Analysts assessed Shchukin's call for businessmen to re-register their businesses in Dagestan.

THIS MATERIAL (INFORMATION) WAS PRODUCED AND DISTRIBUTED BY THE FOREIGN AGENT LLC "MEMO", OR RELATES TO THE ACTIVITIES OF THE FOREIGN AGENT LLC "MEMO".

Calls for large businessmen of Dagestani origin to re-register their businesses in the republic have been made before. However, against the backdrop of mass reductions in small and medium-sized businesses in the republic, this is unlikely, and it is also unclear what benefits they will receive, analysts said.

As reported by "Caucasian Knot", on October 15, the deputies of the Dagestan parliament elected Fyodor Shchukin as the head of the republic with 78 votes out of 87. Speaking before the deputies, he pointed out the need to develop the economy and, in particular, to increase tax collection through the re-registration of successful Dagestani businesses in the republic.

The call of Dagestan's head Fyodor Shchukin for businessmen to re-register their businesses in the republic to bring large taxes into the regional treasury was commented on October 17 by the editor-in-chief of the "Dagestan.net" website Milrad Fatullaev, a Dagestani activist who spoke on condition of anonymity, and economist and political scientist Sergey Zhavoronkov.

The addressees of the appeal are large businessmen, but not oligarchs.

The head of the republic's appeal was unlikely directed only at oligarchs of Dagestani origin, believes Milrad Fatullaev. "We have quite a few businessmen - natives of Dagestan, who could exchange their tax registration. In the case of oligarch businessmen, such registration is a difficult undertaking for the authorities of the republic. One can recall Suleiman Kerimov, who would register in Dagestan and then leave. These comings and goings were the result of political and economic bargaining. His last return was related to an agreement that almost all the money that would remain in the republic would go towards the development of Derbent. Therefore, I believe that the addressees of the appeal are large businessmen, but not oligarchs," he noted.

Dagestani activist, who spoke on condition of anonymity, also noted that Shchukin's call "applies generally to all those who consider themselves Dagestanis and associate their fate with their homeland." There is already quite a large layer of Dagestanis who have managed to earn serious fortunes outside Dagestan, and their investments in the republic through re-registering their businesses would simply provide more opportunities.

As for the founder of the oil service company Eurasia Drilling Company Alexander Djaparidze, the chairman of the board of PAO "Novatek" and the petrochemical holding "Sibur" Leonid Mikhelson, and investor Gavriil Yushvaev, who are also natives of Dagestan and mentioned among potential "sponsors" of the republic alongside Suleiman Kerimov, according to the activist, this has been happening since the times of Mukhu Aliyev and Magomed Salam Magomedov.

"Mikhelson, as a native of Kaspiysk, several years ago gave a clear and straightforward answer that he is pleased to be considered a Dagestani, but he himself was only in Dagestan as a child, does not consider himself a Dagestani, and does not currently view investments in the republic as possible. And it's not even about any risks; he simply finds it uninteresting. As for Gavriil Yushvaev, he, using his certain well-known authority, could certainly invest in Dagestan. And I am sure he would find support among a fairly large circle of Dagestani athletes and businessmen, especially of the old formation. But again, the republic is unlikely to offer him an interesting project for which it would be worth changing his tax registration. As for Djaparidze, as we understand, he is a man of the world and large projects. He is unlikely to wish to get involved in the economy of Dagestan; it would be boring. From this, one can conclude that the territory of Dagestan is more interesting to (philanthropist) Omar Murtazaliev, as a business partner of God Nisanov and Zarakh Iliyev, than to other mountain or European Jews born in Dagestan. Dagestani society will calmly accept Jewish businessmen who do not support the genocide being committed in the Gaza Strip," he stated.

Fatullaev also spoke about the relationship between Kerimov and the current authorities of Dagestan. "Kerimov has normal relations with the current leadership. He initially had good relations with all the leaders of Dagestan (except Ramazan Abdulatipov), but then disagreements began for various reasons. Agreements with Melikov continue to operate regarding the direction of funds to Derbent. Plus, Kerimov is investing in the reconstruction of the port and airport of Makhachkala, in the tourist cluster. Perhaps now there will be discussions about reviving the 'German Village' project," he said.

The Dagestani activist also confirmed that the relationship between the new authorities of Dagestan and Kerimov is still following the course and inertia that were laid down during Melikov's time.

Fatullaev assessed the likelihood that business would go to Dagestan quite skeptically. "We are currently seeing a mass reduction in small and medium-sized businesses - a year ago there were over 70,000 entrepreneurs, now there are about 60,000. The conditions are also not very good for large businesses. When Mukhu Aliyev became president of Dagestan, he came to Moscow, gathered businessmen who were originally from Dagestan, and made a similar call. At that time, one of the businessmen stood up and said: 'You are inviting us now. But when we come to Dagestan, we encounter resistance from officials who say: 'You feed in Moscow, let us feed here, do not bring your money into Dagestan.' That is, officials preferred to maintain control over relatively small amounts of money and not let large businesses in, which would push them aside. Resistance will be serious now, and a businessman will only be allowed into the region if he agrees to work by its rules - both official and unofficial. It is unlikely that Moscow businesses will agree to do this," he stated.

Dagestan is a subsidized republic; it cannot provide special benefits.

Speaking about possible benefits for businessmen coming to Dagestan, Fatullaev noted that the republic cannot provide special benefits. "Dagestan is a subsidized republic; it cannot provide special benefits. There may be benefits for providing land plots, connecting utilities, and administrative support. They also return up to a third of investments," he noted.

The Dagestani activist, on the contrary, noted that any investor, depending on the size of their contribution to Dagestan's economy, will receive preferences. "In the case of Suleiman Kerimov, it is evident that the republic can be infinitely flexible and negotiable in this regard, even to its own detriment. Preferences are a subject of dialogue," he noted.

Sergey Zhavoronkov noted that when discussing the taxes that will go to the republican budget after the re-registration of businesses, Shchukin meant two taxes. "These are the profit tax (17% goes to the budget of the subject of the federation) and personal income tax (85% goes to the budget of the subject of the federation, 15% to the budget of the municipality, the increased part above 13% goes to the federal budget)," he noted.

Speaking about the scale of possible payments, Zhavoronkov called it "a subject of long analysis." "There is also the problem that, according to Russian legislation, individuals included in sanctions lists since 2017 can effectively be legally exempt from taxes - living in the Russian Federation, they can be considered non-residents. In addition, the authorities announced that certain individuals from 2023 are 'voluntarily' transferring large sums to the budget, measured in hundreds of billions of rubles. Who these individuals are is not exactly known, but Kerimov's name has been mentioned by journalists in this context," he emphasized.

Benefits in Dagestan are available to residents of industrial parks.

Zhavoronkov noted that he does not know who among the mentioned individuals or other wealthy representatives of Dagestan is registered specifically in the republic. He also confirmed Fatullaev's words that currently there are no significant benefits for businesses in Dagestan. "Benefits in Dagestan are available to residents of industrial parks (13.5% instead of 17% profit tax for the first five years). But this is unlikely to be interesting for large businesses, as there are many additional conditions. Currently, the main taxpayers in Dagestan are subsidiaries of federal state companies ('Gazprom', 'Rosseti')," he concluded.