Standard problems the land users have to face in Russia

The investment process is usually accompanied by two factors: time and risk. You have to give away money today and in a certain amount, and the profit will come later, if ever, and its amount is not known well in advance. Investments in land plots and structures on such plots are more reliable, since they refer to the category of "real investments", unlike "financial investments" (shares, bonds, debt instruments, etc.)

Gaining of maximal profit is undoubtedly the main target of any investor. Having certain monetary funds a businessman chooses specific directions of their investment in order to exclude fully at least the loss of invested funds. Therefore the majority of investors prefer to have recourse to qualified specialists and companies capable to implement a full set of requited measures for legal backing of transactions. Absolutely the same refers to investment activities in the sphere of real estate and land plots.

In point of fact, the investment amounts and directions are different, but they all have one target: at least to protect the savings from inflation, and optimally - to create an independent source of income.

It can readily be understood that regarding the Russian land plots and real property as investment objects one should take into account all specificities of the Russian market in order to exclude the risk of invested fund loss and to minimize the risk of non-receipt of scheduled profit.

In practice, in the majority of cases the risks related to acquisition of real estate in Russia, are connected either with incomplete information received about the facility to be acquired, or with legal errors made in the course of transactions and upon registration of ownership right to the acquired facility.

When the foreigners all by themselves try to find a real property for buying and to make a purchase-sale transaction, rather often they have to face considerable difficulties or what is even worse, they make serious mistakes entailing direct material losses. Their reason is the specificities of the Russian market.  

Firstly, Russia lacks a universal algorithm of successive actions of the buyer in the course of realization of such a transaction. It is connected with the variety of types of land plot categories. One should take into account the fact that in many cities and regions local authorities have adopted additional statutory acts which should be taken into account. Therefore the legal support of transaction should be available starting from the selection of a facility for buying and until receipt of all title documents by the new owner and their registration by respective authorities.   

The prospective investor should get rid of the most widespread myths.

Myth  № 1: High rate of crime in the RF

In practice: punishment for criminals impeaching on foreigners is stricter, and the best police  forces are involved in investigation of crimes connected with foreigners. Therefore the probability of someone's deliberate impinging on real property owned by a foreign national or company is rather low.

Myth № 2: Frequent changes in the laws and RF laws incomprehensible for foreign nationals.

In practice: the laws are changing rather often, indeed, and there are numerous by-laws, without knowledge and understanding of which it is impossible to formalize the ownership right. One should not forget to insure the transaction. Therefore the legal backing of transaction on purchase of real estate and its further use should be carried out by a lawyer competent in the given branch of law.  

Myth № 3: Corruptness of RF civil servants

In practice: In point of fact, a certain level of corruption (in any country!) requires special attention when doing business. The main rule is as follows: do not try to solve problems by illegal means, all the more to invent such methods based on unreliable information. The safest way of avoiding the problems connected with possible corruption is to sign a contract on rendering a package of legal and consulting services on support of a transaction with a local specialist, who has been long and successfully working in this branch of law. It will enable you to avoid involvement in unlawful area, on the one part, and to solve your problems quickly and efficiently,  if it is permissible from the legal viewpoint, on the other part.  The same consultant will explain you what is legally possible and what is legally impossible.    

Myth № 4: Only a person with very much money may become an investor

In practice: even relatively small funds (starting from 50 000 Euro) may be successfully invested in a land plot, especially when there is an opportunity to use the first income for further expansion of business.

In general, the investment in development of land plots in Russia is a rather safe and profitable undertaking. The real property prices in Russia are increasing hastily. According to available data during 2007 the land prices in Russia have nearly doubled. Specifically, the increase of land plot prices in the passed third quarter of 2008 made over 6 %. It should be noted that the current financial crisis in many developed countries, which is first of all mortgage crisis practically has not touched upon Russia. So the current period is probably one of the most beneficial for investments in Russian real property, since Russia remains an island of economic stability in the rather stretching world's economic situation so far.

Upon risk levels comparable with European ones the investments in Russian real property may produce higher profit in case of shorter payback periods of the project. We can secure your operations with land plots with the risk level comparable with the risks of such operations in Europe.  

In order to simplify such work in the uniform European legal space I established companies in Finland and United Kingdom, and the establishment of such firms in other European countries, including Greece, is now under consideration.