While Chuvashia is considered one of the less developed regions of Russia, the region has a positive investment climate. The liberally minded government is working to encourage business development and attract foreign investment. Legislation The State Council of the republic has passed a number of laws aimed at encouraging business activity in Chuvashia. The income tax rate is 35%. One-third of this sum is transferred to the Russian Federation and two-thirds are contributed to the Chuvash budget (this is called the Republican portion). Notable tax privileges include: The profit tax rate (Republican portion) for foreign enterprises, joint ventures, and filial branches of foreign enterprises is five percent during the first three years of operation in Chuvashia. To qualify for this benefit, foreign enterprises must contribute at least $100,000 and 70% of the venture's initial capital. Enterprises and organizations producing consumer goods, producing industrial-technical products, and processing agricultural products are exempt from profit tax (Republican portion) for a period of three years. While not particularly relevant to foreign investors, the government's commitment to economic growth can be evidenced by its efforts to encourage small business growth through the simplification of tax and business registration processes for entrepreneurs. Economic performance In 2000, Chuvashia's economy continued its rebound from the 1998 Russian financial crisis, with industrial output growing by 10.6%, compared to the Russian Federation's overall rate of 9.3%. In the year 2000, the average official per-capita income was 1,200 rubles ($45) per month. Actual income, especially in urban areas like Cheboksary, is significantly higher because many people under-report their true earnings. While the financial crisis of 1998 significantly affected Chuvashia and the rest of Russia, it is important to note that the region was less affected by the crisis than were Moscow and Saint Petersburg. Nonetheless, economic output in dollar terms is still far behind from the levels achieved in 1997. The most significant industrial sectors in Chuvashia include electronics and machine building, electrical energy, chemical manufacturing, and food processing. Electrical engineering Chuvashia is one of Russia's centers for electrical engineering research and manufacturing. Much of the republic's engineering talent is here because of the existence of the Russian Scientific Research Institute for Electrical Relay Production, an institute in Cheboksary that develops new and innovative technologies for electrical power transmission and power system control. There are many well-qualified engineers in the region, and firms in the republic produce a wide variety of