Doing Business in Russia, Volume II

Doing Business in Russia
Doing Business in Russia

A Concise Guide
Volume II
Anatoly Zhuplev
Doing Business in Russia: A Concise Guide, Volume II

Copyright Business Expert Press, LLC, 2017.
All rights reserved. No part of this publication may be reproduced,
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First published in 2017 by
Business Expert Press, LLC
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ISBN-13: 978-1-63157-678-2 (paperback)
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Abstract
Russia is the worlds largest geographic area, major economy, and important power in the global political-economic landscape. Over the past
quarter century, following the landmark dissolution of the U.S.S.R.,
Russia has become a premier global marketplace despite remaining
enigmatic and challenging. The book strives to serve as a concise guide in

understanding Russia from an international business perspective.
You will learn about strategic issues, business drivers, pros, cons, costs,
and risks of international expansion. The coverage includes analytical
tools, practical applications, sources of information, and assistance in
international business research. These are followed by Russias macro-
economic profile, drivers, strategic strengths and weaknesses in the
comparative global context, including its international market attractiveness and primary opportunities for U.S. companies.
The book examines Russias main industries, their profiles, dynamics
and business attractiveness, consumer trends, and marketing strategies.
The discussion of Russias regions covers regional subdivisions and economic profiles with the focus on the city of Moscow commanding top
attractiveness from the domestic and international business perspective.
The book covers the drivers and trends of the Russian small business
sector and entrepreneurial business venturing.
Despite the onslaught of capitalism and globalization, Russia retains
its relationship-driven culture. The book provides insights in Russian culture by evaluating the determinants of Russian culture, its national profile
in major global cross-cultural studies, and practical cultural applications
in business, negotiations, and communications.
The books pedagogy includes critical information sources and skill
development exercises and cases on doing business in Russia.
Keywords
business, commerce, culture, entrepreneurship, industries, international,
Moscow, regions, Russia, strategy, trade
Contents
Acknowledgmentsix
Chapter 1 Russian Regions: Business Dynamics and Attractiveness1
Chapter 2 Small Business, Entrepreneurship, and Business
Venturingin Russia71
Chapter 3 Russian Business Culture115
Appendix I: Information Sources on Doing Business in Russia169
Appendix II: Skill Development Exercises and Cases on Doing
Business in Russia177
Index245
Acknowledgments
The author would like to acknowledge the help of all the people involved
in this project and, particularly, express appreciation to the colleagues at
Loyola Marymount University and Business Expert Press for their outstanding editorial support.
Anatoly Zhuplev
Loyola Marymount University, U.S.A.
CHAPTER 1
Russian Regions
Business Dynamics and Attractiveness
The best thing we can do if we want the Russians to let us be A
mericans
is to let the Russians be Russian.
George F. Kennan
US diplomat, historian, explorer, and war correspondent
US Ambassador to the Soviet Union,
May 14, 1952September19, 1952
Main Points in This Chapter

Russia: Regional subdivisions and economic profiles.
Business environment and investment climate in the City of
Moscow: Domestic and international perspective.
Regional analysis is an integral part of business research or a feasibility
study preceding the companys international strategic expansion to the
target country. Regional analysis is particularly important when it comes
to large countries characterized by multifaceted demographics and complex politico-economic landscape.
For example, Japan is one of the worlds major markets and most
ethnically homogenous countries.1 From the distance of New York or
Los Angeles, Japan may well seem just thata large and very homogenous marketplace. However, two of Japans major metropolitan districts
Ethnic Japanese comprise 98.5 percent of the nations total population of
127million people (Central Intelligence Agency 2016).
1
DOING BUSINESS IN RUSSIA
with the capitals of Tokyo and Osaka that are only 246 miles (396 km)
apart, are quite different in their market dynamics, business practices,
and strategic approaches. Variations in market dynamics require different
approaches to formulating a company marketing mix, the 4Ps ( Consumer
Lifestyles in Japan 2016). Such variations in the marketing mix are also
common in Belgium, a small, ethnically diverse European country with
a population of 11.3 million that is 58 percent Fleming, 31 percent
Walloon, and 11 percent mixed or other. Yet another example is Singapore, a small Asian country-city of just 5.7 million people. Despite its
small geographic size,2 Singapore is also ethnically diverse74 percent
Chinese, 13 percent Malay, 9 percent Indian, and 3 percent comprised
of other ethnic groups (Central Intelligence Agency 2016). In large but
ethnically homogenous countries such as Japan or small but demographically diverse countries such as Belgium and Singapore, there is an evident
need for differentiation in marketing strategies and business practices. For
a country as large and diverse as Russia, the needs for regional, ethnic,
demographic, and other regional variations in marketing strategies and
business approaches and practices tend to be even greater (Russia 2016;
Russia: Country Profile 2016).
Russias Regional Subdivisions and Economic Profiles

