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) has remained lower than that recorded by comparable countries and quite small in terms of growth and of the Russian economy's potential.
This is especially due to the investment climate, which is still widely perceived as unfavorable abroad. If, 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.

Russia's main strength is its easy access to raw materials. The weaknesses are the bureaucracy, its inadequate infrastructures and the high degree of corruption.

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.

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.

Finding assistance for further information

Investment aid agency

National agency for direct investment
European Bank for Reconstruction and Development
Federal agency for the Management of Special Economic Areas

Other useful resources

Ministry of Economic Development and Trade