Business in Russia

Russia turned out to be one of the cheapest countries for doing business

Russia has overtaken the United States in the ranking of the cheapest countries for doing business. Taking fourth place from 19, Russia lost only to India, China and Mexico. Relatively low costs for electricity and gas helped to achieve a high place in the ranking of the country.

By 2018, Russia should rise from 120 to 20 in the Doing business ranking, the newly elected President Vladimir Putin instructed the government immediately after the inauguration. The least effort in this "step-by-step" step will require the problem of reducing the cost of doing business. According to a KPMG study compiled on the basis of labor costs, insurance, communications, transportation costs, taxation and financing, Russia ranks fourth from 19 for the low cost of doing business.

As a base level, experts have taken the bar on spending on entrepreneurship in the United States. Compared with it, China and India were recognized as the most “profitable” countries, where due to low salaries, business costs were about 25% lower. Among the developed countries, the leaders were Great Britain and the Netherlands (where the costs of entrepreneurs were almost 5% less than in the USA). The most expensive business in Australia (where entrepreneurial initiative costs 3,7% more expensive) and Japan (by 9,4%). In Russia, the cost of doing business was 19,7% lower than in the United States. Among the fast-growing countries, Russia has become a leader in terms of attractiveness in terms of electricity and gas costs. The “bright spots" in the Russian economy were the IT market, where doing business is 39,4% cheaper than in the USA (the leader of the sector, China, by 45,4%), and the professional services sector (60,4% of the level of expenses in the USA).

On the other hand, experts note that the high cost of renting industrial and office premises is a sore spot for entrepreneurs. According to the first indicator, the country takes the first place, in the second - the second (after the UK).

The cost of doing business is not a decisive factor in deciding whether to start a business in a particular country, says Elena Khromova, BDO partner in Russia. According to company research, among the main problems that company executives call is usually the problem of personnel selection. In addition, business in Russia is adversely affected by high administrative costs and an unregulated tax system. “As a result, Russian enterprises open production in China and India, where business is cheaper,” she said.

For business, it is not the costs that are more important, but the payback and comfortable conditions, agrees FBK expert Igor Nikolaev. Russia against this background looks unattractive. “In the first quarter of this year alone, $ 35,1 billion flowed out of the country. Despite the growth of the economy, entrepreneurs are not satisfied with the conditions for doing business in Russia,” he says. About this writes RBC daily.