Supreme Soviet Acts to Attract Foreign Capital
The nation’s legislature, the Supreme Soviet, enacted a long-awaited law on foreign investment Friday, strengthening legal guarantees and offering concessions to attract capital from abroad.
The measure, approved by a vote of 340 to 11 with 11 abstentions, provides an important legal foundation for President Mikhail S. Gorbachev’s plans to revamp the economy with Western aid, investment and management know-how.
The law gives foreign investors equal legal rights with Soviet citizens and allows new businesses to be created with 100% foreign ownership, the official Tass news agency reported.
To attract investors, businesses with substantial foreign investments will be exempt from import duties and export taxes.
Soviet businesses with a minimum of 15% foreign ownership will have the right to engage in import-export operations without licenses, the law says. The need to obtain such licenses from the sluggish bureaucracy has been a major impediment to foreign trade.
The law also protects foreign investments from confiscation.
The law could make it possible for foreigners to buy shares in state industries that undergo privatization, under narrow conditions.
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