Russia is the biggest country in the world and it benefits from large amounts of natural resources which, together with the advanced technologies, provide the perfect investment environment for many entrepreneurs.
Russia has enabled a law on foreign investment in 1999 that provides foreign companies the same benefits as Russian companies. The foreign investment climate improved over the last few years, especially since Russia is making big progress in its adherence to the World Trade Organization (WTO).
Russia is also trying to adhere to the Organization for Economic Cooperation and Development (OECD) in order to have more access to international markets and draw more foreign investors.
Foreign investments are encouraged in Russia through the diminishing of taxes and reforms of the economic sector. Russia also possesses a skilled and highly trained workforce which makes the country more appealing to foreign investors. The Russian government encourages foreign companies to invest in the oil and gas sectors, food and distribution segments and the energy area.
Russia has privileged domains in which foreign investors can put their money in. In 2005, a special economic area was created in the domains of innovation, industrial production, nuclear and information technologies, in the petroleum sector and the automobile industry.
Other investment incentives in Russia have the form of reduced tax rates, such as property tax exemptions, reduced rates of 14% for social security and 70% deduction in the innovation segment. Foreign investors can set up companies in privileged zones such as: Dubna, Zelenograd, Strelma, Tomsk, Lipetsk and Yelabuga. Russia has also free zones set up at: Kaliningrad, Nakhodka, Ingushetia and Magadan, where companies benefit from custom exemptions on imports.
In terms of protection of foreign investments, Russia has enforced over 30 bilateral investment treaties (BITs) with European countries, China, Canada, Japan, India, Egypt and South Africa. It is also a member state of the Multilateral Investment Guarantee Agency and, in case of dispute settlements, the rulings of the International Court of Arbitration, International Chamber of Commerce and of the Arbitration Institute of Stockholm Chamber of Commerce will be enforced by the Russian judicial system.
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