Russia is among top 10 most attractive for foreign investors in Europe, the study’s European Investment Monitor (EIM), an international consulting firm EY.
Russia is at the end of 2019 ninth place, but could rise even higher in the rankings by the end of 2020. Investors continue to work in Russia.
Russia looks more preferable for investors in comparison with European countries. Foreign companies and financiers saw that Russia’s economy has adapted to the sanctions, successfully developing the industry in spite of the pandemic and crisis. Therefore investors are hesitant to legally overcome the legal barriers of sanctions.
In 2019, the foreigners have increased direct investments into Russian non-financial sector 4.6% to more than 26.9 billion dollars, according to Bank of Russia.
“Despite the fact that Russia felt the impact of the economic crisis associated with the pandemic and the fall in oil prices, the earlier projects are still being implemented, is generating new business, — said Alexander Ivlev, country managing partner, EY CIS. — In may 2020, we analyzed all the transactions that took place in 2019. 34% of FDI projects are already nearing completion, 65% have a confirmation to continue the implementation this year, and only 1% is yet to be confirmed. These figures are a better than average estimate for Europe, which suggests that FDI projects in Russia are verified and long term”.
“In Europe, the pandemic is COVID-19 about 10% of FDI projects in Europe are cancelled, 25% frozen. 51% of investors is going to cut a few planned volumes of FDI in 2020, 15% expect significant reductions” — estimated by economists, EY.
Russia for the last 10 years has dramatically risen in the world ranking of the business climate — 28th place in the rating of the world Bank group’s Doing Business. In 2012 Russia was on the 120th place. Investors see those inilately that were laid down by the government in recent years.
In 2019 in Russia, foreign investors have invested in 191 project. First place in the number of projects of foreign direct investment (FDI) in Russia is Germany, the largest EU country. In 2019, Germany has increased the number of projects in Russia in 1.5 times to 36. This is one of the highest results for the duration of the study. Germany since the Soviet Union actively cooperated with Russia in the period of the modern history of the country has remained the most active and reliable investor in the Russian economy.
the Second place in investment projects in Russia took China, and France – 22 project. At the same time China for the year increased number of projects in Russia on 16%, and France 1.7%. France regains its position as one of the main investors in the Russian economy.
the United States ranked fourth in the number of projects in Russia. But because of the sanctions projects have been reduced over the year by 61% — up to 20 projects with 33 in 2018.
Foreign investors often prefer to invest in the agro-food sector: the number of FDI projects for the year grew 28% to 41. The main success factor of this sector is import substitution, state support. In the agricultural industry most invests Germany (8 projects), USA (7 projects) and the Netherlands (4 projects).Second place in popularity among investors is the production of machinery and equipment — 23 project. There is also leader of Germany (7 projects), USA (4 projects) and Finland (3 projects). Popular with investors and pharmaceuticals, and logistics: a number of projects for the year grew 1.6% to 13 projects. Leads the pack, Germany (5 projects) and France (3 projects).