BOFIT Viikkokatsaus / BOFIT Weekly 2017/22

Net direct investment inflows to Russia (investment of foreign firms in Russia minus funds repatriated by foreign firms) amounted to USD 33 billion last year, a nearly five-fold increase from the 2015 nadir and roughly the same level as in 2009. The single most important event last year affecting investment flows was the December sale of a 19.5 % stake in oil giant Rosneft to the Qatar Investment Authority and the Swiss mining giant Glencore. The deal was valued at about USD 11 billion. Because of the financing arrangement under the deal, most of the FDI appeared to come from Singapore.

Without the Rosneft deal, positive net FDI inflow was mainly thanks to reinvestment of profits as in earlier years. This largely reflects the weakened interest of foreign firms in making new investments in Russia. Geographically speaking, the largest sources of positive FDI inflows to Russia came last year from the Bahamas and Bermuda. At least some of that investment is likely of Russian origin as a considerable amount of Russian outward FDI flows is also directed to these and other countries that provide friendly tax treatment.

Net FDI outflows from Russia (investments of Russian firms abroad minus repatriated investments) last year amounted to nearly USD 23 billion or almost as much as a year ago.