Doing business in Russia is possible even in 2020, because of its world’s largest economies. Yes, pandemic of coronavirus had an impact on it, but due to its stability and reliability it will be quickly rebuilt.

Russian economic attracts potential foreign investors who want to open a business here. Several special economic zones exist in our country and they encourage investments in fields like industrial production, technology, and development, logistics or tourism.

Although it may be seen as a country that presents certain challenges, Russia continues to implement policies that encourage foreign investments, particularly in business fields like innovation or technology.

In this article we will describe what you need to start a business in Russia in 2020.

The pros of opening a company in Russia

First of all, the system of taxes in Russia facilitates foreign investments, as these types of companies are treated much in the same way as local ones. Each company is liable to taxation and the corporate taxation is based on residency: resident Russian companies (those that are actually incorporated in the country or have their place of management here) are taxed on their worldwide income. Non-resident companies are only taxed on the income they produce from their business activities in Russia. The corporate tax rate is 20%.

Dividends paid to a foreign company are taxed at a 15% rate unless a double tax treaty applies. Other taxes for companies include social security, stamp duty, a property tax imposed on a local level, a land tax. The value added tax in Russia is 18% and a reduced rate of 10% or 0% apply in certain cases.

Many double tax treaties were signed with more than 70 countries allowing foreign investors to benefit from double taxation relief.

Secondly, its unique geographic position facilitates exports: Russia is a link between Europe and Asia and it is bounded by three oceans. It has electrified railroads and a vast network of pipelines and warehouse facilities.

Thirdly, technology sector is very developed, especially areas like chemistry, metallurgy, machinery, aerospace or nuclear physics.

Fourthly, Russia is considered one of the world’s biggest consumer markets; this is especially due to the fact that is the largest country in the world.

Fifthly, russian working class is well known for being very well trained and educated. With many educational institutions, Russia is trying to facilitate the road to success to all its employees.

How to start a business in Russia

The time needed to incorporate a business in Russia is approximately 11 days if all the requested documents are submitted correctly. There are nine steps that must be accomplished before registration. An investor may choose to open a sole proprietorship, a partnership (limited or general) or a company (limited liability or a joint stock company).

Foreign companies can also open a branch or a representative office. Each company must be registered with the Russian authorities; branches and representative offices must also be registered with a tax inspectorate for foreign companies.

The government supports the new business through various incentives. In fact, there are special bodies that assure the connection between the government and the business market, such as Foreign Investment Advisory Council. Special Economic Zones were created to motivate the investors to start a business here.

The procedure of opening a business in Russia consists of:

1. 1. Preparing the statutory documents.
2. 2. Finding a legal address: you can rent offices spaces or start with virtual office services.
3. 3. Opening a bank account: you should deposit the share capital in accordance with the Company Law requirements.
4. 4. Trading Register fillings: and also you have to apply for a tax and a VAT number.
5. 5. Applying for various permits and licenses in accordance with the industry the business will operate in.

Next steps of setting up a company in Russia

If you perform all these steps and finish to do the paperwork, you should think about marketing strategy: how will you promote your business in Russia.

Web development

To attract new customers, you should have a good, functional and user-friendly site in Russian. But to do it, you should analyse business area, direct competitors and target audience; integrate it with analytics and CRM-system; adapt it to mobile version.

Moreover, in Russia users are attracted by game moments:  tests, quizzes, mini-quests, etc. The goals of a commercial website in 2020 are to engage, entertain, educate, and only then sell.

SEO

If you have a site, you should optimize it to increase attendance and other metrics. Google has a strong presence in Russia, but it’s vital that your SEO strategy takes Yandex into account.

To get content indexed more efficiently within Yandex, it’s important to submit sitemaps via Yandex.Webmaster. And it can be difficult to understand how It works.

Contextual advertising

One of the most effective methods to find Russian clients is using Yandex.Direct. It Is something like Google.Ads, but it has its particular specifications. We have already published an article about it that you can find in our blog.

Social Media Management

The key to success in promotion in Russia is to create and develop your communities in Social Media: VKontacte, Facebook, Instagram, Odnoklassniki, etc. To complete this task, it is necessary to know particularities of their audience, functionality, etc.

These are just some of methods you can use to boost sales in Russia. In our other articles we will talk about them in greater detail.