Starting a Business in Russia

1. Russia >
2. Starting a Business

Why Start A Business In Russia?

Russia is the largest twentieth-century example of why capitalism talks and communism walks. After eight decades of rigid Red rule, the bear was finally let out of the cage. It is still a mere infant in capitalist years, and if anyone has taken the phrase 'free market' too literally it's Russia. There are few barriers, few restrictions and few lines drawn in the corporate sand.

Exploitation has been rife at times, and there are instances of criminality at the highest levels of government and business. Corruption is no secret, though, so it is probably best we get it out of the way now. Political transitions are not mellifluous by nature, and Russia suffered. Yet something has risen from the ashes: the phoenix of a new Kremlin, a new ethic, a new opportunity.

Success breeds in the most unlikely of situations, and like most countries that have recently found capitalism, times are good for investment. Russia is currently flirting with top-ten economic status, adamantly poised in eleventh place. It is the biggest and most attractive emerging market, and its advantages read longer than Tolstoy. Frankly, there has never been a better time to be a part of Russia's new chapter.

Stifling red tape might be tougher to plough through than the Soviet snow, but its no better or worse than other emerging markets, and even some developed ones. If we're discussing the bureaucratic barometer, just look at Italy and we'll say no more. Things ultimately get done. In other areas of economics, Russia excels: special free zones, concession agreements, independent investments funds and development banks. It also maintains a progressive approach to economic advancement, focused primarily on stabilisation and eclecticism.

If there is one word associated with emerging markets, it's booming, and if there's one word that connotes booming, it's Russia. The challenges of market entry shouldn't be underestimated, but the Great Bear is an eastern promise of opportunity. If you want to be part of the great emergence, then read on to find out more.

What is the currency?

The currency in Russia is ruble (or rouble). The current exchange rate is £1 = 46.562 Russian ruble.

What's the climate and weather like?

The climate in Russia can vary due to its vast size. Resulting from the size and remoteness of many areas is Russia's continental climate. In the south, the country is subject to Arctic and Atlantic influences, as a result of mountains obstructing the flow of warm air masses from the north and west plain and Indian Ocean.

There are only two distinct seasons - summer and winter. Spring and autumn are usually brief periods between the changing temperatures of summer and winter. The coldest month is January (on the shores of the seas it is February) and the warmest is usually July.

What's the population?

The population of the Russian Federation in January 2008 was 142 million people. It is a diverse and multi-cultural society, with as many as 160 different ethnic groups.

Economic overview

The Russian economy is generally booming. It has enjoyed eight years on consistently robust growth. It is the tenth largest economy in the world, with a GDP of $1.2 trillion. Sinbce the turn of the century, Russia has operated large fiscal and trade surpluses, collecting foreign reserves of over $400 billion.

Russia's main industries are energy - it has the world's largest natural gas reserves, with second largest coal and eighth largest in oil.

As Russia is a major energy superpower; oil, natural gas, metals and timber account for more than 80% of its exports.

Russia's largest import is machinery, equipment and transport equipment, which accounts for 51.3% of its total imports. Its second largest import is of chemical products and rubber (16.6%).

Labour and workforce

Unemployment is fairly low in Russia at 6% in 2007, down from 12.4% in 1999. The average salary was $640 per month in early 2008.

Click here to Ask an Expert about Starting a Business in Russia