Do business in Russia!
The growing global competition, the accelerated technological development and the participation of international businesses in developing countries, converges to the need to develop new models of internationalization. In this article we will cover important points about doing business in Russia.
The country is quite open to foreign trade, which represents about 51.5% of GDP (World Bank, 2018), despite strict legislation and policies. Russia became a member of the CIS in 2012, a member of the Commonwealth of Independent States that established a free trade area and a member of the Eurasian customs union.
Russia and Ukraine have abolished their mutual trade preferences. The Eurasian Customs Union has signed an agreement with Vietnam and is negotiating free trade agreements with for example, Iran, India, Egypt, Singapore and Serbia.
Now we check some reasons that make Russia a good country for business:
- Russia is the 14th largest exporter in the world and the 22nd largest importer of goods in the world (CIS <2018)
- The country exports mainly hydrocarbons (more than 50% of total exports), solid fuels, steel and iron, wheat and mescal, precious metals, wood
- It main focus is also the import of machinery, pharmaceuticals, electronics, vehicles and plastics
- Its main trading partners are China, Germany, the Netherlands and Belarus
- The country has been showing large and regular trade surpluses since 1998
- Studies indicate that the Russian currency will strengthen and the dollar exchange rate will reach 53 to 55 rubles, which would make investments in the Russian currency more profitable
- Weak political influence
- In the financial sector, Russian tittles represent a good investment opportunity because they have a fixed return and do not depend on economic growth, according to Puchkariov
- In addition, there are good opportunities in the IT, auto, mining, timber, agriculture and tourism sectors. According to Puchkariov, foreign investors should carefully study the sectors and projects supported by the State, because they will grow faster, compared to the market average.
This article was published in order to investigate and update the main trends in the research area, in order to contribute to evidence-based management.