Sustained macroeconomic stability and growth:
— Russia has the 4th largest foreign currency reserves (USD 527 bln, March 2013), compared to a small foreign debt (10.5% of GDP) in contrast to countries such as Germany — 65% of GDP, China – 22% of GDP, France – 100% of GDP.
— The country has strong political stability and economic development (5.3% of GDP on average growth from 2000 – 2011).
— Currently Russia produces 10.48 million barrels of crude oil a day, which helps to fund the government budget and various economic policies, providing an added layer of stability.
— A single digit inflation rate, which in the current economic downturn has a positive effect on the economy.
— Highest GDP per capita among the BRIC countries
— Increasing consumer consumption, backed by a growing middle class
— Russia is the largest retail market in Europe, with a growing population of 142 million; offering an additional security of potential domestic demand to offset any international macroeconomic shocks.
— The high level of nationwide savings of 31% of GDP and a constant growth in demand of 3%, lends further prospects for future growth in consumption.
— Apart from the traditional markets of oil and gas (70% of total exports) and metals (11% of total exports), there are a number of fast growing sectors of the Russian economy, including: banking, retail, communications, infrastructure amongst others.
Russian government is committed to implementing a number of policies and projects to further attract foreign investment and stimulate the economy:
— The Skolkovo Innovation Center a high technology business area built next to Moscow.
“The Skolkovo Innovation Center is tasked with concentrating intellectual capital and encouraging the development of various technologies. As corporations and individuals become «residents» of the city, proposed projects and ideas receive financial assistance.”
— Tax exemptions are being currently discussed in parliament not only for oil and mineral producers but other government sectors, to help boost infrastructure investment into the country.
— The Transport Strategy of “Russia 2030” implies the construction of almost 21,000 km of railroads (a 24% increase from current capacity), and 500,000 km of roads (a 50% increase)
And of course Russia remains one of the world top countries for natural resource development:
32% of explored world reserves of natural gas (1st place)
35% world gas production and exports (1st place)
1st place in oil production and 2nd place in oil exports
18% of world reserves of oil (7th place)
23% of explored world reserves of coal (1st place)
47% of world reserves of peat (1st place)
23% of world forest resources (1st place)
1st place in sodium salt reserves and 2nd place in potassium salt reserves
1st place in drinking water reserves and 2nd place in fresh water reserves
1st place in the stocks of pollacks, crabs and sturgeons in the 200 mile economic zone and 2nd – 3rd place in the stocks of codfish, herring, capelin, polar cod, salmon, etc.
1st place in world explored reserves of tin, zinc, titanium and niobium
1st place in world reserves and production of nickel ore and refined nickel
About 28% of explored world iron ore reserves (1st place)
1st place in steel exports and 3rd place in exporting rolled metal products
1st place in primary aluminum production and exports
1st place in nitrogen fertilizer exports, 2nd and 3rd place in the exports of phosphate and potash fertilizers, respectively
1st place in world diamond reserves and 2nd place in world diamond production
1st place in actual volume of diamond exports
1st place in explored world silver ore reserves
2nd place in explored world gold ore reserves
2nd place in explored platinum ore reserves and 1st place in exports of platinum ore
3rd place in explored world copper and lead reserves
3rd place in explored world wolframium and molybdenum reserves
10% of world reserves of uranium (9th place)
40% of world reserves of nickel
1st place in the world in per capita natural resources
Attractive taxation regime
With a personal income tax rate of 13% for residents, profit tax rate of 20%, and VAT rate of 18%, Russia has one of the most generous non-offshore tax regimes in the world, aimed at promoting investment and further developing the economy. Russia has recently introduced a European-style participation exemption regime that exempts dividends received from qualifying participations. In addition, the capital gains tax is 20%, and reorganization for companies is tax-neutral according to the Russian Tax Code.