Opportunities

Investment climate

Russia is increasingly becoming considered a country with a stable investment climate. Russia has witnessed a large increase in foreign direct investment inflows over the last few years, thanks to a growing domestic market, rich human capital, natural resources and political stability (though this has slowed with the financial crisis).

Russia strongly recognizes the importance of attracting foreign investment. It is increasingly improving its’ invest regime. Constraints on foreign business are being abolished and the regulatory environment has improved. Foreign firms have access to various fields of the economy. However, several sectors remain closed to foreign investment. The government has restricted foreign access to 39 strategic sectors of the Russian economy, including nuclear energy, natural monopolies, military and special machinery, the space industry, and subsoil development.

Despite protectionist legislation such as the Law “On Strategic Industries”, the oil, gas and mining sectors represent high value investment targets for foreign investors. However, the presence of foreign investors in, for example, oil and gas service industries (drilling, operating, etc.) has increased only in recent years. Foreign technologies and machinery outstrip their Russian equivalents in many ways and therefore are in high demand on the Russian market.

As part of the government’s plans to simplify the process by which investors can access strategic sectors, a draft law to moderate foreign investment restrictions in Russia's strategic sectors and mineral resources was introduced in the lower house of parliament in March 2010. Russian investment policy includes tax reliefs, reduced administrative barriers, and developing private-public partnerships. The government is planning to invest in infrastructure projects to promote investment.

Among improvements for investors, Russia now has:

  • the lowest corporate tax rate of any G8 or BRIC country;
  • amended laws to allow BOT (build-operate-transfer) projects;
  • a framework allowing foreign investment in strategic areas.

“Doing business and investing in the Russian Federation 2010” report (PricewaterhouseCoopers)

UNCTAD WID Country Profile; Russian Federation

Statistics

The Russian Federation is ranked sixth in the global ranking of top locations for foreign direct investment (FDI) in 2009. Russia is a bright spot for FDI. Flows to the economy of the country will not only be directed at the most labour-intensive parts of the value chain, but increasingly at more technology-intensive activities.

UNCTAD World Investment Report 2010

 

INFLOWS OF FOREIGN INVESTMENTS BY TYPES

 
2003
2005
2008
2009
Mln. USD

Per-cent
of total

Mln. USD

Per-cent
of total

Mln. USD

Per-cent
of total

Mln. USD

Per-cent
of total

Total investments
10958
100
53651
100
103769
100
81927
100

         of which:

 
 
 
 
 
 
 
 
direct investments
4429
40.4
13072
24.4
27027
26.0
15906
19.4
      of which:
 
 
 
 
 
 
 
 
   contribution in capital
1060
9.7
10360
19.3
15883
15.3
7997
9.8

   credits from foreign owners of
   organisations

2738
25.0
2165
4.0
9781
9.4
6440
7.8
   other, direct
631
5.7
547
1.1
1363
1.3
1469
1.8
portfolio investments
145
1.3
453
0.8
1415
1.4
882
1.1
      of which:
 
 
 
 
 
 
 
 
   shares and stakes
72
0.7
328
0.6
1126
1.1
378
0.5

   debt securities of
   organisations

72
0.6
125
0.2
286
0.3
496
0.6

      of which promissory notes

1
0.0
121
0.2
285
0.3
396
0.5
other investments
6384
58.3
40126
74.8
75327
72.6
65139
79.5
      of which:
 
 
 
 
 
 
 
 
   trade credits
1544
14.1
6025
11.2
16168
15.6
13941
17.0
   other credits
4735
43.2
33745
62.9
57895
55.8
50830
62.0

      of which for
      the period of:

 
 
 
 
 
 
 
 

         up to180 days

2042
18.6
2656
4.9
6617
6.4
6604
8.1

         over 180 days

2693
24.6
31089
58.0
51278
49.4
44226
53.9
   other
105
1.0
356
0.7
1264
1.2
368
0.5

Russia in figures - 2010
Copyright © Federal State Statistics Service

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