Despite the negative impact of the sanctions imposed by the US, Canada, Australia and EU countries, foreign investors' interest in Russia does not diminish. Instead, the geographical coordinates have shifted — Europe is losing its position, while Asia (primarily China) is gaining strength.
Of the capital investments, direct investments in mining and manufacturing, agriculture, knowledge-intensive technologies, etc. prevail. The Russian government is interested in inflow of funds and new technologies from abroad, job creation, therefore, it provides legal protection of foreign investors' rights. FOEs have gained the greatest popularity.
For-profit legal entities with foreign participation are subjects of international law. Such companies arise owing to:
- direct — when buying 10 or more percent of the shares of a certain enterprise with the investor’s active involvement in its business;
- portfolio — when holding less than 10% of shares without active involvement;
- real — investing in active projects;
- credit, non-material (acquiring trademarks, patents), etc.
- a foreign organization — a legal or unincorporated entity, formally established and legally operating in its country, authorized to make investments abroad. With the exception of foreign companies managed by a Russian citizen or a legal entity from Russia;
- a foreigner, competent and legally capable to act, who is entitled to invest abroad in accordance with the legislation of the country of residence, except for individuals having a second Russian citizenship;
- a stateless person who, in accordance with the laws of the country of residence, can invest abroad;
- an international organization;
- a foreign country.
- religious organizations (communities, missions, monasteries, etc.);
- public organizations (communities, associations, etc.);
- political parties;
- charitable foundations;
- associations, unions;
- educational, cultural and other organizations.
- controlling (if there is a controlling interest);
- FOEs with an equal share of control — when the partners have equal rights, the founders are not actively involved in management, delegating these functions to professional managers. The managing director is appointed at the constituent assembly of the shareholders. Their rights and duties (representing the interests of the company, entering into contracts, executive powers, etc.) are determined in the constituent documents (Article 274 of the Labor Code of the Russian Federation).
- FOEs where one of the founders has the dominant control. The owner of the company may independently manage and lead the company or appoint a manager.
- shareholders' meeting as the supreme body;
- the board of directors (3, 5 or more, but necessarily an odd number) — to run the business between meetings;
- management — appoints the board of directors;
- CEO with prime authority to sign;
- audit team.
- stream of new high-quality products/ services and therefore import phaseout;
- foreign exchange earnings;
- innovation and acceleration of modernization processes in the economy;
- new job opportunities for the regions, and others.
- to expand the market for their products and find new partners;
- to establish themselves in the area hoping for a more favorable situation in the future;
- to take advantage of highly qualified and cheap local labor;
- to access cheap energy and other raw material resources.
- total income tax rate — 20% (Article 284 of the Tax Code of the Russian Federation);
- tax holidays for two years;
- the possibility to get an investment tax credit at a reduced rate, when the entity pays the budget as it settles the accrued interest, principle of the loan and the amount of income tax within 1−5 years.
- the creation of a new company or the purchase of an existing one;
- the purchase of stocks or shares of the enterprise (equity participation);
- the opening of branches and representative offices under the current legislation of the Russian Federation.