Russias current governing-administrative system and regional subdivisions have come a long way, originating from the nations complex geography, history, political economy, sociocultural, and military developments
(A Country Study: Russia 1998).
As of 2016, there were 85 federal administrative subjects that are
constituent members of the Russian Federation.3 Russias federal subjects
Singapores area is just 687 sq. km of land, slightly more than 3.5 times the size
of Washington, DC (Central Intelligence Agency 2016).
3
Two of these federal subjectsthe Republic of Crimea and the federal city of
Sevastopolare internationally recognized as part of Ukraine.
2
Russian Regions 3
Figure 1.1 Federal subjects of Russia
can be categorized into six types: 22 republics, 9 krais (large districts,

pluralA.Z.), 46 oblasts, 3 federal cities, 1 autonomous oblast, and 4
autonomous okrugs (districts, pluralA.Z.) (Russian Investment Agency
2016) (Figure 1.1).
Along with the federal subjects, Russian regional structure is comprised of 9 federal districts,4 12 economic regions5 (Figure 1.2), 4 m
ilitary
Each federal district is administered by a Presidential envoy. Federal districts

envoys serve as liaisons between the federal subjects and the federal government
and are primarily responsible for overseeing the compliance of the federal subjects
with the federal laws.
5
Economic regions and their parts sharing common economic trends are in turn
grouped into economic zones and macro zones.
4
1. Central economic region

2. Central Black Earth economic region
3. East Siberian economic region
4. Far Eastern economic region
5. Northern economic region
6. North Caucasus economic region
7. Northwestern economic region
8. Privolzhsky(Volga) economic region
9. Urals economic region
10. Volga-Vyatka economic region
11. West Siberian economic region
12. Kaliningrad economic region
Figure 1.2 Economic regions of Russia
districts,6 and a multitude of municipal divisions. Additionally, there are

29 special economic zones set up to facilitate foreign investment through
tax breaks, insurance privileges, relaxed customs regime, ready-to-use infrastructure, and other incentives (Special Economic Zones of the Russian
Each military district operates under the command of the district headquarters,
headed by the district commander, and is subordinated to the General Staff of the
Armed Forces of the Russian Federation.
6
Russian Regions 5
Federation 2011). Until recently, the regional governance and development on the federal level had been under the jurisdiction of the Ministry of Regional Development of Russia (
). In 2014,
the Ministry of Regional Development was abolished and its responsibilities redistributed across other ministries. The task of facilitating foreign
investments in Russia was assigned to the newly created federal Russian
Investment (Invest in Russia) Agency (
).7
As noted earlier, an international corporate business expansion to
Russia or any other country is typically driven by either export-based
international marketing or foreign direct investmentbased manufacturing (foreign portfolio investment is beyond the scope of discussion in
this book). Furthermore, international expansion can be predetermined
by the dynamics of the industry or a specific business venture project.
Depending on the nature of a contemplated expansion, comparative
National Investment Agency Invest in Russia was established in December
2013 under the auspices of the Ministry of Regional Development of the Russian
Federation and in cooperation with the World Association of Investment Agencies
(WAIPA). From May 1, 2014, the Agency operates under the new nameRussian
Investment Agency Invest in Russia. Its primary objectives are attracting foreign
investment in the Russian economy by facilitating foreign investors in entering
the Russian market and promoting investment opportunities and business image
of Russia by the efficient system of communication and interaction with the
international investment community. Working closely with regional investment
agencies, the Agency creates a platform for investor-region interaction at the
federal level as well as forms a unique center of information on all regions,
ongoing projects and investors interested in projects in the R
ussian Federation.
The main task of the Agency is to function as a single Customer Center, which
serves for foreign investors as a source of extensive information on the investment
potential of Russian regions, ongoing projects, new investment opportunities,
as well as a tool to create favorable conditions for foreign companies to enter
the Russian market. More information about the Agency and its functions and
services can be obtained at http://invest-rf.com.
7
attractiveness of Russian regions may vary widely in terms of their

