Doing business in Russia: not “why?” but “why not?”

All this is very unfortunate, and British businesses which do not take a leap of faith to test the waters in Russia are missing out on huge opportunities. As one Englishmen whose company is doing very successful business in Russia wrote to me recently,

It would be better if those not too familiar with Russian business realised that what goes on at the political level and appears on the BBC and CNN does not affect our day to day business one iota.

There are openings for business in Russia in just about any sector you care to name. A significant number of UK retailers have established their brands in Russia (and not just in Moscow; I was very impressed last year when in Yakutsk, in Eastern Siberia, to see a prominent British ladies’ fashion retailer with a franchise there). UK lawyers and others engaged in financial services are well represented on the Russia market. Many of the sporting facilities being constructed for the Winter Olympics in Sochi in 2014 and for the 2018 Football World Cup are being built with the assistance of British designers, architects, project managers and construction firms. And UK companies are prominent in what Russia deems, “the strategic industries”: oil, gas, timber, precious metals.

By far the best approach when doing business in Russia is to find a reliable Russian partner, whatever your sector and whatever the size of your business. This, of course, takes time and, as we all know, time is money. But those companies which do invest the necessary time and money almost invariably find that it pays off. The idea that Russia is a place where you can go in, do a quick deal and make a fast buck and then get out again is as much of a myth as the line that there are bears walking the streets of Moscow. If you’re contemplating doing business in Russia, understand one thing from the start: when you go in you’re looking at the long term.

Something which will help you greatly, and may well come after a couple of trips to Moscow, is not simply an understanding of the country, its people and its foibles, but even a love for the place. Such a concept may seem unnecessarily sentimental when talking about business; but this was a response from another company in our recent survey:

Try to understand Russians and to have a genuine love for Russia. It sounds trite but it is completely true...It’s something that may come over time by making many visits and immersing yourself in the Russian culture (and that’s not just drinking vodka). It helps if you have a genuine interest and fascination in the first place, however mild that may be. It’s about getting to know your counterparts and building a very strong trust.

The single biggest problem which comes up time and again when dealing with Russia is bureaucracy. There are rules and regulations with roots back in the Soviet era and even longer which make no sense to the Western business mind (nor to the modern Russian business mind; but modern Russian businessmen don’t yet make the rules). Of course, bureaucracy can give rise to another problem: corruption. Bureaucracy and corruption are two sides of the same coin. The more awkward rules are, the greater the temptation to cut through that particular Gordian Knot by quietly slipping someone a brown envelope: DON’T DO IT!

First of all, any UK company not only engaging in bribery itself, but even becoming involved in a chain whereby one of their partners may be doing it runs the risk of falling foul of the UK Bribery Act 2011. The Serious Fraud Office have made it clear that they are serious about this, and companies face the risk of large fines and even prison sentences for directors or individuals who are involved in bribery.

Secondly, you don’t need to do it to carry out successful business in Russia nowadays. Yes, it may take longer to get started, but it will mean that you will have built a solid foundation on which to carry out business for the years ahead. What’s more, if you give a bribe just once, you become marked for ever as “one of those companies which gives back-handers” and it will be very difficult – probably impossible – to lose that reputation.

The corporate communication, advertising and film/digital/live events markets give great scope for developing exciting and challenging partnerships. Many young Russians (especially in Moscow and St Petersburg, but in many other large cities) are not only well educated, technically savvy and speak English, but are extremely enthusiastic. Many of them have shaken off the shackles which so tightly bound their parents to the Soviet system, which discouraged initiative and entrepreneurship; and they are highly creative. Don’t go in and try to tell them how it should be done. Do go there and ask to work with them.

Not only will you find that your own creative ideas will be enriched, but (to return to the sentimental side) you’ll find that you’ll make lasting friendships which will enhance not just your work but your life, too. Get to know Russian culture, get to know Russians; and then transfer this into your work. In the field of the creative arts you’ll find that your vistas expand more than you thought possible.

And if you need that extra helping hand, try entering the market with the help of the Russo-British Chamber of Commerce (RBCC). RBCC has been helping companies from each country since 1916 (the year before the Bolshevik Revolution). With totally bi-lingual teams in each country and the biggest network of any organisation involved in Russo-British business, RBCC can guarantee that they can help. No-one knows Russia like RBCC.