Factor of Investment Non-Attractiveness of Russia and Motives of Foreign Investors

Abstract

The article is devoted to analysis of problem of investment prospects of Russia. Russia is not the most profitable country to start business to manufacture products and to export it.

It is caused by the following factors of investment non-attractiveness of Russia:

1. despite relatively cheap labor, labor productivity is on low level;

2. it's hard to find a good manager;

3. it is quite expensive to start business in Russia;

4. imperfection of Russia's law system especially regarding regulation of business sphere;

5. political and economic instability and excessive regulation;

6. traditionally high volatility in the economic environment;

7. high in comparison with Arabic countries and Singapore tax burden;

8. problems in establishing clear property rights (in case large objects);

9. not-high level of citizens' income;

10. difficulties in communication with government and privatization organizations;

11. imperfection of material, especially transport and logistics, infrastructure.

For transnational companies, such factors as market capacity and growth rate are important. We made the conclusion that main motives of foreign investors in the Russian market are the following:

1. the search for new markets with a large growth potential;

2. the search for resources;

3. the efficiency of the existing business in the country.