Doing Business in Russia

Doing Business in Russia | BCBusiness
Forget stereotypes when dealing with Russia’s proud people.

Opportunities can be found for those willing to run against the tide of sanctions

Even before Russia became a pariah state thanks to its imperialist intentions, it was no picnic for Canadian companies wanting to do business there. A burdensome regulatory regime, widespread corruption and shoddy infrastructure have hampered investment since the country opened up in the mid-1990s, warns the U.S. Department of Commerce in its commercial guide for doing business in Russia. Nevertheless, Russia’s growing consumer class and recent accession to the WTO suggest opportunities for those willing to buck the tide of international censure. For companies still intent on capitalizing on Russian opportunities, here are a few tips.

Cold, Flat and Empty

The country east of Moscow—extending for another eight time zones—is cold, sparsely populated and intermittently blanketed by boreal forests and tundra, not unlike most of Canada. “When it comes to what the Russians need, Canada has something to offer,” says John Sloan, Canada’s former ambassador to Moscow. He explains that because we have experience adapting to similar challenges of climate, distance and infrastructure, a lot of the equipment and technology developed in Canada is well suited to Russia.

Trust but Verify

Canadians should be prepared for the quirks of Russian culture, and a long-term relationship with their Russian partner. Investors should be ready to make multiple visits, spend time on the ground and invest in local legal advisers and personnel. “Regardless of who your partner is, you’re going to have to do what the Russians call ‘trust but verify,’” says Lou Naumovski, a Moscow-based director with Kinross Gold Corp. “Trust that you are speaking the same language and that your terms are clear, but you still have to verify whether the expectations of each other are appropriate.” “Russians are proud people,” says Tatiana Domilovskaya, director of the Canadian Eurasia Russia Business Association. Defaulting to stereotypes will do your interests more harm than good. “Be patient, be understanding and do your homework,” she advises.