Russia Proved its Attractiveness for Foreign Investors

The Ernst & Young (EY) international company investigated the investment attractiveness of Europe for foreign investors and Russia entered the top twenty most attractive countries, RIA Novosti reports. The first place is taken by France where foreigners have invested in 985 projects. This is followed by Great Britain (975) and Germany (930). The top ten also includes Spain, Belgium, Poland, Turkey, the Netherlands, Ireland, and Portugal. Russia is in the eleventh place (141 projects).  

“Any investor has a choice – direct investment or the stock market. Due to rising stock prices, investments in the real sector seem less profitable and riskier. Add to this the prospect of sanctions and a weakening of the ruble, as well as the fact that there is no access to cheap capital,” the Development Director at TradingView, Vasily Kirpichev, said.

Nevertheless, according to the Vice President of the Borsell Analytical Company, Olga Veretennikova, some industries traditionally do well. First of all, these are projects in the oil and gas sector where the domestic economy is the most competitive, namely, energy resources (oil, gas, coal) and metals (both industrial and precious). Here is an understandable mechanism of return, a conditional oil field in Yamal requires capital investments for development after which the oil flow turns into pure cash.

Experts clarify that Germany, China, and the United States are investing in Russian business. Last year, the Germans took part in 26 projects, mainly in the agro-industry. Another large segment where foreign money comes is business services. In 2020, 8 Russian projects related to foreign engineering and consulting companies attracted the interest of external players. In addition, the booming IT sector is quite attractive for investors. With highly qualified specialists, the cost of IT development in Russia is cheaper than in Europe and the United States.

Electronics, software and IT services are heavily financed by China. Thus, in 2020, 15 projects became objects of interest in the PRC and in 2019 there were 22 of them). In addition, there is a surge in interest in online education startups (EdTech). According to experts, one of the key reasons why Russia looks worthy in the investment rating is the immunity to crises developed over the years, so the country’s market is perceived as a completely stable place in times of global economic turmoil.

Ru-Main, 08.07.2021 

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