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- Russia tries to encourage overseas investors.
- Among other reasons for Russia's attraction for foreign investors, are:
- Speedy and effective access to the countries of the CIS.
- A skilled work force, with a command of technology.
- Tremendous natural resources that are insufficiently exploited.
- On the other hand, there are a number of factors that deter the foreign investor, such as:
- Weak buying power. This weakness is increasing as a result of the sharp decline in the population as well as a low birth rate.
- Problems of the conservatism of the banking and legal systems.
- Corruption and crime.
Limitations on Foreign Ownership in Russia
- As a general rule, there is no discrimination between foreign investors and local investors. Despite this, there is a limitation in certain sectors, concerning the ownership by foreign residents.
- Investments in the aeronautical / space industry - are limited to 25% of any project.
- Investments in the Russian oil monopoly are limited to 20%.
Central Bank Approval in Russia
In some cases, the prior consent of the Central Bank must be obtained. Among them:
- Any investment of over 50 million roubles.
- A foreign investment for the acquisition of in excess of 50% ownership.
- Investments in the defense industries (in certain instances, foreign ownership is prohibited).
- An investment in projects for the exploitation of Russian's natural resources.
Research and Development in Russia
- From 1.1.2006 R&D costs can be fully depreciated within 2 years from the completion of the R&D.
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