President Medvedev Makes Play for American Investment

President Medvedev has gone on a tour of technology companies in California, coinciding with a recent announcement that Russia is lowering the long term capital gains tax rate to 0%.

Apparently, Russian politicians are looking to attract high-tech companies and foreign investment.

This comes at a time during which many heavily indebted countries like the US and the United Kingdom are threatening to raise capital gains tax rates to extreme levels.

I know a great deal more about Russia and its recent history than I do most other countries.

Medvedev made a point of stating

Russia will continue to do its best to remain a predictable business partner for everyone – the Russian people and our foreign partners.

It seems that was a pointed barb to US policymakers and the Federal Reserve, which has become increasingly unpredictable in recent years.

The existence and level of political risk and taxation aren’t as important as the predictability of political risk and taxation.

If you know that taxes are coming, you can at least plan around them. If you know that the laws are going to change, you can plan around the event.

When politicians begin acting capriciously, it introduces risk to your investments that you can’t plan for. That risk extends to small and medium business  owners.

I’m curious to explore how exactly foreign entrepreneurs could start businesses and raise money in Russia. The capital gains advantage alone might be enough to attract venture capitalists. Seeing as the regulations in the US make it onerously difficult to make initial public offerings, Russia may provide a better alternative to the current American clusterfuck.