Page 25 - Russia OUTLOOK 2022

• FDI
An important target for policymakers is attracting more investment but foreign direct investment (FDI) in Russia last year was the lowest since 2003.
Of the FDI which was recorded in 2020, much is assumed actually to be domestic investment which was sent through offshore centres for reasons of tax and bureaucratic planning, according to information cited in a recent report by the Bank of Finland Institute for Emerging Economies (BOFIT).
Ever since sanctions were implemented in 2013, Russia’s net inflow of FDI has nearly halved, as investors grapple with the blow dealt to Russia’s international reputation and complications associated with owning Russian assets abroad due to the legal implications of sanctions.
Having said that, the FDI picture is confusing as the official statistics only identify the origin of FDI by the last country the money moved through before arriving in Russia. By that score the most investment comes from Cyprus. An investigation by bne found that if you trace the money back to its beneficial origin then the picture changes dramatically and the most FDI into Russia is actually from the USA.
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