Foreign Direct Investment in Russia

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FDI in Figures

Even though FDI flow increased considerably at the beginning of the millennium years (tripled between 2002 and 2007), its level (1.5% of the GDP) remains relatively low in terms of growth of the country and of the Russian economy's potential. They dried up due to the global crisis and have been recovering slowly since 2010. This trend should continue.
The low FDI performance reflects an investment climate which is still widely perceived as unfavorable abroad. Although, over the last few years, Russia has implemented positive economic reforms, the state's administrative problems and the uncertainties of the rule of law remain significant.


Country Comparison For the Protection of Investors

  Russia Eastern Europe & Central Asia United States Germany
Index of Transaction Transparency* 6.0 6.3 7.0 5.0
Index of Manager’s Responsibility** 2.0 4.0 9.0 5.0
Index of Shareholders’ Power*** 7.0 6.2 9.0 5.0
Index of Investor Protection**** 5.0 5.5 8.3 5.0

Source: Doing Business

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

Foreign Direct Investment 2007 2008 2009
FDI Inward Flow (million USD) 55,073 75,461 38,722
FDI Stock (million USD) 491,232 213,734 252,456
Performance Index*, Ranking on 141 Economies 79 62 57
Potential Index**, Ranking on 141 Economies 7 9 -
Number of Greenfield Investments*** 381 574 399
FDI Inwards (in % of GFCF****) 20.2 20.4 2.4
FDI Stock (in % of GDP) 38.2 12.7 20.3

Source: UNCTAD

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

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Why You Should Choose to Invest in Russia

Strong Points
Significant natural resources, investment potential largely under-utilized and a qualified workforce.
Weak Points
Unstable investment climate, complicated and sometimes contradictory accounting regulations and legislations, infringement of intellectual property, many sectors closed to foreign investment as considered strategic.
Government Measures to Motivate or Restrict FDI
The establishment of investment assistance in Russia is still in its infancy, despite many declarations of intent. The government prefers to improve the general investment climate by tax reductions and economic reforms.
Since May 2008, majority foreign ownership is subject to authorization in many sectors, particularly those linked to raw materials, heavy industry and aerospace.
Bilateral Investment Conventions Signed By Russia
Russia inherited 14 bilateral treaties with most of the European countries, China and Canada.
Since then, Russia has signed 34 treaties of which 20 have been ratified (especially with Central European countries, Japan, India, Egypt and South Africa). On the other hand, it has not yet ratified the bilateral investment treaty signed with the United States in 1992.
It has recently asked to renegotiate these contracts, fearing that they may not be compatible with its joining the WTO.
To see the complete list of the countries, click here.
To see the treaties, click here.

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Procedures Relative to Foreign Investment

Freedom of Establishment
Usually guaranteed.
Investment in certain domains which might affect national security may be limited.
Acquisition of Holdings
The majority acquisition of holdings in the capital of a local company is authorized in Russia.
Obligation to Declare
No obligatory declaration, except for banks.
Competent Organization For the Declaration
Bank of Russia
Requests For Specific Authorizations
Natural resources, energy, transport, communications, defense industry.
Find Investment Service Providers in Russia on

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Investment Opportunities

Investment Aid Agency
National agency for direct investment
European Bank for Reconstruction and Development
Federal agency for the Management of Special Economic Areas
Tenders, Projects and Public Procurement
Globaltenders, Tenders & Projects from Russia
Tenders Info, Tenders in Russian Federation
DgMarket, Tenders Worldwide
Other Useful Resources
Ministry of Economic Development and Trade

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