Doing business in a foreign country comes with its risks and challenges. Before you step inside a foreign market you need to understand the 5Ws; who, what, where, when and why;
- Who are you as a business entity?
- What products or services you want to deliver?
- Where you want to conduct business?
- When is the right time to launch a business?
- Why do you want to go for it?
Once you have figured out answers to these questions with a clear perfection, you are ready to start your business in a foreign country.
If you are looking to expand the business horizon in the Russian Federation, you need to understand convoluted business setups. You will encounter new regulations, working to compete with local businesses and such.
A basic portfolio of Russia
Russia is a country thriving on culture and surpassed its historical Soviet Union’s dissolution in 1991 but still accommodates 22 republics. Majority parts reside in Europe and are considered to be the world’s largest country. Interesting point is, there are 11 different time zones in Russia, so when you decide to pick a location do keep time zone mind.
Ranked at 12th positions for a Nominal GDP, Russia has been renowned for the manufacturing companies especially in arms and ammunition is one of the succeeding industries to exist so far. Russian companies are also emerging in markets of South Africa, China, India, and Brazil. Despite the low population, it ranks 6th largest in terms of purchasing power parity (PPP).
Learn the language
When you are considering doing business in Russia, it’s important to learn the language as well. Russian is the official language but it slightly variates in dialects across the many states.
Besides Russian, there are 27 languages; some are native while some of them are a mixture of old regions versus the new region. Immigrants living in Russia, speak their native language, so it becomes vital as a business entity to as much as possible.Â
Emerging market in the economy
Russia comes with benefits and several pea factors that attract the eye of business personnel. A country with the most significant foreign currency reserves can help you make a name for your brand and increase your audience in the Russian market. With the revitalized efforts by the government, investors are much confident than ever to institute their money in the rightful place. However, most booming industries so far include pharmaceuticals, retail, and telecommunications.
How to start a business in Russia
There’s a list of things you want to be prepared for when you plan to enter Russia. Always start with the basic considerations like hiring Russian translation services to understand and be able to better accommodate according to the new market and vice versa.
Immigration status
The very first thing to ensure is your immigration status, whether it allows you to do business in Russia or not. Make proper inquiries if you need a business visa, work visa or a residency permit. This way you can start to plan properly how you will conduct business and at what level.
Prepare a business plan
Is your idea feasible to enter the Russian market? Before you enter Russia, make a business proposal asking all the right questions. Not every business can succeed no matter how innovative your idea is, it needs to be practical.
So do thorough research, you can even find business plans samples territory wise, and study them in detail.
Understand legal structure
Once you are confident your business idea will work and has a sustainable market, then follow up to the next step, the legal structure. Get information about the types of companies like in Limited Liability Company each shareholder has to contribute the minimum amount of R10, 000 and so on.
Besides Limited Liability Company there are JOS (Joint Stock Company), partnership, sole ownership, branch or franchise, etc.Â
Select business details
Work on the business name and address of your company. It shouldn’t b similar to any local Russian company. It must be appropriate, culturally fit and yet sound futuristic when you make your business plan.
Choose the location that fits best according to your business nature. Remember with different time zones you have to be selective about the location.
Foundation documents
According to Russian legislation, as a founder, you need to draw up a foundation document. These are the charter and founding agreement, a necessary step towards your Russian dream;
- Company name (with abbreviations if any)
- Cofounders names and signatures
- Amount and nature shareholder contributions (cash or kind)
- Rules and policies
- Legal responsibilities
- Details of directors (if needed)
Russian company register
Once the founding documents are done, you need to send them to the registration office of the Federal Tax Service (FTS);
- Registration application
- Foundation documents copies
- Proof of business’s legal status
- State registration fee
Once these requirements are sent, within 5 days, FTS will either approve or refuse the registration. In case, your business request is approved you will get the following number of documents;
- Certificate of Incorporation
- Tax certificate
- Business tax identification number
- Copy of your foundation documents with the mark of registering authority
- Extract from the Common State Register of Legal Entities
Bank account opening
Once all official documents are procured, you have clearance to open a Russian business bank account. 18-21 days is the estimated number of days to complete the process. You will need the following items to secure a business account;
- Incorporation Certificate / Tax Certificate
- Founding documents
- Russian business license (if needed)
- Notarized signatures
- Confirmation documents for identity and authority with signatures
Conclusion
Once you have accomplished the basic procedure, get familiar with the rules and regulations of Russia, working conditions with all details. To start up a business venture abroad requires more than just a basic understanding of the foreign market. You need to choose the right country and ensure the location you chose is in your business's best interest. You can benefit from being a foreign entrepreneur, so implement your business strategies in a careful and precise manner.
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