Doing Business in Russia

At our Women in Wealth Supper Club event last night, our guests listened with keen interest to some tips dispensed with great aplomb by RT TV presenter Martyn Andrews, who'd spent eight years in Moscow.

Russia has never been the easiest country to understand, he reminded the assembled guests. Winston Churchill described it as a "riddle, wrapped in a mystery inside and enigma" and today a lot of Western businessmen would still share his opinion.

One needs to bear in mind that investing in Russia remains a risky business, but high returns come from high risk investments and emerging markets often outperform those of the developed nations.
Russia rose by 30 positions in a new Doing Business ranking of the World Bank. If you think the ranking of 63rd position, behind Greece in 61st position, sounds bad, note that last year Russia came 92nd between Barbados and Serbia! So there has been progress.

And what are the golden rules to remember when doing buisness in Russia? For a start attitudes towards punctuality are relaxed. However, they'll expect Western counterparts to be on time for appointments while they themselves may be late in order to test the patience of the opposing party.

 Meetings may not follow a linear agenda and may be interrupted by phone calls, people coming in and going out.
When negotiating, Russians often take their time and will not rush to make a decision. They tend to avoid comrpomise, which they see as a weakness. Expect negotiations to be tough and occasionally theatrical. You might witness loss of temper, people leaving the room and threats to call off the deal. This is all part of the process of driving a hard bargain.Another tactic they may use is dragging out the negotiation process, hoping to take advantage of the impatience of the opposing party.

Agreements and deals are expected to be written and signed. At the end of the meetings, they may want to sign a "protokol", i.e. the minutes of the meeting.

In business, black market and bribes are still key component of commerce and rules are meant to be bent and circumvented as it was done during Soviet times.

But once their trust is gained and friendships formed, Russians are very hospitable and will entertain lavishly. When greeting a woman, a kiss on the cheek is customary - many women consider it unfeminine to shake hands when meeting.

And just remember don't kiss a woman on the forehead, this is reserved for funerals!