Эссе: Advantages and disadvantages of business in Russia

I would leave judgement of pros/cons of the country to those who believe are capable to. Actually, it is endless and long discussion, as Russia’s history.

As of the marketplace, the Russian economy is known to be:

1. the biggest consumer market in Europe

2. most assets being greatly undervalued

3. direct access to Eurasian Economic Union national markets

4. highly educated yet cheap manpower

5. quite a number of incentives for international investors and new market entrants

6. and Mr Putin’s key mantra: stability, stability, and stability

That said, the key market advantage, in my opinion, is in unsaturated market opportunities that proved to make miracles in the last few years (take agro industry and Russia’s No1 in exports of grains today as a sample). However, it is not a quick buck market anymore, as used to be. Consumerist economy has gone. It is much more advantageous to invest in local manufacturing/ assembling / business development/ R&D than exporting most of the goods for internal market. Interesting fact: quite a number of Chinese, for example, government controlled companies place manufacturing orders in this country. Why? For 2 reasons mainly:

Cheaper costs (manufacturing/ development and labour ones), and

Highly skilled manpower.

Quite a number of global players choose to placing their manufacturing and/ or R&D orders in this country. It has not turned into a mainstream yet though (it’s a hot opportunity!). The Russian government supports that by offering tonnes of incentives to investors involved in developing businesses here - no matter for internal consumption or exports - including reduced income and other tax burden to nearly zero (at least 1% is supposed to be paid as profit tax, based on the best practices). Due to a lot of PR-like hype around the country in the last few years (eg, Crimea, Eastern Ukraine, Western sanctions, Russian counter-sanctions, something around US President elections, etc), economic advantages of the Russian market are often overseen by many internationally businesses.

The beauty of the Russian marketplace is in its relatively low market entry costs, subject you know the right local partners and/ or consultants to deal with. The latter has nothing to do with any hints to corruption or protectionism. It is a known fact [among international market entrants in the know] that it is a way easier and less costly (read: efficient) to capitalise on this market opportunities having a local partner on your side (due to language, culture, local connections, you continue the list).