What is investment activity: types, goals and objectives, stages of implementation

Hello, dear readers of my financial portal!

Some people hide their savings for a rainy day under their pillow, while others spend them on immediate purchases. The third thinks about the future and is actively looking for projects in which this money will bring profit after some time. Investment activity is what the last person in the example above does.

Where to invest money: put it in a bank, buy securities? Or maybe open a business? It is necessary to set goals, determine possible profits, weigh risks, and develop intermediate stages.

Essence and legal basis

In the Russian Federation, all legal relations related to financial investments are subject to regulation by Federal Law No. 39-FZ “On investment activities in the Russian Federation, carried out in the form of capital investments.”

This regulatory legal act considers as investments money, securities, property, property and non-property rights that have a monetary value, invested by an investor in assets in order to subsequently receive profit from them or achieve another desired result.

Thus, the federal law actually provides its own regulatory definition of investment activities that are carried out on the territory of our country.

Classification of an investment item according to its convertibility into money (liquidity)

In simple terms, liquidity is the property of a product being sold to be sold as quickly as possible at the established market value or close to it. Such products can also change their price quickly. As a result, objects of investment activity can be highly liquid or low liquid. In the first case, the product may quickly turn out to be more expensive or cheaper than the market value (stocks, currency), and in the second - on the contrary, slowly, almost imperceptibly (real estate).

Grouping assets by target area

With this type of classification, it is possible to distinguish between almost any product:

• in the social direction, investments originate in social projects or events. One such investment could be a holiday park with paid attractions for children;
• For science, investment is necessary for it to develop and constantly move forward. Innovation can bring greater financial benefits or help entities achieve their own goals;
• in the economic sphere, money is invested on currency or trade exchanges, as well as through the circulation of funds and the conversion of capital.

Thus, we can assume that investments have a place in any sphere of life, since sufficient financing is the key to development.

The type of classification depends on the investment cycle

With this grouping, everything will depend on what part of the business or asset the investor is willing to invest in. For clarity, we can schematically imagine production using the example of a gas station. In order to sell gasoline, it is necessary to extract oil, transport it, process it, and finally sell it.

To implement each stage, investments are required, which can be provided either by one investor or a group of them. The partiality of the investment cycle will depend on this. If one investor is ready to finance all stages at the same time, he carries out a full cycle of capital investments. When financing one or more stages, the investment is considered a partial cycle.

Grouping by type of activity

All items are divided into real, financial, and intellectual values. A material (real) object can be touched and seen: real estate, enterprise, material documents, antiques or jewelry. The financial type has a currency equivalent. This group also includes securities that can be confused with a real item. Intellectual activity as a subject of investment activity acts as plans, developments and ideas that are created by man.

John Austin's catchphrase “Economics is a way of spending money without getting any pleasure from it” has a great meaning and reveals the whole essence of investment activity. Any investment subject, when choosing an object, investing their money or selling it, is always aimed at results. Subjects and objects of investment are interdependent concepts, without which there would be no development of the scientific and technical base, creation of competition in the market, as well as promotion of the country at the global level in the economic and social sectors.

Existing principles

The investment activity of a country, an enterprise or a private investor has certain directions. The main one among them, undoubtedly, is the positive economic effect of the investments made. As a rule, it is expressed in income received or other material (intangible) benefits.

There are a number of fundamental investment principles that every investor should adhere to. These include:

• the principle of free will. Each investor has the right to independently make decisions on investment;
• security principle. The legal system of the state must protect the legal rights of investors;
• the principle of balance for each participant in investment activity, regardless of the form of ownership, or other related factors;
• the principle of non-interference from government authorities and other third parties.

Tasks and goals

In the course of implementing his own professional activities, an investor is constantly faced with the issue of correct goal setting. In other words, before investing money in a particular investment project, he must clearly understand why this is being done and what results should be achieved in the end.

In a situation in which the investor manages to very clearly define and formulate the final goals of the project, its implementation seems to be a much simpler and more understandable task. In addition, without competent goal setting, successful implementation of investment activities in the medium and long term is impossible.

It is quite natural that the main, but far from the only goal of an investor’s activity is to make a profit. In addition, he can solve the problem of maintaining savings, increasing the authorized capital of his own enterprise, increasing his personal professional level and many others.

What is investment activity

Considering the concept of investment activity in a broad sense, I will say that these are targeted steps that allow you to invest in projects. I want to immediately determine: you can invest not only money, but also other values. The main task is to ensure a return with a good plus, since in another case it can be called charity or patronage.

