Foreign investments are of considerable importance in the economy of any country. Russia is no exception in this. So, let's consider what is the national legal regulation of foreign investment in the Russian Federation, as well as what features this concept has in the country.
What is investment
Studying the elements of national and legislative regulation of this concept, you should first understand what is called investment.
In simple terms, foreign investments are all investments of a property nature that are made by investors from abroad in enterprises located on the territory of Russia, that is, in a certain object of business. The legislator also notes that this object can refer to any form of ownership.
As for the form of investments made, they can be presented not only in the form of real material values. Imi alsosecurities, property rights, services, as well as other intangible benefits are recognized. Some lawyers also categorize investments as information necessary for the maintenance and development of an object located in Russia. The main feature of all these benefits is that in the course of their operation they remain the property of the investor and cannot be withdrawn from civil circulation, actually being on the territory of the Russian Federation.
Practice shows that both the political situation in the state and its economic situation significantly affect investment activity.
Investor
Legal regulation of foreign investment in the Russian Federation is inextricably linked with the concept of an investor. Who is recognized as such, and what kind of person can be one?
The concept of an investor brings to attention the content of the Law "On Foreign Investments", which states that a person conducting investment activities in Russia is recognized as such. Moreover, the legislator also notes that this person can act both on behalf of the organization and as a private citizen. What are the requirements of the Russian legislation for investors? The legal regulation of foreign investment provides for certain requirements for both individuals and legal entities-investors.
So, if a legal entity wishes to make a contribution to the development of a certain object located on the territory of Russia, then it must be recognized as a legally capable organization. It could be likean institution or enterprise legally operating in the territory of another country, and an international organization. In addition, the whole state can act as an investor.
If we are talking about private investors, then in this case the main requirements of the law are put forward in relation to its legal capacity and capacity. The system of legal regulation of foreign investment also provides for the fact that an investor can also be a stateless person - a person who does not have citizenship of any state.
As for the legal framework for investment activities in Russia, they provide for a number of benefits for foreigners who wish to make a valuable contribution to the development of the Russian economy.
Legal regulation
The main regulatory document that establishes the concept, types and legal regulation of foreign investment in Russia is the law "On Foreign Investment in the Russian Federation", which was adopted in 1997 and is still in force with a number of amendments. Experts in the field of jurisprudence note that this normative act assigns to all investments that are available on the territory of Russia and are recognized as foreign, a special national legal regime. According to the majority, this regime provides for some conditions that in practice turn out to be not as favorable as those that Russian citizens can enjoy. However, in return for this, from this rule, as well asfrom many others, certain exceptions follow, both restrictive and stimulating.
Legislative Framework
In the legislative base of the Russian Federation there is a whole list of regulations, the content of which regulates the activities of investors. In addition to the aforementioned law "On Investments", the activities of investors are directly regulated by the provisions presented in the Tax Code of the state. It clearly spells out all issues related to the imposition of taxes and duties on all invested investments, as well as the activities carried out by investors.
The Law "On State Regulation of Foreign Trade" also considers some provisions regarding the conduct of investment activities. In particular, its provisions directly relate to the correctness of carrying out actions related to the import and export of goods into the territory of Russia, as well as outside it, the use of services, the results of labor, as well as the fruits of intellectual activity. This law was adopted in 2003, and its provisions are actively used in many economic areas of the country, including the legal regulation of foreign investment in the Russian Federation.
As for the activities of investors from abroad who make their investments in the form of capital, this concept is regulated by a separate law that was adopted in 1999. Its name fully corresponds to what the content of the normative act prescribes - this is the law "On investment activity carried out in the form of capitalattachments".
Special attention lawyers who specialize in international legal regulation of foreign investment, pay such a law as "On the procedure for making investments in business companies of strategic importance." This normative act deals exclusively with investments made for the development of special facilities, which include military bases, as well as other legal entities and entities whose main goal is to promote work in improving the defense capability of the entire state. This act provides for a wide range of restrictions on investments, which is due to the goal of ensuring the safety of state secrets.
