Certain aspects of attracting foreign investment into the region’s economy

Svetlana N. Rukina, Irina P. Denisova and Nazira A. Gumar
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Svetlana N. Rukina: Rostov State University of Economics
Irina P. Denisova: Rostov State University of Economics
Nazira A. Gumar: Caspian University

Economic Consultant, 2023, vol. 4, issue 4, 4-15

Abstract: Introduction. Attracting foreign investment is an essential factor in economic growth and regional development. Foreign investments can help create new jobs, increase tax revenues, and develop infrastructure, improving the population’s quality of life. For regions that depend on specific industries, attracting foreign investment can diversify the economy, reducing the risks associated with fluctuations in commodity prices or economic crises. The study aims to substantiate proposals for improving tax legislation, such as expanding the tax powers of state authorities of the Russian Federation’s constituent entities and improving the taxation of organizations’ profits and property, to improve the investment climate. Materials and methods. General scientific methods of cognition were used as the methodological basis of the study: systematic, logical, and semantic analysis, synthesis of theoretical and practical materials, and comparison. The materials for the study were publications in peer-reviewed journals on economics, finance, and international relations that consider the theoretical and empirical aspects of foreign investment. Results. The article considers the features of preferential taxation of profits and property established by regional legislation for business entities engaged in investment activities. The powers granted by the Tax Code of the Russian Federation to the sub-federal government allow it to manage individual elements of taxes on property and corporate profits. Based on the analysis of the legal framework, scientific publications, and open data, the Government of Rostov Oblast is proposed to expand the tax independence of the authorities of the constituent entities of the Russian Federation and to continue improving the mechanisms of investment tax deduction and taxation of commercial and office property to accelerate investment processes in the regions and ensure sustainable spatial development. Conclusion. Legislative and executive authorities can use the obtained results to develop proposals for improving tax legislation. Intensified investment activities at the expense of internal sources will contribute to ensuring the stability of tax conditions for investors, risk sharing, and encouraging investments in technological and infrastructure projects.

Keywords: attracting foreign investment; regional economy; tax benefits; regional legislation; stable tax cond (search for similar items in EconPapers)
JEL-codes: F21 R11 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ris:statec:0139

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