Considering the narrow significance of this financial activity, I note that this is one of the most important tools for the development of any economy, both the national economy and a small business selling hot dogs.

We often hear the phrase or read headlines in the press: “Our country has improved its investment climate indicators,” “We are succeeding in attracting foreign investment.” Such things indicate one thing - the main aspects of functioning are working and showing quite stable results.

Of course, such a targeted strategy is characteristic not only of individuals who want to receive additional passive income, but also of the state itself. Analytical studies indicate that investment risks have decreased for the first time in recent years in cooperation with foreign companies.

According to Ruslan Kokarev, executive director of the Association of European Businesses, “it is important to understand and clarify that partners should be as comfortable as possible when working with projects,” and in addition, the expert recommends: “When collaborating with an investor, you need to clearly understand what language he speaks, and specialists the regions understand this.” Among the most successful forms are tax benefits.

In the meantime, such preferential conditions are not provided for ordinary investors with small capital, it is worth studying what types of such activities there are.

Types and forms - main classification

We can classify investment activities in different ways. It all depends on the specific feature on which we will rely. Currently, the main classification of investment activities is considered depending on the object of investment. It is customary to distinguish the following types of investment:

• financial;
• speculative;
• real;
• innovative.

Let's look at each of the above concepts in more detail.

Financial investment

It is commonly understood as investments whose purpose is to generate income in the form of dividends or interest. In this case, various types of securities and bank deposits are considered as investment assets.

The features of such investor activity are closely related to his understanding of the main investment instruments. Despite all the apparent accessibility and simplicity of financial investment, it requires a clear and deep understanding of the issue.

Indeed, without understanding the development prospects of the world's largest companies, it is impossible to choose the right shares to buy. With bank deposits in the country, the situation is simpler. An investor can simply choose a deposit with the most favorable conditions. This rule works up to an amount of 1.4 million rubles, where all deposits are protected by a compulsory insurance system. With larger investments, the risks increase.

Speculative investing

It is understood as a short-term investment of money in various investment assets, with the goal of their rapid resale and making a profit on the difference in prices.

In this situation, we consider the investor’s activities on the currency, stock or commodity exchange. The objects of investment activity, accordingly, can be shares of companies, national currencies, precious metals, and so on.

This type of investment, on the one hand, promises the investor quick enrichment. On the other hand, the risks existing here are also extremely high. With the wrong approach and an unsuccessful transaction, there will always be a possibility of losing all your capital at once. In order to prevent such developments, the investor must remember to diversify risks.

Real investing

It is commonly understood as investments aimed at acquiring tangible material objects. These can be enterprises, real estate, land, masterpieces of art and other property.

Such activities have serious specifics and features. For example, in order to invest in art objects, you must have appropriate artistic education and considerable experience. Otherwise, the investor will never be able to predict which painting or sculpture will significantly increase in price in the future.

In addition, this type of investment is extremely long-term in nature. As a rule, it takes years, or even decades, for a work of art to significantly increase in value.

Innovative investing

Innovative investment activity is associated with investment in scientific developments. An investor can invest money in basic science or applied research. The latter option is more popular among individuals and companies. After all, the results of such research can most often be implemented into production and bring profit here and now.

Basic science is usually financed from the state budget. Actual returns from such discoveries sometimes have to wait for decades.

Carrying out investment activities

Here, of course, we can start with the fact that such a mechanism is extremely complex, requires preparation, rational calculation, and selection of a strategy, but today we will do without this. I would like to focus on the basic conditions for investors, without which this simply cannot be realized.

1. Individual choice of directions and volumes for investment. Freedom of speech and freedom of choice moves the world. In some cases (and you need to be prepared for this), tenders or open competitions are held among potential investors. This is especially related to cooperation with government agencies: which company won the tender to build a boiler room at a school or repair a toll section of the highway.
2. Develop personally or with the help of specialists (in my opinion, the second option is less risky) an investment plan. Sometimes corporations themselves have such a document and offer it to those who want to become part of the empire.
3. Formation of the object itself - which direction is the most priority for you.
4. Calculation of payback and risks. The size of the investment allows you to actually make portfolio investments, where you will passively own securities without actively participating in the management of the company.

Directing funds as investments

This is how you will allocate part of your capital to the project. Most often in the segment of internal projects they talk about corporatization, credit and project financing. If we consider cooperation with international companies, it is important to point out leasing. Well, if you imagine a really fantastic direction, then you can safely mention budget financing.

Self-financing is quite atypical - when a company invests its own profits in turnover. This is typical for newcomers to the economic market, especially in the field of trade. Here, too, I recommend that you not forget about expert assessments of market situations, and also remember that parallel investments in several projects reduce risks.

