Russia - Foreign investment



In September 1991, a foreign investment law promoting the transfer of capital, technology, and know-how went into effect. Nonresidents may acquire partial shareholdings or form wholly owned subsidiaries in Russia. Foreign firms may obtain licenses to exploit natural resources. Foreign investors can be exempted from import duties and export taxes, and there is limited relief from profits tax, varying by sector and region. However, foreign investors remain concerned with the overall business climate in Russia. Vague business laws, an incoherent tax system, crime and corruption in commercial transactions, and a weak commitment to reform continue to erode investor confidence.

In 1997, the annual inflow of foreign direct investment (FDI) to Russia peaked at $4.87 billion, but then fell to $2.76 billion in 1998 in the context of the Russian financial crisis. FDI recovered to $3.3 billion in 1999, and for the three years 2000, 2001, and 2002 averaged about $2.6 billion a year. Cumulative FDI in Russia from 1991 to April 2003 was $19.6 billion, up from a cumulative $17.2 billion of FDI as of April 2002. Russia's share of world FDI flows has persistently been only about 30% of its share of world GDP, an indication of its lack of success in attracting foreign investment.

User Contributions:

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farzad rashidi
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Dec 30, 2012 @ 6:06 am
WOULD LET ME KNOW PLEASE WHAT % IS THE TAX RELIEF FOR EXPORT IN RUSSIA?

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