The terms for entrepreneurial activities of foreign investors in the Russian Federation are set forth by the federal law “On Foreign Investments in the Russian Federation” No. 160-FZ dated 9 July 1999.

The federal law stipulates, among others, granting customs tariff privileges on imported goods used as a foreign investor's contribution to the authorised capital of enterprises with foreign investments.

The procedures for granting privileges are regulated by the aforementioned federal law “On Foreign Investments in the Russian Federation”, by the Russian Federation law “On Customs Tariff” No. 5003-1 dated 21 May 1993, the Decree of the Russian Federation Government “On Privileges for the Payment of the Import Custom Duty and Value-added Tax for the Goods Imported by Foreign Investors as their Contribution to the Authorised (Reserve) Capital of Enterprises with Foreign Investments” No. 883 dated 23 July 1996 and by the guidelines for the application of tariff privileges for the goods imported as the contribution of foreign investors to the authorised (reserve) capital of enterprises with foreign investments (the letters of the Russian Federation State Customs Committee No. 01-06/26232 dated 3 July 2002).

Also, the Russian Federation's Tax Code stipulates that the investments received from foreign investors for financing capital investments to production facilities are not included in the taxable base for calculating the income tax value provided they were used during one calendar year from the date they were received (article 251).

The law “On Foreign Investments” also stipulates that the Russian Federation's subjects and local self-government bodies may grant additional privileges to foreign investors with their authority established by law. The decisions related to granting aforementioned privileges are made by the corresponding bodies of the executive power in the Russian Federation's regions.