Den Amerikanske Ambassade, Moskva.
Redaktion: Øst Magasinet
August 1998 LOCATING A BUSINESS IN RUSSIA BUSINESS IS RUSSIA IS PERSONAL AND LOCAL, AND POTENTIALLY VERY LUCRATIVE. TO BUILD SUBSTANTIAL EXPORTS IN RUSSIA USUALLY REQUIRES A FULL-TIME PRESENCE. A REPRESENTATIVE IS NEEDED TO CULTIVATE LOCAL BUSINESS AND GOVERNMENT CONTACTS, TO ESTABLISH AND MANAGE DISTRIBUTORS, AND TO OVERCOME THE MANY OBSTACLES TO DOING BUSINESS HERE. THOUGH ESTABLISHING AN OFFICE IN RUSSIA CAN BE ARDUOUS AND EXPENSIVE, IT IS BETTER THAN THE ALTERNATIVES: DOING BUSINESS FROM A DISTANCE (WHICH OFTEN GOES NOWHERE), OR NOT DOING BUSINESS IN RUSSIA AT ALL (WHICH MEANS IGNORING ONE OF THE MOST PROMISING NEW MARKETS OF THE DECADE.) WHICH CITY? RUSSIA IS NOT ONE MARKET, BUT A SERIES OF REGIONAL MARKETS WHICH CANNOT BE COVERED FROM ONE CITY, MUCH LESS FROM THE OUTSIDE. YOU MUST DECIDE WHERE TO START. MOST FIRMS START IN MOSCOW; OTHERS HAVE OPTED FOR ST. PETERSBURG OR VLADIVOSTOCK. SELECTING THE OFFICE MANAGER. AT THIS TIME, WE USUALLY RECOMMEND THAT COMPANIES ENTERING THE RUSSIA MARKET HIRE A PERSON FROM THEIR OWN COUNTRY. ALTHOUGH RUSSIA HAS MANY TALENTED ENTREPRENEURS AND MANAGERS, IT IS VERY DIFFICULT TO CLOSELY MONITOR AN OFFICE IN RUSSIA FROM A DISTANCE. FOR THE FIRST OFFICE DIRECTOR, WE RECOMMEND AN PERSON WITH CONSIDERABLE OVERSEAS EXPERIENCE, PREFERABLY IN NIS OR EASTERN EUROPEAN MARKETS. RUSSIAN LANGUAGE ABILITY, WHILE NOT CRUCIAL, IS VERY HELPFUL. IF YOU DECIDE TO SEND A PRESENT AN EMPLOYEE OVERSEAS, SELECT THAT EMPLOYEE CAREFULLY. RUSSIA IS NOT FOR EVERYONE, AND IT TAKES A SPECIAL TEMPERAMENT TO SUCCEED HERE. DO NOT PICK THE SHY, THE UNIMAGINATIVE, OR THE UNADVENTUROUS, NOR THE EASILY FRAZZLED OR FRUSTRATED. WE STRONGLY SUGGEST THAT FUTURE OFFICE DIRECTORS HAVE AT LEAST ONE MONTH OF FULL-TIME RUSSIAN TRAINING. A SMALL AMOUNT OF RUSSIAN GOES A LONG WAY IN MAKING A PERSON FEEL AT HOME. SPEND TIME READING ABOUT RUSSIA -- ITS HISTORY AND CULTURE, BEFORE YOU GO. YOU WILL NEED A VISA. OBTAIN ONE THROUGH THE RUSSIAN EMBASSY IN YOUR COUNTRY. YOU USUALLY NEED A LETTER OF INVITATION FROM A RUSSIAN ORGANIZATION TO OBTAIN THIS VISA. FINDING YOUR TEMPORARY OFFICE. FINDING A PERMANENT OFFICE TAKES TIME, AND YOU WILL NEED A TEMPORARY LOCATION. LUCKILY, MOSCOW