Political risk in investing in russia

Decoupling Decoupling is the occurrence of returns on asset classes diverging from their expected or normal pattern of correlation. Your Money. Real productivity growth slipped to 0.

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Political and economic context

In recent years, with the dramatic increase in Chinese Outward Foreign Direct Investment OFDI , the topic on how political risk in host countries influences the locational choices of Chinese multinational enterprises MNEs has drawn the attention of many scholars. I first analyse the general trend and then present the distribution of Chinese OFDI in low-, moderate- and high-risk countries. This finding reflects that Chinese OFDI is mainly concentrated in the field of natural resource development, energy, and infrastructure construction. Figure 2. Figure 3. The fact that the majority of Chinese OFDI is located in low- and moderate-risk countries proves that the level of political risk in host countries is not ignored by Chinese MNEs, thus verifying that traditional FDI theories can sufficiently explain the locational choices of Chinese MNEs.

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There are limitations on pursuing some activities in Russia but legitimate business can continue and UK exports remain robust in both goods and services. The economy has recovered from the recession and grew by 2. However, the outlook remains subdued due to sanctions and structural constraints. Macroeconomic policy continues to prioritise stability; government and corporate debt is low and inflation is low and stable.

The IMF predicts growth to be 1. Although Russia has the smallest population of the BRIC economies, it is the wealthiest in per capita terms by a considerable margin. This means that it has a relatively large middle class; though recent low growth has suppressed their real incomes. Consumers nonetheless seek quality and innovation within a growing retail sector.

Growth is currently sector-specific e. However, Russians understand that British exports provide some of the highest quality, most innovative goods and services available.

Significant opportunities remain in, for example, consumer goods, luxury, education and machine tools. However, there are concerns about the rule of law, transparency and access to credit.

These concerns pose challenges for domestic and international investment but major Western companies continue to have a large presence in Russia in a range of sectors including energy, finance, business services, consumer goods, automobile and engineering. Despite the sanctions and the economic downturn, a number of companies are continuing to invest. Armenia and Kyrgyzstan has since joined the Union. The organisation is still developing, but regulation of various different sectors and technical regulations are now being set centrally by the Eurasian Economic Commission.

We are working hard to secure full implementation of the Minsk Agreements and work with our international partners political risk in investing in russia ensure future stability and prosperity in the region. To achieve these objectives we will use the full range of our diplomatic channels and keep our overall engagement with Russia under constant review.

Information about the restrictive measures that have been implemented can be found on the GOV. UK site. If in doubt, businesses should consult the Business Support helplines.

UK businesses should be mindful of the potential risks and challenges of working in a sanctions environment. Companies may also need to be aware of sanctions regimes imposed by other countries, for example, the US. Companies should consult the information about sanctions on the GOV. UK site and if in doubt contact DIT Russia who can share contact details for Moscow based law firms familiar with the sanctions political risk in investing in russia. It is important that companies research sanctions thoroughly and take advantage of the advice offered by DIT.

We expect UK companies to stay strictly within the law. Russia is a country of concern for human rights issues. Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.

In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or.

Corruption is endemic in Russia and is a major concern for businesses operating. The Russian government continues to state its commitment to reducing corruption and other damaging informal practices but they remain a challenge in practice.

Visit the Business Anti-Corruption portal which provides advice and guidance about corruption in Russia. Read the information provided on our Bribery and corruption page.

There is a high threat from terrorism. Although there is no indication that British nationals or interests have been specific targets, attacks could be indiscriminate, including in places frequented by foreigners. You should remain vigilant in all public places, including tourist sites and crowded places, particularly where access is not controlled eg open-air events and markets and in major transport hubs.

Previous attacks have targeted transport infrastructure, including airports, buses, trains and metro systems. Further attacks are likely, and could take place anywhere in Russia. Read the information provided on our terrorism threat page. There are protective security issues attached to doing business in Russia; business people need to be conscious of the following activities of the local security service FSB :.

For specific advice email MoscowBusinessSecurity fco. Read the information provided on our protective security advice page. IP rights are territorial, that is they only give protection in the countries where they are granted or registered. If you are thinking about trading internationally, then you should consider registering your IP rights in your export markets.

Read the information provided on our Intellectual Property page. Read the information provided on our organised crime page. Contact us on tradeinvestmentmoscow fco. To help us improve GOV. It will take only 2 minutes to fill in. Skip to main content. Tell us whether you accept cookies We use cookies to collect information about how you use GOV.

Accept all cookies. Set cookie preferences. Home Overseas Business Risk — Russia. Protective security advice Intellectual property Organised crime Department for International Trade contact. Human rights Russia is a country of concern for human rights issues. Bribery and corruption Bribery is illegal. Terrorism threat There is a high threat from terrorism. See the FCO travel advice.

Protective security advice There are protective security issues attached to doing business in Russia; business people need to be conscious of the following activities of the local security service FSB : IT attack against office computers, laptops, PDAs and other electronic devices physical, audio and video surveillance approaches to staff interception of telephone calls landline and mobiletexts, emails, fax and post searches of offices, homes, vehicles and especially hotel rooms including safes For specific advice email MoscowBusinessSecurity fco.

Intellectual property IP rights are territorial, that is they only give protection in the countries where they are granted or registered. Organised crime Read the information provided on our organised crime page. Department for International Trade contact Contact us on tradeinvestmentmoscow fco. Is this page useful? Maybe Yes this page is useful No this page is not useful Is there anything wrong with this page? Thank you for your feedback.

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Russia — How important is political risk

Political and economic context

It is a very resource rich country, not only in hydrocarbons and minerals, but also in terms of human capital, talent political risk in investing in russia education, Russia’s Soviet tradition of education — superb in math and the hard sciences, excellent in languages — still produces plenty of brainy workers. There is a high threat from terrorism. This adds costs to doing business and weighs on productivity. Yukos shareholders lost their shirts in the affair. Although there is no indication that British nationals or interests have been specific targets, attacks could be indiscriminate, including in places frequented by foreigners. There are limitations on pursuing some activities in Russia but legitimate business can continue and UK exports remain robust in both goods and services. You should remain vigilant in all public places, including tourist sites and crowded places, particularly where access is not controlled eg open-air events and markets and in major transport hubs. There are protective security issues attached to doing business in Russia; business people need to be conscious of the following activities of the local security service FSB :. Popular Courses. Email address. We use cookies to collect information about how you use GOV. Russia has one of the largest populations in the world — around million people — many of whom have been getting slowly wealthier for the past decade and are spending an increasing amount of their income on luxury goods, services and holidays.