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
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 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
From 1.1.2006 R&D costs can be fully depreciated within 2 years from the completion of the R&D.