AND ST. PETERSBURG HAVE MANY FIRST-CLASS HOTELS WITH 24-HOUR BUSINESS CENTERS CAPABLE OF MEETING BASIC OFFICE NEEDS. PLAN A LARGE BUDGET FOR THIS INITIAL PERIOD. MOSCOW AND ST. PETERSBURG HOTELS CAN COST AS MUCH AS 400 USD PER NIGHT. RUSSIAN-MANAGED HOTELS IN BOTH MOSCOW AND OUTLYING CITIES OFTEN CHARGE WESTERNERS OVER 100 USD PER NIGHT FOR, IN MANY INSTANCES, HORRID QUALITY. GETTING ORIENTED. BEFORE YOU MAKE ANY MAJOR DECISIONS, GET ORIENTED. DO NOT DO MAJOR DEALS UNTIL YOU HAVE BEEN HERE FOR A FEW WEEKS, AND DO NOT SIGN ANYTHING WITHOUT CONSULTING AN ATTORNEY WITH EXPERIENCE IN RUSSIA. REGISTERING YOUR COMPANY. COMPANY REGISTRATION IS COMPLEX. DON'T TRY TO DO IT YOURSELF. FIND A GOOD LAW FIRM TO DO IT FOR YOU. FINDING A LOCATION. YOUR REAL ESTATE AGENT IS YOUR BEST GUIDE TO THE REAL ESTATE MARKET. RENTAL RATES ARE CONFUSING. THE HIGHEST PRICES ARE IN MOSCOW AND ST. PETERSBURG. THE PRICE YOU FACE WILL OFTEN DEPEND ON YOUR PERSISTENCE IN THE SEARCH. THE CLOSER TO THE CITY CENTER -- THE HIGHER THE PRICE. IF YOU DON'T WANT OR NEED STREET-LEVEL BUSINESS, CONSIDER A LOCATION OUTSIDE THE CITY CENTER. YOU WILL FIND MUCH LOWER RENTS, AND OFTEN MORE COOPERATIVE PEOPLE. RUSSIAN CONCEPTS OF PROPERTY AND CONTRACT DIFFER MARKEDLY FROM WESTERN CONCEPTS. YOU WILL LEARN MUCH ABOUT THESE DIFFERENCES AS YOU NEGOTIATE (AND THEN RE- NEGOTIATE) LEASES. EXPECT THE UNEXPECTED. OUTSIDE MOSCOW AND ST. PETERSBURG, PRICES ARE LOWER, BUT QUALITY IS HARD TO FIND. WHEN YOU ARE PICKING A SITE, YOU ARE ALSO PICKING A LANDLORD. THE LANDLORD'S CONNECTIONS AND CHARACTER ARE OFTEN MUCH MORE IMPORTANT THAN THE SIZE AND SHAPE OF THE OFFICE SPACE OR THE AGE OF THE BUILDING. THE LANDLORD-TENANT RELATIONSHIP, LIKE MOST RELATIONSHIPS IN RUSSIA, CAN HAVE SEVERAL DIMENSIONS. BUSINESS IN RUSSIA IS PERSONAL AND LOCAL. THE RIGHT LANDLORD CAN BE AN IMPORTANT ALLY IN FINDING AND SCREENING BUSINESS PARTNERS AND RUSSIAN EMPLOYEES, RESOLVING PROBLEMS WITH THE GOVERNMENT, PROTECTING YOU FROM CRIMINALS, AND EVEN FINDING NEW CUSTOMERS. LOOK FOR A LANDLORD WITH SIMILAR BUSINESS INTERESTS. FOR EXAMPLE, IF YOU ARE A COMPUTER FIRM, CONSIDER LOCATING AT A RUSSIAN COMPUTER INSTITUTE. HOPE THAT YOUR RELATIONSHIP WITH YOUR LANDLORD DEVELOPS INTO AN EMOTIONAL, MUTUALLY