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Is Russia a good place to do business?

The business environment in Russia has been steadily improving since the transition from a centrally controlled planned economy to a free market, though the economic crisis has had a significant impact on the business climate. In recent years, many reforms have been implemented,the tax system has become fairer and more transparent, Russia has become increasingly integrated with globalmarkets, and customs have improved appreciably.
Russia has seen rigorous growth in the past decade, and its credit rating has improved substantially. Its major source of revenues are oil and gas, with the petroleum sector making up more than 35% of total revenues and 55% of exports. Top export niches include infrastructure (roads, railways, ports, urban transport and airports), the transport sector (including seaways and cars), telecommunications, health-related products, business management systems, agribusiness, environmental technologies, power generation to meet an explosive demand for energy, measuring instruments, and machinery and equipment (particularly for the oil, gas and mining sectors).
Now, concerning Russian business environment. It depends what you want to do to decide if Russia is a good place to do business. However, the common characteristics about companies that are successful in Russian business are that they committed, dedicated and serious. Russia, we were once told, is not a market for 'dilettantes'.
This should be obvious; however, for reasons that have never been quite clear, there is an all-too-common misconception that business in Russia should be easy and that if a piece of big business hasn't fallen in one's lap, one just hasn't pulled the right strings or met the right person. One can always relate cases of where this has indeed happened, but in general they are very rare.
Another all-too-common misconception is that Russian business is quite difficult. The truth, as always, lies somewhere in-between: for those companies who are prepared to do all the groundwork and take the market seriously, yes, Russia usually is a good place to do business.
When doing business there, watch your costs, as wages and prices in Russia are subject to rapid change. Do a background check on people you deal with; Russia's tumultuous political environment creates security issues for exporters. It's also important to ensure that you meet Russian manufacturing standards. Russia's Gosstandart requires all imported manufactured products to carry the GOST-R mark to show conformity with national safety standards.
It is probably fair to say that the Russian market still shows great inefficiencies in many areas, and that certain sections of the market (sectoral and geographical) are greatly undersupplied or underexploited. Some of the best opportunities lie in these areas. Of course, such opportunities come with their own problems: after all, if there were nothing to it, everyone would be doing it, right?
However, Russia is not for everyone, and it takes a special temperament to succeed here. Business in Russia is not for the timid middle unimaginative, or the unadventurous entrepreneur who has never worked outside his country, nor for the easily frazzled or frustrated. Meeting the challenges of doing business in Russia requires all the stamina, fortitude, perseverance, and patience one can master.

1 Comment to Is Russia a good place to do business? :

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Marketing technology on January-05-13 9:50 AM
Thank you for posting the great content…I was looking for something like this…I found it quiet interesting, hopefully you will keep posting such blogs…
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