Business in Russia
Russia is becoming increasingly attractive for foreign companies. It is not only due to the vast natural resources. Today Russia is a source of business opportunities.
Russia is becoming increasingly attractive for foreign companies. It is not only due to the vast natural resources. Today Russia is a source of business opportunities. This country attracts large international banks and trading networks, mining companies and equipment suppliers engineering centers and R&D organizations. They are all driven by the unlimited choice of areas where to develop business in Russia, make use of the country’s experience and potential. The business climate in Russia has been constantly improving since the transition from a centrally planned pattern to a market economy.
Major European rather experienced business companies from France, Germany, Scandinavia and other countries are well-established in both industrial and consumer markets in such cities as Moscow and St. Petersburg which are creating branches in the smaller regional cities anвrapidly increasing this way, their business opportunities.
There are strong growth possibilities in a number of consumer goods and services driven by increases in the level of income in many business centers of Russia. It would be reasonable to say, that the Russian market still demonstrates inefficiency in some areas, and certain market sectors and geographical areas are rather undersupplied or unexplored. There are very good business opportunities which lie in these areas. The most challenging sectors in the country are as follows:
telecom equipment and services especially Wi-Fi
hardware and software
motor vehicles and parts
safety and security equipment
The Russian public sector is working on many new IT projects under the Russian federal e-Russia program. The IT services market is concentrated on large-scale projects. However experts in business development expect the proportion of SME projects to increase in the near future. There is strong development in the transport, energy, machinery and healthcare sectors:
oil and gas equipment
It is also expected that the Russian grocery market will be the largest in Europe in ten years’ time. Foreign businesses are also active in the Russian ferrous and non-ferrous metals sectors. Overseas companies have invested in commercial services such as advertising and PR. Russian R&D organizations would be highly motivated to carry out research and development work from abroad on a sub-contractual basis in addition to official financing and keep their staff working.
The best opportunities for experienced global business companies lie in developing exports in the above-mentioned sectors. The best way to establish in the Russian market is through a reliable local partner or distributor. It should be noted that doing business in Russia is about networking with the different people rather than a working on a paper basis.
According to the Russian law, business presence of foreign firms in Russia can be established in several ways, e.g. local representations, legal entities, JV agreements.
The first franchise partnerships in Russia were established with companies in the cities Moscow and St. Petersburg. However they are becoming too expensive and subject to fierce competition. Other provinces represent excellent business opportunities too. There are rapidly developing cities with a population of over one million. Those have well-trained workforce, experienced entrepreneurs and efficient relationships with local authorities. There is a great demand for famous brands and western-style services in the regions.
Russia’s business opportunities should be better promoted. In fact every sector of the economy, both public and private, requires investments, and with its significant natural resources Russia is able to pay.