Doing Business in Russia

Country profile

The Russian Federation is extended on more than 17 million kilometers square, representing one-eighth of the Earth's inhabited land area, and it has a population of approx. 140 million inhabitants. Its citizens descend from more than 100 ethnic groups, 81.5% being Russians. The national language is Russian and the currency is Rouble. Russia extends on two continents, Europe and Asia, which became a whole called Eurasia. The state borders 14 different countries on the two continents: Poland, Lithuania, Norway, Finland, Latvia, Estonia, Belarus, Ukraine, Georgia, Azerbaijan, Kazakhstan, China, North Korea and Mongolia. The capital city is set in Moscow, the home of over 10 million people. Saint Petersburg and Novosibirsk are also important cities. Russia is a member of international institutions such as the UN Security Council, the G8, G20, Council of Europe and the OSCE. Russia is not part of NATO, but it has a partnership with the organization through the NATO-Russia Founding Act.

Statistics

The work force in Russia has been estimated to approx. 75 million people, but the unemployment rate is 6.5%, keeping growing from one month to another. However, Russian authorities are optimistic about this aspect by the end of the year. Life expectancy is much higher in Russian women.

The Gross Domestic Product in 2010 was 1.477 trillion dollars.

Services are the main source of profit in Russia, in a proportion of 58.1%, followed by the industry with 31.9%. Agriculture provides 10% of the profit. 

Main industries

Industries with important impact on Russia are oil, gas, timber, metals, machinery, chemicals and arable farming. Its most valuable natural resources are oil and natural gas. Primary industries in Moscow include the chemical, metallurgy, food, textile, furniture, energy production, software development and machinery. Saint Petersburg has an economy mostly based on tourism, but it also provides important revenues from oil and gas trade, shipbuilding, aerospace industry, radio and electronics, software and computers, tanks and other military equipment, mining, instrument manufacture, metallurgy, chemicals, pharmaceuticals, medical equipment, publishing and printing, food and catering.

Salaries

The average salary of a Russian employee is calculated around 550 EUR and depending on the field of work, it can reach 1,400 EUR. The minimum salary that one person can earn in a month in Russia is 127 EUR, considered to be the Minimum National Salary.

Main corporate taxes

Russian corporations are subject to a corporate tax of 20%. The tax has been reduced from 24% since 2008. 2% of the amount is paid to the central government as federal tax and the rest of 18% is payable to the regional government.

VAT in Russia has undergone significant changes since the modification of the Russian Tax Code as of January 2001. VAT is payable by all legal entities and individual entrepreneurs and in most cases its standard rate is 18%. Legal entities and entrepreneurs may be exempt from VAT contribution if their annual revenue is less than 1,000,000 RUR.

Russian companies pay a dividend tax on their income of 9% and non-resident companies pay 15%.

BridgeWest offers assistance for setting up a company in Russia, including virtual office and other related services.