BENEFICIAL WEB OF FRIENDSHIP, BARTER, DEAL-MAKING, AND SHARING. CREATING A COMPLETELY WESTERN-STYLE OFFICE IN RUSSIA IS FRUSTRATING, COSTLY, PROBABLY IMPOSSIBLE, AND ULTIMATELY POINTLESS. WESTERN COMPANIES SOMETIMES SPEND SO MUCH TIME TRYING TO SET UP A WESTERN-STYLE OFFICE THAT THEY NEGLECT THEIR PRIMARY FUNCTION -- TO DO BUSINESS. IF YOU ARE JUST STARTING, CONSIDER THE OPTION OF RENTING SPACE IN AN EXISTING RUSSIAN OFFICE. CONSIDER SIMPLY PUTTING COMPUTER AND COMMUNICATIONS EQUIPMENT INTO AN EXISTING FURNISHED RUSSIAN OFFICE -- WITHOUT MAJOR CHANGE. MAJOR RENOVATION WILL PROVE DISRUPTIVE, COSTLY AND LENGTHY. FINDING AN APARTMENT. YOU WILL WANT A COMFORTABLE, SAFE APARTMENT. HAVING A FEW WESTERN NEIGHBORS DOES MUCH TO HELP YOUR SECURITY AND SANITY. CHECK BUILDING SECURITY CAREFULLY. IS THERE A GUARD? HOW IS ACCESS CONTROLLED? WHAT IS THE NEIGHBORHOOD LIKE? GET A SECURITY DOOR. RUNNING THE OFFICE. THE LOGISTICS OF RUNNING AN OFFICE IN RUSSIA CAN BE OVERWHELMING. MANAGERS OFTEN COMPLAIN THAT THEY SPEND MUCH TIME WE SUGGEST EMPLOYING THE RUSSIAN METHOD -- DUPLICATION OF RESOURCES. GET EXTRA COPIERS, COMPUTERS, AND FAX MACHINES; AND HIRE AT LEAST ONE PERSON WHOSE SOLE JOB IS TO KEEP THE OFFICE GOING. CONSIDER BUYING LOCALLY, BECAUSE DUTIES AND CUSTOMS HASSLES CAN BE EXPENSIVE AND TIME-CONSUMING. MOST BUSINESS EQUIPMENT IS AVAILABLE IN MOSCOW, THOUGH PRICES MAY BE HIGHER AND SELECTION LOWER THAN IN THE WEST. (RUSSIAN APPLIANCES OPERATE ON EUROPEAN, NOT AMERICAN VOLTAGES; ANOTHER REASON NOT TO BRING THINGS FROM HOME.) COMMUNICATION IS A PERPETUAL PROBLEM IN RUSSIA. THE POSTAL SERVICE IS SLOW AND UNRELIABLE, AND THE TELEPHONE SYSTEM WILL EVENTUALLY REDUCE YOU TO TEARS. CONSIDER BUYING CELLULAR PHONES -- LOCALLY. THESE ARE ESPECIALLY USEFUL WHEN YOU ARE LOST ON THE WAY TO A MEETING. ELECTRONIC MAIL IS ONE OF THE BEST COMMUNICATION METHODS IN RUSSIA IMPORTANT: TODAY, PARTLY BECAUSE ELECTRONIC MAIL ENABLES YOU TO BYPASS THE CONFUSED RECEPTIONIST WHO SO OFTEN PICKS UP THE PHONE IN A RUSSIAN OFFICE. GET AN E- MAIL ADDRESS AND MAKE SURE IT IS PRINTED ON YOUR CARDS. MOSCOW AND ST. PETERSBURG HAVE A NUMBER OF TELECOMMUNICATION FIRMS THAT CAN ARRANGE COMMUNICATION FOR YOUR COMPANY. HIRE A LOCAL DRIVER WITH HIS OR HER OWN