Special attention should also be paid to what kind of national legal regulation of foreign investment in the Russian Federation provides the law "On Joint Stock Companies". This normative act provides universal legal support for this activity carried out on the territory of Russia.
Along with all the above laws and regulations, lawyers do not recommend losing sight of such sources of law as international treaties, one of the parties to which is the Russian Federation, as well as various codes (especially civil).
Forms of activity
In addition to the concept, the legal regulation of foreign investment in Russia also provides a list of certain forms in which this activity can be carried out on the territory of the state.
In the Basic Law"On foreign investment" states that it can be carried out in any way, but only if it is not prohibited by the current legislation of the country. However, practice shows that among the options for making investments, the most effective and common are such forms as contracts, the creation of companies, as well as branches. Let's consider each of them in more detail.
If he talks about companies that are created by foreign investors, then they, being on the territory of Russia, are traditional economic companies and partnerships for this country. Despite the fact that these persons are based on foreign capital, they still register in a manner that is common to all, in accordance with the provisions of current legislation. However, despite this, from the moment a legal entity is established, its legal status begins to be determined on the basis of the Law "On Foreign Investments" with all the ensuing circumstances. The legal regulation of foreign investment also provides for the possibility not only to invest in new legal entities, but also to buy out parts of previously established enterprises or organizations. Based on the law, such legal entities will be called organizations with foreign contributions.
Lawyers-practitioners, who are constantly faced with issues related to the legal regulation of foreign investment, note that such activities of companies should be clearly distinguished from ordinary business. The difference between them is that in the second case, foreign companies carry out their activities not by making valuable investments, but by creating branches of their companies in the territory of the Russian Federation.
When it comes to representative offices and branches, it should be understood that they are separate structural units that have the right to act on their own behalf and conduct activities within Russia - this is exactly what the content of the Civil Code says. As for the peculiarities of the legal regulation of foreign investments, presented in the form of organizing branches of companies, they consist in carrying out state accreditation of such enterprises, according to the positive results of which such legal entities acquire the right to conduct the activities for which the branch was organized.
Another common form of investment in Russia is contracts. This phenomenon is very often present in private international law (PIL). However, according to legal practitioners, not all agreements can be in the nature of cooperation on the basis of investments. According to experts, such contracts must strictly comply with clear criteria. One of them is longevity. All investments made by investors must be of a commercial nature, that is, in other words, the contribution of tangible and intangible assets should be carried out solely for the purpose of making a profit in the future. All investments made must have a targeted use.
If we talk about the disadvantages of this form of investment, it has a high risk of non-return on investment. This factor should also be provided for in the content of the investment agreement.
If we compare all the above features of the legal regulation of foreign investment, we can conclude that a very large list of contracts can fall under a number of such features. In particular, lawyers note that financial lease agreements, simple partnership agreements, investment attraction agreements, commercial concessions, a loan for investing in fixed assets of an enterprise, as well as a production sharing agreement are ideal for the described requirements.
Principles
There are a number of principles for the legal regulation of foreign investment in PPP. In the NLA (regulatory legal acts) in force on the territory of Russia, regulating the provisions related to the contribution of capital for the development of the economy, all of them are indicated. But, unfortunately, this is done in an abbreviated form. So, let's consider in more detail what each of the presented principles of the national legal regulation of foreign investment means.
Basic for all actions related to the investment of foreign capital in the development of the country's economy, is the principle of local legislation. It means that all relations regarding investments made in Russian enterprises and organizations of various forms of ownership should be regulatedsolely on the basis of the legislation in force in the Russian Federation for the current period. As for the regulation of invested funds, it is carried out only at the federal level.
As for the concept of an investment law in force within the Russian state, it is a whole set of a number of regulations, the content of which regulates issues related to the conduct of this type of action. As a rule, such sources regulate not only this type of activity, but also currency, labor and other aspects.
