Alabuga Special Economic Zone
Alabuga is a special economic zone of an industrial and production type located in a 20 km2 area in the Yelabuzhsky District of the Republic of Tatarstan in the Kama Innovative Territorial Production Cluster 10 km from Yelabuga, 25 km from Naberezhnye Chelny, 40 km from Nizhnekamsk and 210 km from the regional center — Kazan. The shareholders of the management company of the SEZ "Alabuga" are the Russian Federation through the JSC "Special Economic Zones" with 100% state participation.
As of 2016–2017, "Alabuga" is the largest and most successful special economic zone of industrial and production type in Russia, accounting for 68% of total revenue and 42% of tax collections from all SEZs of the country, providing 54% of private investment in Russian SEZ.
Controversy has emerged around claims of deceitful labor practices in Alabuga's factories where Shahed 136 drones are produced for Russia's military. In May 2025, the Global Initiative Against Transnational Organized Crimes released a report with evidence that over 300 women aged 18–22 have been recruited from around the world, mostly Africa and Latin America, under allegedly false pretenses of a "work-study program," to be sent to these drone factories in Alabuga. The deceptive and manipulative "Alabuga Start" program has recruited low-skilled workers from 27 countries with promises of a high salary, work training, accommodations, and integration into Russian society.
History
Yelabuga Automobile Plant
In the 1980s, the right bank of the Kama river was a promising industrial centre. In the vicinity of Naberezhnye Chelny, the auto road and railways communications were established; KamAZ was showing new industrial capacities; the Plant of Transport Electrical Equipment and the Cardboard and Paper combine enterprise and the Nizhnekamsk hydroelectric station were launched. In 1984, the Council of Ministers of the USSR decided to build a in the Yelabuga area, including a universal tractors plant, along with an engine plant, a fueling equipment, a turbocharger, a foundry and forging and a machine tool producing plants.Nikolay Bekh, the director of the "KamAZ" foundry plant, headed the Directorate of the future plant. The general plan of "KamTZ" was prepared under his supervision. The project, commissioned by the Ministry of Tractor and Agricultural Machinery of the USSR, was designed by "Giprotractorselkhozmash" from Kharkiv; its main contractor was the production association "Kamgesenergostroy". The first cubic meter of concrete was laid in the foundation of the future plant on 12 October 1984, and the next year the construction of apartment houses, factory buildings, boiler station, treatment facilities and the road from the highway Kazan - Naberezhnye Chelny highway to the plant site were launched. By 1988, six buildings of the plant were installed, a combined heat power plant was built, 90 kilometres of high-pressure gas pipeline from Udmurtia were laid, and four samples of an experimental tractor were put up, but Mikhail Gorbachev doubted the expediency of a huge tractor production. In July 1988, the Council of Ministers decided to reorganize KamTZ into the Yelabuga Automobile Plant, which was subordinated to the Ministry of the Automobile Industry by order of 9 August 1988.
It was planned to launch a mass production of city cars, "Oka" in particular, on the YelAZ site in 1989–1995. The plant also negotiated the creation of a joint venture with Fiat for the production of Fiat Panda and the jointly developed "A93" model, but the Italian company delayed the signing of the contract, waiting for the political crisis resolution on which the project financing depended. Because of a lack of funds, the launch of YelAZ was postponed from 1991 to 1992. In November 1991, Gorbachev put the plant to the jurisdiction of the Republic of Tatarstan and, thanks to the support of the President of Tatarstan, Mintimer Shaimiev, the enterprise managed to avoid closure after the collapse of the Soviet Union. The main subdivision of YelAZ in the 1990s was the machine tool producing factory, which was launched in 1992 and supplied large car manufacturing factories and oil refineries. When in 1997 it reached the breakeven point, about one thousand people worked on a territory of 100 thousand sq meters. The republican authorities also revived the idea of car production and in late 1995 reached crucial agreements with the concern of General Motors. In early 1996, a joint venture "YelAZ-General Motors" was established with $250 million of authorised capital, 25% of which belonged to US investors, the rest — in equal shares to Tatarstan and Russia. The Chevrolet Blazer SUVs, produced in Brazil, were assembled at the YelAZ-General Motors sites, and ElAZ directly dealt with third-party orders for tools, machine tools and spare parts, and together with the French company produced beet harvesters.
The first 120 Chevrolets left the assembly line in March 1997, and by the end of 1998, it was planned to open a production complex of a joint venture in the 601st building of the industrial site and to increase car production to 50 thousand per year. The Yelabuga — Kazan — Moscow — St. Petersburg dealer network began to work, and to reduce the car selling price, the government of the Republic of Tatarstan reduced the property tax rate for "YelAZ-General Motors". However, the financing of the tripartite project was slipping: for example, in mid-1997, journalists pointed out that only 20 million roubles instead of 120 were delivered from the Republican budget, while the Russian Federation provided only 1.7 million. After that, the existing mechanism of the project funding was abolished by order of the Russian president on 8 July 1997.
Free economic zone
In order to attract funding and to overcome unemployment in Yelabuga, the republican government turned to the widespread practice in Russia of the 1990s of creating free economic zones designed to stimulate the regional economy through tax breaks and the attraction of foreign capital. The Law of the Republic of Tatarstan "On Free Economic Zone «Alabuga»" was adopted on 22 April 1998, by 33 votes of deputies of the State Council of the Republic of Tatarstan; one deputy voted against it. The FEZ regulations were developed together with the Customs Committee of the Russian Federation, the Ministry of Finance of the Russian Federation, and the State Committee for Property Management of the Republic of Tatarstan. The FEZ residents were exempt from all tax payments, except for and personal income tax. Despite the fact that in 2001 the American company left the joint venture "ElAZ — General Motors", the FEZ continued its work. By 2003, 13 companies were located in the FEZ, including the "Skantat" joint venture with Volvo, which produces buses on the KamAZ chassis; the Minski Traktarny Zavod tractor production; the meat-processing plant "Modul", the car chemicals production "D Plast-Eftek; the manufacturer of special machinery on the cargo chassis "AutoMaster"; a factory of office furniture and trade equipment "ElTons"; the manufacturer of building components "DSK KMK" and the joint venture for the heaters production "Delonghi — ZASS «Alabuga»".The law "On Free Economic Zone «Alabuga»" contained some fundamental differences from federal legislation related to the industrial and production specificity of the site and the desire of the Tatarstan authorities to avoid the use of FEZ for tax evasion. The republican prosecutor's office considered that these differences contained violations of the Civil Code that restrict citizens' rights to engage in entrepreneurial activities, and protested the law during the discussion of the amendments in September 2001. Deputies of the State Council of Tatarstan appealed to the economic expediency of "Alabuga", but the prosecutor's office was not satisfied with these arguments and demanded that Supreme Court of Tatarstan regards the law as contradicting the federal legislation. The Supreme Court of Tatarstan refused to do it, and the Tatarstan prosecutor's office appealed against the decision in the Supreme Court of the Russian Federation. Despite the absence of a direct ban on the creation of free economic zones with special economic regimes in the federal legislation, the Supreme Court of Russia took the side of the prosecutor's office, and qualified the creation of FEZ to be beyond the powers of the Tatarstan State Council and on 21 March 2003, abolished the law "On free economic zone «Alabuga»". On 23 April 2003, the State Council officially terminated the law on the territory of the republic.