Doing Business in Russia

January 25, 2018

Russia stretches over a vast expanse of Eastern Europe and Northern Asia. It is considered the largest country in the world in terms of territory, covering nearly twice the territory of Canada, which is the second largest country. It is bordered by 14 different countries, which creates an interesting mix of cultures and nationalities. Russia is a multinational state with over 185 ethnic groups.

 

After the dissolution of the Soviet Union in December 1991, Russia became an independent country.

 

Doing business in Russia requires knowledge of the country's culture, laws, economy, language and other country specific attitudes and approaches.

Language

 

GPI-Russian Business-home

Russian is an East Slavic language and an official language in Russia. It is spoken in Russia, Ukraine, Azerbaijan, Kazakhstan, Kyrgyzstan, Ukraine, Latvia, Moldova, Estonia, Georgia, Tajikistan, Lithuania, Uzbekistan and Belarus.

 

Although Russian is the only official language on the national level, there are many other official languages including: Azerbaijani, Chuvash, Ukrainian, Tatar and Tuvan. These languages are spoken in regional areas by a significant percentage of the Russian population. Many Russians also speak English as a second language.

Business Culture

 

For anyone doing business in Russia, there are key values and professional ethics regarding business communication, meetings and relationships that they must be aware of:

 

  • There is an extremely hierarchical structure in private and public organizations.
  • It is considered rude not to remove gloves when shaking hands.
  • Making decisions usually takes time and they are made at the most senior level.
  • You should never address people by their first names unless invited to do so. It is important to show respect for authority and seniority to maintain strong business relationships.
  • Men and women should dress conservatively with formal clothes in the workplace.
  • Exchanging business cards is very common and cards should display contact details in both English and Russian.
  • Foreigners doing business in Russia must have all their printed materials in both English and Russian.
  • Russians are very punctual, especially in business meetings.

Economy

 

Due to its vast geography, Russia is estimated to have over 20% of the world's natural resources. Therefore, the Russian economy is mostly based on the extraction, processing and export of various types of natural resources including: oil and natural gas, coal, iron ore, diamonds, gold, silver, nickel, platinum and copper. Russia is the world's largest energy exporter and is the world leader in production of oil.

 

On August 22, 2012, Russia's economy expanded beyond energy when Russia became a member of the World Trade Organization, which provided Russia with greater access to foreign markets.

Business Laws and Regulations

 

Doing business in Russia requires fulfilling some routine legal requirements. Registration of a new company can take anywhere from three business days to up to six weeks. All types of companies in Russia (limited liability companies (LLCs), Joint-Stock Companies (JSCs) and partnerships) are required to maintain a registered office address within the country. Russian tax law applies a corporate tax of 20% on all business entities and allows business losses to be carried forward for ten years.

Future Outlook

 

In 2017, Russia's economy grew modestly following a recession caused by the shocks of low oil prices and economic sanctions. According to the World Bank, positive global growth, recovery in trade, rising oil prices and growing macroeconomic status are reasons for Russia's recovering economy. The World Bank projects Russia's economy to continue to grow in the coming years.

Further Resources from GPI


You may gain further insight into country specific cultural facts and related topics by reviewing some previous blogs written by GPI:

 

 

Please feel free to contact GPI at info@globalizationpartners.com with any questions about our translation services. Also let us know if you have any interesting blog topics you would like us to cover in future blogs.

 

Sources:


http://www.bbc.com/news/world-europe-17839672

http://www.worldometers.info/world-population/russia-population/

https://en.wikipedia.org/wiki/Borders_of_Russia

https://en.wikipedia.org/wiki/List_of_ethnic_groups_in_Russia

https://www.familysearch.org/wiki/en/Russia_Languages

https://www.worldbusinessculture.com/country-profiles/russia/

https://en.wikipedia.org/wiki/Economy_of_Russia

https://www.advantour.com/russia/economy/natural-resources.htm

http://www.healyconsultants.com/russia-company-registration/accounting-legal/#legal

Category:
Country Specific
Tags:
Russia, Doing business in Russia

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Mai Farouk Mohamed Nour (Mai Nour) is a native Arabic speaker who lives in Cairo, Egypt. She is a senior copywriter, translator and reviewer with great passion for translation and creative writing in English and Arabic. Mai obtained her B.A. degree in English Language and Literature from Faculty of Alsun, Ain Shams University. She has a well-rounded experience exceeding nine years in copywriting and translation working with various companies throughout the Middle East. Her primary translation and writing focus has been on the subjects of legal, technical, hospitality, localization and general marketing, and has significant experience translating legal and marketing projects and HR and literary books. For her, translation is more than a career, it is a mission. When Mai is not working she enjoys traveling, reading, coloring, and going to the movies.