Development of an investment plan

A completely logical question is: who is responsible for drawing it up? The answer is simple: representatives of firms, corporations and other areas of investment. This document immediately shows the potential investor exactly where his investments will go, and also offers an approximate estimate of the percentage equivalent and payback period of the investment.

A similar practice is used by those who need real investments: the investor immediately sees the direction for investment and an approximate calculation of what specific purpose it is needed for. When evaluating documents, I would pay attention to the following points:

• Profitability;
• Payback period;
• Risks described;
• Ways to minimize them;
• Innovative directions in work.

All of them are directly important at the stage of object formation.

Creation of an investment activity object

In other words, this is what your money will be invested in. Over the past few years, various types have “leveled off” in quantitative terms: physical (equipment, real estate, land) and financial assets. But at the same time, most often they pay attention to securities - shares and intellectual property rights.

And when each of us is on the verge of making a choice or has already determined a specific direction for investment, it would be completely stupid not to conduct a comparative analysis. As a rule, it is performed by specialists or independently. At this stage, financial attractiveness and the level of profitability of cash income are predicted and calculated.

Payback and profit

These indicators depend on a number of factors, namely:

• Company position in the market, level of competition;
• Direction of activity - what exactly does this or that company do;
• Investment risks;
• Term of the work;
• Financial indicators.

Of course, you want everything at once, and at the same time you can get a nice bonus from your partners. But you need to understand that short-term projects are a little riskier, but at the same time they have a higher rate of profitability. Each investment is so individual, you can compare it with fingerprints - we all know that no two are alike. But a lot depends on how well the strategy is chosen and on your own financial intuition. At the same time, the economic rules of this industry are also triggered, and the direction itself is regulated by legislative acts.

Sources of financing

Sources of financing investment activities are own or borrowed funds. It would seem that an investor needs to rely only on his financial reserves. However, in real life they are most often lacking. This is especially true at the level of companies, municipalities and states.

For business development, the availability of external financial sources is of great importance. First of all, this relates to the possibility of obtaining long-term bank loans on special preferential terms.

Large companies also actively use the method of attracting investment resources by issuing shares. To implement this path, the enterprise must change its organizational and legal form and become a joint-stock company. Foreign investments are a special source of attracting funds. It is of great importance for the economy on a national scale. Such investments mean not only cash, but also technology, modern equipment, etc.

Main stages

Investment activity is always carried out within several stages. These include:

• investment decision;
• development of an investment project;
• creation or acquisition of an asset;
• operation of the investment object;
• reaching the breakeven point;
• Receiving a profit;
• analysis of the implemented project.

Only if all these stages have been completed can a specific project be considered successful. They all have equal importance. You can never say what plays a big role in successful investment planning, project management or analysis of its effectiveness.

Subjects and participants

The main subjects of investment activity are the investor, the customer, the contractor and users.

Investors are the participants in the investment process who directly invest their own or borrowed capital in a previously selected project. They can be private individuals, companies, municipalities, federal subjects, states.

Investors are indispensable participants in investment activities. Depending on the type of attachment, the list of subjects may be limited only to them. For more detailed information, read the publication “Participants in the investment process.”

Subjects of investment relations

Introduction

Investment activity is defined by law as making investments and carrying out practical actions in order to make a profit and (or) achieve another useful effect. From the legal definition of investment activity it follows that investment activity may be entrepreneurial (when it is carried out by entrepreneurs for the purpose of systematically making a profit), or may not be such (in the absence of signs of entrepreneurial activity - Article 2 of the Civil Code).

Investment law can be defined as a set of general and special rules of civil (commercial) law governing investment relations (i.e. relations for the implementation of investment activities). The public organization of investment activity is mediated by public branches of law, for example tax law.

The concept of investment legislation should be distinguished from the concept of investment law. Investment legislation is a set of complex regulations, i.e. regulations containing norms of various branches of law (private and public) regulating investment activities. Thus, the features of the legal regulation of investment activities are embodied not only in the norms of private law, but also in the norms of public law (for example, legislation on guarantees to foreign investors).

1. Investments and investment activities: concept and meaning

In modern Russia, the role of investments and the state in regulating investment relations is growing sharply, which is determined by a number of factors. First, our society is going through a period of transition from a centrally regulated to a market economy. Secondly, from year to year in all sectors of industry the degree of depreciation of fixed assets, which constitute the production base of the power of the state and the well-being of citizens, increases. Thirdly, the material stratification of the population is growing. Overcoming the current situation, which can cause a social explosion, is again only possible through increasing investment in the social sphere - in the construction and reconstruction of housing. In education and healthcare.

