds its position in the legislation of the Russian Federation (Clause 8 FS Division of Production);
• division of profitable production (produced productions) between a state and an investor produced during realization of the agreement (Clause 8 FS Division of Production), except for the part of that production exploitable for discharge of natural resources for the use (Clause 8 FS Division of Production) of the earth bowels in accordance with the legislation of the Russian Federation and compensatory production;
• transfer the state-owned part of produced productions or its cost equivalent according to the terms of the Agreement;
• delivery of the produced productions belonged to the investor according to the terms of the