Another important principle is the equality of Russian investors. It provides for equal protection of all subjects of investment activity, as well as control over the observance of their rights and legitimate interests. The law calls for the interests of each investor to be adequately ensured, regardless of the size of his contribution, the form of his contribution, and also regardless of the nationality of the investor himself. It also does not matter at all how much benefit a person receives from the investment made. In case of violation of the legitimate rights and interests of the investor, the state is obliged to provide their protection in the proper form and manner.
And, finally, the third principle on which the legal regulation of foreign investment in the Russian Federation is built is the need to comply with all provisions of Russian legislation with the provisions presented in the international regulatory framework on investments. In fact, this only means that this activity on the territory of Russia should be carried out in such a manner thatcorresponds to what is prescribed in local legislation and does not contradict the international one, which includes agreements concluded between different countries. Such a system of legal regulation of foreign investment in PPP is called multilateral by legal practitioners. According to most experts, it is this system that ensures the safety of invested capital at the international level.
Which agreements are considered the main ones in determining the procedure for investment activities in Russia? Consider them further.
Main investor guarantees
If we talk briefly about the legal regulation of foreign investment, it is necessary to highlight such basic provisions as the concept, legislative regulation, as well as guarantees for investors. What special guarantees does Russian legislation provide for persons who make a material contribution to the development of the country's economy?
It should be noted that many of the guarantees presented in the articles of the main regulations are provided for in the content of documents providing legal regulation of foreign investment in PPP.
First of all, Russian legislation guarantees that in the event of requisition or nationalization of the investor's property, payment of commensurate compensation to him. Of course, these actions can be carried out in exceptional cases, for example, when the object of investment is of strategic importance for the activities of the state.
It is importantand guaranteeing the transfer of obligations and legal rights from one investor to another. It implies that, if desired and there are sufficient grounds, one investor has the right to transfer the property invested by him to another. To implement such a guarantee, the parties are required to conclude an agreement on the transfer of such.
Foreign investors, making a material contribution to the development of the Russian economy, have the right to participate in the privatization of property, as well as to purchase securities of a certain value. They can do this on the same grounds as ordinary Russian citizens. The same applies to the acquisition by such persons of real estate in Russia, natural resources, land plots, etc.
All income that an investor receives as a result of his activities in Russia, he has the right to use at his discretion, but without violating the laws of the country.
Information, as well as values that were previously imported into the Russian Federation as investment values, a person who contributes to the development of the economy and a particular area, has the right to export outside the country in an unhindered manner. This concept implies that there is no need for licensing or quoting of such an object.
In the event that an investor finds himself in a disputable situation arising from his specific activities, he has the right to seek protection from government agencies.
International Treaties
The Washington Convention, signed in 1965, has a huge impact on the conduct of investment activities among international actors. This document provides a clear procedure for resolving disputes that arise on the subject of invested funds, as well as the procedure for their use and payback. The document is recognized as a universal source of law, it was ratified by the Russian Federation.
Another important document is the Seoul Convention, adopted in 1985. This document provides for insurance of deposits made by investors. The essence of this convention lies in the fact that its content provides a wide range of reliable guarantees that allow countries to protect themselves from the risks associated with investment activities at the international level, as well as violations of the rights of persons who carry out it. Experts in the field of jurisprudence and international law point out the only, but very big minus of this document - it does not provide insurance against economic risks, as well as against possible bankruptcy. The Russian Federation ratified such an agreement in 1992.
Within the CIS, some conventions and international treaties have also been adopted, the content of which is aimed at the legal regulation of foreign investment between states and international partners. These include the Agreement on Cooperation in the Field of Investment Activities, as well as the Convention on the Protection of the Rights of Investors. Of the documents adopted not so long ago, one can single out the 2014 agreement on the Eurasian Economic Union. In these three normativeThe acts provide for certain rights and privileges for foreign investors, but it should be understood that they only apply to persons from the CIS countries.
