FEDERAL LAW OF THE RUSSIAN FEDERATION

of July 9, 1999 No. 160-FZ

About foreign investments in the Russian Federation

Accepted by the State Duma of the Russian Federation on June 25, 1999

Approved by Council of the Russian Federation on July 2, 1999

This Federal Law determines basic guarantees of the rights of foreign investors to investments and income gained from them and profit, conditions of business activity of foreign investors in the territory of the Russian Federation.

This Federal Law is directed to attraction and effective use in economy of the Russian Federation of foreign material and financial resources, the advanced equipment and technology, managerial experience, ensuring stability of conditions of activities of foreign investors and observance of compliance of legal regime of foreign investments to rules of international law and the international practice of investment cooperation.

Article 1. The relations regulated by this Federal Law and the sphere of its application

1. This Federal Law governs the relations connected with the state guarantees of the rights of foreign investors when implementing of investments by them in the territory of the Russian Federation.

2. This Federal Law does not extend to the relations connected with attachments of the foreign capital in banks and other credit institutions, and also in insurance companies and to the relations determining procedure for creation and termination of activities in the territory of the Russian Federation of branches and representative offices of foreign banks (except for the relations regulated by provisions of Items 8 and 9 of article 21 of this Federal Law), branches of foreign insurance companies (except for the relations regulated by provisions of Items 8 - the 10th article 21 of this Federal Law) which are regulated respectively by the legislation of the Russian Federation on banks and banking activity and the legislation of the Russian Federation on insurance.

This Federal Law also does not extend to the relations connected with attachment of the foreign capital in non-profit organizations for achievement of particular socially useful purpose, including educational, charitable, scientific or religious which are governed by the legislation of the Russian Federation on non-profit organizations.

Operation of articles 7 and 16 of this Federal Law does not extend to the relations connected with implementation of industrial and production, technology development or tourist and recreational activities by residents of the special economic zone.

Article 2. The basic concepts used in this Federal Law

For the purposes of this Federal Law the following basic concepts are used:

the foreign investor - the foreign legal entity whose civil legal capacity is determined according to the legislation of the state in which it is founded and which the specified state having the right according to the legislation to perform investments in the territory of the Russian Federation, except for the foreign legal entity who is under control of the citizen of the Russian Federation and (or) the Russian legal entity; the foreign organization, not being the legal entity which civil legal capacity is determined according to the legislation of the state in which she is founded and which the specified state having the right according to the legislation to perform investments in the territory of the Russian Federation, except for the foreign organization, not being the legal entity and being under control of the citizen of the Russian Federation and (or) the Russian legal entity; the foreign citizen whose civil legal capacity and capacity to act are determined according to the legislation of the state of his nationality and which the specified state having the right according to the legislation to perform investments in the territory of the Russian Federation, except for the foreign citizen having also citizenship of the Russian Federation; the stateless person which constantly lives outside the Russian Federation which civil legal capacity and capacity to act are determined according to the legislation of the state of its permanent residence and which the specified state having the right according to the legislation to perform investments in the territory of the Russian Federation; the international organization, which the Russian Federation having the right to perform according to the international treaty of investment in the territory of the Russian Federation; foreign states according to the procedure determined by the Federal Laws;

foreign investment - the attachment of the foreign capital performed by the foreign investor directly and independently in object of business activity in the territory of the Russian Federation in the form of objects of the civil laws belonging to the foreign investor if such objects of the civil laws are not withdrawn from circulation or are not limited in turnover in the Russian Federation according to the Federal Laws, including money, securities (in foreign currency and currency of the Russian Federation), other property, property rights having money value of exclusive rights on results of intellectual activities (intellectual property) and also services and information;

direct foreign investment - acquisition by the foreign investor at least 10 percent of share, shares (contribution) in the authorized (share) capital of the commercial organization created or newly created in the territory of the Russian Federation in the form of economic partnership or society according to the civil legislation of the Russian Federation; capital investments in fixed assets of branch of the foreign legal entity created in the territory of the Russian Federation; implementation in the territory of the Russian Federation the foreign investor as the lessor of finance lease (leasing) of the equipment specified in Sections XVI and XVII of the single   Commodity   nomenclature of foreign economic activity of the Customs union  within  EurAsEC (further - the Customs union), customs value at least 1 million rubles;

the investment project - the reasons for economic feasibility, amount and terms of implementation of direct foreign investment including the design estimates which is developed in accordance with the legislation of the Russian Federation;

the priority investment project - the investment project, the total amount of foreign investments in which makes at least 1 billion rubles (at least equivalent foreign currency amount at the rate of the Central bank of the Russian Federation on the date of entry into force of this Federal Law), or the investment project in which the minimum share (contribution) of foreign investors in the authorized (share) capital of the commercial organization with foreign investments constitutes at least 100 million rubles (at least equivalent foreign currency amount at the rate of the Central bank of the Russian Federation on the date of entry into force of this Federal Law) included in the list approved by the Government of the Russian Federation;

payback period of the investment project - term from the date of the beginning of financing of the investment project with use of direct foreign investment about one day when the difference between the cumulative amount of net profit with the depreciation charges and amount of investment costs of the commercial organization with foreign investments, either branch of the foreign legal entity, or the lessor under the agreement of finance lease (leasing) acquires positive value;

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