The term “investment” is complex and universal, used by many social sciences, primarily economic and legal, and used in many regulatory legal acts. Its relevance in science and practice is due to the fact that the processes occurring in society require constant material and financial support for their functioning and development. Various forms of manifestation of such support are covered by this term. However, despite the “eternity” of the term, the concept of investment is not interpreted in the same way by both domestic and foreign scientists.

The concept of investment consists of four components. The first shows what can act as an investment. The specific set offered in different acts is not the same. For example, cash, securities, other property, including property rights that have a monetary value (Article 1 of the 1999 Federal Law on Investment Activities); financial and material resources, as well as transferred rights to property and intellectual property (Article 9 of the 1997 Convention).

The second component of the concept of investment is its purpose, i.e. where investments are directed. Such addressees are called: Law of the RSFSR 1991. On investment activities and the Federal Law of 1999. On investment activities - objects of entrepreneurial activity; 1997 Convention — various objects of activity.

The norm of the Federal Law of 1999 seems unsuccessful. On foreign investments, limiting investments only to objects of entrepreneurial activity. After all, foreign organizations, foreign citizens, and international organizations make large investments not only in businesses, but also, for example, in institutions of science, education, culture, and healthcare.

The third component of the concept of investment is its purpose. In the analyzed regulatory acts, the formulations of the goal also do not completely coincide. The goal is most clearly shown in the 1999 Federal Law. About investment activities - making a profit and (or) achieving another useful effect. It should be noted that investments do not necessarily have to be aimed at making a profit. The goal may be to achieve another useful social effect.

The fourth component of the concept of investment is the moment when the quality of the investment acquires value. Objects of civil rights that can become investments are in different legal positions: they can be unencumbered and spent on any needs - personal consumption, etc., or they can be intended in advance for certain needs.

Generalizing the considered four components of the concept of investment, the latter can be defined as objects of civil rights having a monetary value, intended (allocated) for inclusion in any object of activity that is not illegal in nature in order to obtain a positive social effect.

1. Subjects of investment relations

The main subject of investment relations (Investment relations, being the subject of legal regulation of business law, are complex in nature, combining private and public law relations that are different in their legal nature.), regardless of the type of market in which investments are made, is the investor. The current legislation does not have a legal definition of an investor; this category is disclosed through the concept of investment activity.

Investors are participants in investment activities who invest certain values ​​in objects of business and (or) other activities in order to achieve economic or other benefits. An interesting question arises about the relationship between the categories “investor” and “entrepreneur”. It is clear that every entrepreneur developing a business invests his own, borrowed or attracted funds into the business and, accordingly, in certain legal relations acts as an investor. But not every investor must be an entrepreneur; otherwise, for example, the acquirer of a share or other security would have to register as an entrepreneur. Most experts are inclined to this point of view6.

It should be noted that the current legislation does not establish any restrictions on the circle of persons who can be investors. Thus, according to the Law on Investment Activities in the form of capital investments, subjects of investment activities can be individuals, legal entities, as well as associations of legal entities created on the basis of an agreement on joint activities and not having the status of a legal entity. Such associations include, for example, consortia specifically created to carry out large-scale construction. Legal entities include commercial and non-profit organizations, government agencies, and local governments. Having a number of features, all of these groups of investors, acting as subjects of investment legal relations, have a legal status that is largely determined by the type of investment and, accordingly, the market in which they make investments. Thus, the rights, obligations, guarantees and responsibilities of investors making direct investments in the form of capital investments are regulated by the Law on investment activities in the form of capital investments, and those making portfolio investments in securities are regulated by the Laws on the securities market, on joint stock companies, etc. Fundamental An approach to regulating the legal status of investors is to ensure equal rights and guarantees, imposing equal responsibilities on all investors, regardless of their legal form and form of ownership.

Investors making capital investments have, in particular, equal rights to independently determine the volumes and directions of capital investments; ownership, use and disposal of objects and results of capital investments; transfer under an agreement and (or) government contract of one’s rights to make capital investments and their results to other persons; exercising control over the targeted use of funds allocated for capital investments; pooling of own and borrowed funds with the funds of other investors for the purpose of joint capital investments.

The rights of an investor making portfolio investments are determined by the securities he owns. For example, an ordinary share certifies property rights (to receive income in the form of a dividend, to a liquidation quota) and non-property rights (to participate in management, to receive information about the activities of the company).

