The aim of this paper is to analyse the state enterprise sector in Russia in terms of its origin, economic significance, principles of operation and efficiency. State-owned enterprises (SOEs) and those dependent on the state – constituting about 30–40% of the full potential of the Russian economy – are particularly strongly represented within the largest Russian companies, in sectors defined as strategic. Therefore, the classification, legal basis and forms of the above-mentioned enterprises will be analysed. It appears that Russian state-owned enterprises operate according to an entirely different set of rules than companies in developed countries and this situation is likely to be intentional. This study will be conducted on the basis of official statistics, a few empirical studies and the analysis of international literature (mainly contained in the various studies conducted by organisations such as the OECD and the World Bank). The following analyses will be carried out: the analysis of legal acts concerning SOEs in Russia, the presence of SOEs will be analysed across the ranking list of the largest Russian companies (including the Top 400 list). Studies of scientific papers in Russian and English will also be carried out. Knowledge on the functioning of the Russian state-owned enterprises and information about the model of corporate governance used in this country (corporate governance of the country) are very limited. Moreover, in papers by various authors one can find ambiguous or even contradictory opinions. This results mostly from differences in the assumptions and definitions, or simply from the use of unreliable / incomplete data. The author expects that this paper will result in the creation of a clear, dependable and objective image of the Russian state-owned enterprise sector. During the past twenty years of the Russian transformation there have been two opposite processes in the field of state property. The first one is privatisation and the second one is the process of strengthening the presence of the state in certain branches of the Russian economy. These two processes will be analyzed in this paper. This analysis will clearly show that despite a huge decline in the SOE sector after the transformation, this sector is still very significant to the Russian economy. Moreover, these enterprises play a crucial role, since they are concentrated in the most strategic sectors, and are more profitable and have other competitive advantages over private enterprises
