Foreign direct investment in the states of the former USSR by Keith Crane

By Keith Crane

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Since the demise of the Soviet Union, the emerging states have created a variety of vehicles for foreign investors. Foreign companies and nationals are now free to set up wholly-owned subsidiaries in many republics. Purchases of equity are also permissible in some cases. However, joint ventures continue to be the most popular form of investment. Figures on joint ventures still provide the most easily tracked indicator of foreign interest. Table 1 provides a time series of registrations and numbers of joint ventures actually operating since they became legal in January 1987.

6)Licenses (for foreigninvestments) are issued byMinistry for ForeignEconomic Relations on thebasis of(arts. 6 and 7)"application with requisitedocuments attached" (notspecified) (art. 7)Kyrgyzstanregistration of "foreign not specified in law 30 daysinvestors: with Ministry ofFinance (art. 13)licenses "for foreignapplication and documentsinvestments" issued by the(form of application and list ofCabinet of Ministers on thesubstantiating documents" tobasis of:be confirmed by Cabinet of(art. 13)Ministers(art.

Source: PlanEcon databank on Soviet joint ventures, USSR External Trade (Goskomstat) national statistics. Changes in the numbers of joint ventures reflect the very different speeds of transition to market economies among the various republics, differences in the size of the republic economies, and perceived differences in economic opportunities. Of a total of 1,604 operating joint ventures 2 just before the Soviet coup attempt in August 1991, more than half were in Russia, followed by Ukraine and the Baltic republics.

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