CAR. FOREIGN-MADE CARS (ESPECIALLY WITH FOREIGN LICENSE PLATES) ATTRACT MUCH UNWANTED ATTENTION FROM BOTH CRIMINALS AND THE BRIBE-HUNGRY LOCAL MILITIA. A LOCAL DRIVER WHO KNOWS THE ROADS AND THE TRAFFIC WILL SAVE YOU THE HASSLES OF RUSSIAN TRAFFIC. HIRING EMPLOYEES. REMEMBER THAT RUSSIANS WERE BROUGHT UP IN A COMMAND ECONOMY. THE SYSTEM DID NOT REWARD -- AND OFTEN PUNISHED -- INDIVIDUAL INITIATIVE. NEWLY HIRED RUSSIANS WILL NEED SEVERAL MONTHS TO ADAPT. BE WARY OF RUSSIAN EMPLOYEES WITH MIXED LOYALTIES. WHILE MOST RUSSIAN EMPLOYEES WILL REWARD YOU WITH OUTSTANDING LOYALTY, A FEW WILL BE UNABLE TO BREAK OLD HABITS OF RUNNING SEPARATE, COVERT BUSINESSES ON THE SIDE. WAGES AND PRICES IN RUSSIA ARE SUBJECT TO WIDE VARIATION AND UNCERTAINTY. RUSSIA IS NOT YET A MODERN ECONOMY WITH FREE-FLOWING GOODS, SERVICES, AND INFORMATION. WAGES ARE HIGHEST IN MOSCOW, ST. PETERSBURG, THE OIL PRODUCING REGIONS IN SIBERIA AND THE FAR EAST; THEY ARE LOWEST IN RUSSIA'S RURAL AREAS AND DEPRESSED INDUSTRIAL CITIES. DESPITE OCCASIONAL PLEADINGS FOR DOLLARS FROM YOUR RUSSIAN EMPLOYEES, YOU SHOULD PAY IN RUBLES AND FILE APPROPRIATE DOCUMENTS WITH THE GOVERNMENT. BE SURE TO WORK WITH YOUR ACCOUNTANT TO FILE ALL NECESSARY TAX AND SOCIAL SECURITY FORMS. MOST HIRING IN RUSSIA IS DONE THROUGH PERSONAL REFERRALS. IN MOSCOW AND ST. PETERSBURG, A NUMBER OF PERSONNEL AGENCIES CAN HELP YOU FIND TEMPORARY AND PERMANENT HELP. CRIME DO NOT LET MEDIA STORIES ABOUT CRIME DETER YOU. RUSSIAN CITIES ARE STILL SAFER THAN MANY U.S. CITIES. KEEP A LOW PROFILE; AVOID SEEDY NIGHTCLUBS; LOCK YOUR DOORS; DO NOT TAKE UNMARKED TAXIS AFTER DARK; AND YOU SHOULD BE REASONABLY SAFE. WHEN OUTSIDE YOUR APARTMENT, CARRY EMERGENCY NUMBERS IN YOUR WALLET. ALWAYS KEEP A PASSPORT WITH YOU, AND A COPY OF YOUR PASSPORT IN YOUR APARTMENT OR OFFICE. BEATING CULTURE SHOCK. COPE WITH CULTURE SHOCK THE SAME WAY YOU WOULD COPE WITH STRESS AT HOME. TALK TO PEOPLE ABOUT THE PROBLEMS. GET OUT OF RUSSIA EVERY FOUR MONTHS TO TAKE A BREAK. GET REGULAR EXERCISE. FOCUS MORE THAN USUAL ON GETTING GOOD THINGS TO EAT AND ENOUGH SLEEP. DON'T DO 100-HOUR WEEKS HERE; THEY WILL PUT YOU IN A HOSPITAL, AND A RUSSIAN HOSPITAL IS NOT A GOOD PLACE TO BE. ABOVE ALL, HAVE A SENSE OF HUMOR, AND FOCUS ON THE POSITIVE.