The responsibilities of investors making capital investments are also enshrined in law and consist, in particular, of compliance with standards (norms and regulations); fulfillment of legal requirements imposed by competent government bodies and their officials; in the use of funds for their intended purpose. The responsibilities of a portfolio investor depend on the category and number of securities owned by him and consist, for example, of the obligation to seek prior consent from the bodies of the Ministry of the Russian Federation for Antimonopoly Policy and Entrepreneurship Support for the acquisition of more than 20% of voting shares (Article 18 of the Law on Competition in the Commodity Market) or notify a joint stock company with the number of shareholders - owners of voting shares of more than 1000 of the intention to acquire independently or jointly with affiliates more than 30% of the outstanding ordinary shares of this company (clause 1 of Article 80 of the Law on JSC).

Investor guarantees are the most important component of their legal status. The stability of the investment climate is largely determined by the level of guarantees provided to investors. The main guarantees for all categories of investors are ensuring equal rights when carrying out investment activities, protecting investments, including from nationalization and requisition (except for cases provided for by law, and in case of requisition - in the presence of appropriate compensation), granting the right to appeal actions in court government bodies, organizations, officials infringing on the rights of investors.

The legislation regulating investment activities is characterized by the so-called stabilization (or “grandfather”) clause, which protects the investor from changes in legislation during the implementation of the investment project that limit his rights. Such reservations exist, for example, in the Laws on investment activities in the form of capital investments (clauses 2, 3 of Article 15), on foreign investments in the Russian Federation (Article 9), on production sharing agreements (Article 17). Thus, if, during the implementation of a priority investment project carried out in the form of capital investments, federal laws and other legal acts are changed, leading to an increase in the total tax burden on the investor’s activities or establishing a regime of prohibitions and restrictions regarding the implementation of capital investments, such laws and legal acts do not apply to the investor during the payback period of the investment project, but not more than seven years from the date of commencement of project financing, provided that the goods imported into the territory of the Russian Federation are used by the investor for their intended purpose for the implementation of the priority investment project.

Persons carrying out investment activities in the Russian Federation bear responsibility in accordance with priority international treaties or legislation of the Russian Federation.

Along with investors, participants in investment relations, depending on their specifics, can be customers, contractors, users - when making capital investments, issuers, professional participants in the securities market - when making portfolio investments.

The state, of course, has a special legal status in investment relations, which, on the one hand, can act directly as an investor, and on the other hand, as a bearer of power. Legal regulation of state participation in investment activities is carried out, in particular, by the Federal Law “On the Development Budget of the Russian Federation”, the Decree of the President of the Russian Federation “On Private Investments in the Russian Federation”, as well as numerous Government resolutions adopted in this area.

The main source of investment activity of the state is the Development Budget, which is an integral part of the federal budget, formed as part of capital expenditures of the federal budget and used for lending, investing and guaranteeing investment projects. The amount of funds allocated to the Development Budget is established by the federal law on the federal budget for the financial year. The expenditure of funds from the Development Budget essentially determines the methods of direct participation of the state in investment activities:

Stimulating activity

Each state is interested in creating a favorable investment climate and high activity of domestic as well as foreign investors on its territory. To achieve these goals, public authorities have at their disposal an entire arsenal of methods to stimulate this area. The most commonly used approaches are related to special tax regulation of investment activities.

The most typical forms of preferences and tax breaks that are used when collecting income and other taxes from companies in the economies of advanced countries are investment tax credits, tax holidays, a set of measures to stimulate the growth of investments in research and development, and accelerated depreciation. This preferential tax regime significantly stimulates an increase in investment activity.

Law on Investment Activity

The document, adopted 19 years ago, was constantly changed and adjusted. The latest changes, adopted in the summer of the outgoing year, did not bring anything fundamentally new.

Among the positive aspects are the formal provision of tax benefits and the creation of the most favorable conditions for foreign and domestic investors. In practice, everything is a little different (we can talk about the word “a little” in more detail). Of course, articles on state guarantees are also no less interesting. But in fact, apart from beautiful phrases, the system rarely demonstrates positive aspects. There is always hope. And what catches your eye is the emphasis on real investments and the almost complete silencing of innovative projects.

Of course, we want to believe in the best, including in the financial future of the country. In the meantime, the most typical investment activity is the purchase of shares, which you can already read about on my blog. We hope that subsequent changes to the Law will still affect modern investment projects, and we can really talk about improving the investment climate. I would like to believe that this period is already close.

Author Ganesa K.

A professional investor with 5 years of experience working with various financial instruments, runs his own blog and advises investors. Own effective methods and information support for investments.