Russia is a huge market: the population is around 142 million and the GDP was 1.578 trillion USD in 2017 (CIA World Factbook, 2019). As one of the BRIC countries, Russia is believed to be one of the four nations to become dominant suppliers of manufactured goods, services and raw material by 2050.
According to the World Bank Group’s Doing Business 2019 report, Russia has enhanced the regulatory environment for small and medium enterprises. Last year the country carried out four reforms including improvements with construction permits, getting electricity, tax payment (by allowing a higher tax depreciation rate for fixed assets) and trading across borders.
Avoid economical, political and cultural risks - let locals guide you
Over 900 Finnish companies have seen the market opportunities in the neighboring country and operate in Russia. Around 70% of them are in industrial manufacturing. Special Economic Zones throughout Russia offer foreign companies substantial tax benefits.
“There is great potential for Finnish companies in Russia. Finns are known to be honest and have a good reputation in Russia. Besides, we have a long economical, political and cultural ties with our neighbour.” says Elina Kristola, Client Relations Manager of Cressey International Oy that provides expert analysis of Russian investment opportunities, assists with partnerships and helps to expand to the local market.
One of the distinct differences between Finnish and Russian businesses is the ownership structure between the public and private sectors. Roughly speaking, over 50% of businesses are directly state controlled and over 70% of businesses are indirectly state controlled (Vedomosti Newspaper, 2016). Heavy regulations, authorization processes and official documentation require much more administrative work than in Finland.
“There are many local business characteristic in Russia, but it’s possible to deal with these challenges. They shouldn’t be a reason to let the opportunity slide through your fingers.” encourages Kristola. “Our over 20 years experienced team's goal is to assist our customers in avoiding local economical, political and cultural risks on the way of expansion to the Russian market.” she continues.
When you dream of conquering the Russian markets, do some market research to discover a good reason to go and ask for local help to enter the right way. We have found someone who can help and you can find their contact information below.
Contact Cressey International
Cressey International Oy is a consultancy company that works as a link between Finland and Russia. Company’s local experts in Russia provide help with marketing, legal issues & taxation, finance & accounting, IT & digitalization - and much more. www.cressey.fi
Authors: Heidi Tawast, FiBAN; Elina Kristola, Cressey International; Anastasiia Sokolova, Cressey International
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