State regulation of investments
The concept of legal regulation of foreign investment and investment activity also provides for certain measures that contribute to the stimulation of this process on the territory of the Russian Federation. Legal practice shows that the legislative framework provides for a wide range of benefits for foreign investors, as well as certain kinds of guarantees. What are they expressed in? Consider this further.
Speaking of state guarantees, it should be mentioned that any legislative act in force on the territory of the Russian Federation in the field of legal regulation of foreign investment provides for the full protection of the legitimate interests and rights of those persons who make their material contribution to economic development countries. In addition, at the legislative level, this category of persons is guaranteed the possibility of exporting property and valuable documents that were delivered to Russia as investment valuables outside of its borders. With regard to income received as a result of their activities, such persons have the right to use it in a reasonable amount at their discretion, including for the purchase of securities of other companies. Investors can take part in the privatization of property.
Specialists in the field of jurisprudence argue that the legal regulation of foreign investment in the Russian Federationalso provides for a certain protection of investors from the negative consequences that may entail a change in state legislation. This feature is also guaranteed internationally.
Bodies that control investments
The international legal regulation of foreign investment in PIL provides for the creation in each state of a special body that will conduct control activities in this area. He, in accordance with the provisions of the treaties, is responsible for the proper protection of the legitimate interests and rights of those persons who make a material contribution to the economy of other states.
To solve the problems of legal regulation of foreign investment in Russia, there is a special Commission, which is created under the Government of the country. The composition of this body must be determined by the Government, and the Prime Minister of Russia is automatically recognized as the head. As for the legislative regulation of the activities of this body, it is carried out on the basis of the law "On the procedure for making investments."
What are the main tasks of this body? One of the main activities of the Commission is to ensure proper legal regulation of foreign investment in Russia. This activity consists in monitoring the correct application of international legislation in this area, as well as monitoring the provision of legalguarantees to persons contributing to the development of the state economy.
As part of its activities, this body can establish control of foreign investors over economic-type companies that are of particular, strategic importance for the country. The Commission may also issue a refusal to establish such control.
Investment problems
Modern legal practice shows that the legal regulation of foreign investment in the Russian Federation (PFI) has certain problems and imperfections. And this is all, despite the fact that the legal framework governing these issues at the state level is incredibly voluminous. So, what do experts say are the main problems?
Many practicing lawyers, as well as theorists, pay attention to the fact that the legislation provides a certain list of guarantees and benefits for foreign investors, but at the same time, for the most part, does not specify them at all. Or, as some people point out, there are serious contradictions right in the articles of laws. For example, the law "On Foreign Investments" provides for the stability of legislation for entities conducting investment activities, but it immediately states that such a guarantee is provided for a period of no more than 7 years.
A huge number of legal practitioners in the field of interstate relations and those who study the issues of international legal regulation of foreign investment notice that the Government of the country needs to developnormative regulation of capital investments from abroad at the regional level, and not just at the national level. This is due to the economic and social characteristics of different regions of the state.
Among other things, among other problems, modern lawyers highlight the fact that in the legislation in force within the Russian Federation regarding the legal regulation of foreign investments in PPP, the legislative framework of Russia does not provide for such a regulatory legal act that would regulate certain law enforcement aspects regarding ways to resolve disputes that have arisen at the interstate level. Also, according to the observations of practitioners, the modern system completely lacks clear ways to enter investment arbitration, created at the international level.
And, finally, there is one more important problem, which significantly hinders the investment activity of foreign entities in Russia. It lies in the fact that, in addition to the above-mentioned Government Commission, there are no bodies in the country that would directly deal with issues related to the protection of legitimate interests and rights guaranteed to investors. In addition, there is an acute issue of the need to create specialized regional bodies, the main task of which is to conduct complaints handling activities in this area.