business potential. Analytically and practically speaking, strategic potential of such an international expansion in its entirety can be translated
into specific components: business benefits/advantages, costs/disadvantages, and risks.
Table 1.1 presents key economic characteristics of the Russian economic regions and major federal subjects selected on the basis of their
largest economic contributiontheir regional sharein the national
gross domestic product (GDP). Table 1.1 reveals that the Central
Federal District, which includes the City of Moscow and Moscow Oblast
(Moscow Oblast is used interchangeably with Moscow region), is clearly
the national economic leader.
The Central Federal District, the most economically developed one,
compared to other administrative districts, accounted in 2015 for only
3.8 percent of the Russian territory, but was home to 26.6 percent of the
nations total population. In 2013, the Central Federal District controlled
32.1 percent of the total fixed capital formation and contributed 35.0
percent to the Russian GDP nationwide. In addition, the Central Federal
Districts share in the national manufacturing output reached 14.56 percent in extracting industries, 33.94 percent in manufacturing industries,
and 29.96 percent in generation and distribution of electric power, natural gas, and water.
The City of Moscow and Moscow Oblast combined accounted
for less than 1 percent of the countrys territory nationwide, but their
population was 13.2 percent of the national total. In stark contrast,
together they accounted for 26 percent of the national GDP, 23.6 percent of the fixed capital formation, 13.02 percent output in extracting
industries, 21.21 percent output in manufacturing, and a 17.7 percent
contribution to the national output in generation and distribution of
electric power, natural gas, and water. Additionally, the Moscow Oblast,
and, especially, the City of Moscow, enjoys a wide-margin comparative advantage in employee compensation. For example, in 2014 the
average nominal monthly monetary labor compensation in the City of
Moscow stood at 61,208 rubles compared to only 39,945 rubles in the
Central Federal District and even the lower amount of 32,495 rubles for
Russian Federation nationwide. In the Moscow Oblast, the 2014 average
0.4
Republic of Tatarstan
2.6
2.4
20.3
6.1
Privolzhsky (Volga) Federal District

0.8
6.7
Republic of Bashkorstan
3.7
1.0
9.6
2.5
0.4
3.5
0.01
City of St. Petersburg
South Federal District
Krasnodar Krai
9.5
9.8
Northwest Federal District
North Caucasus Federal District
8.3
4.9
0.3
3.8
0.01
100
Russian Federation
Central Federal District
City of Moscow
100
27.0
Area
Moscow Oblast
Population
as of Jan. 1,
2015
2.9
2.3
16.0
2.4
3.0
6.5
4.6
10.3
21.5
4.5
35.0
100
2.4
1.4
14.1
2.4
2.9
6.4
3.3
10.9
19.5
4.1
32.1
100
Fixed capital
formation
(actual book
Regional
value at
GDP, 2013 years end)
100
Extraction
3.59
1.64
14.32
0.21
0.21
1.88
0.14
6.03
12.92
0.10
14.56
100
Manufacturing
3.93
2.97
20.98
1.08
2.20
6.10
6.94
14.16
15.34
5.87
33.94
(Continued)
2.67
2.33
18.43
2.47
2.06
6.26
3.79
12.02
12.19
5.51
29.96
100
Generation
and
distribution of
electric power,
natural gas
and water
Regional output by extracting and

manufacturing industries
Table 1.1 Russias economic regions and federal subjects* with the greatest regional GDP, percent

Russian Regions 7
10.6
1.1
Sverdlovsk Oblast
13.2
30.0
2.0
4.2
13.8
36.1
5.4
2.3
10.2
1.6
2.5
5.2
2.9
14.1
6.3
1.7
9.0
1.1
5.4
6.5
3.2
18.3
13.55
3.10
12.75
1.27
11.15
23.36
0.51
36.66
Extraction
1.71
2.58
10.39
1.76
0.52
1.32
4.46
11.64
Note: *Included in the table are selected federal subjects of Russia with their regional share in the national GDP equal or higher that 2 percent.
Source: . - (2015).
Far East Federal District
Krasnoyarsk Krai
Siberian Federal District
1.0
0.9
Tyumen Oblast without the autonomous

okrugs
0.4
4.5
Yamalo-Nenets Autonomous Okrug
1.1
3.1
Khanty-Mansi Autonomous Okrug-Yugra
Tyumen Oblast. Including:
8.4
Area
Ural Federal District

3.0
Population
as of Jan. 1,
2015
Fixed capital
formation
(actual book
Regional
value at
GDP, 2013 years end)
Manufacturing
Regional output by extracting and

manufacturing industries
Table 1.1 Russias economic regions and federal subjects* with the greatest regional GDP, percent (Continued)
5.60
2.85
12.19
0.92
1.06
4.39
3.63
12.67
Generation
and
distribution of
electric power,
natural gas
and water
8
Russian Regions 9
monetary compensation stood at 38,598 rubles or 63 percent of the City

of Moscow level and 119 percent of the Russian Federation overall level
( 2015).
Higher salaries tend to translate into a greater regional purchasing
power and boost Moscows potential attractiveness as a marketplace.
Moscows higher salaries, sophisticated lifestyles, and better quality of life
also tend to attract qualified workforce, thus providing favorable opportunities for foreign companies looking to recruit local talent in starting or
running their business operations in Russia.
According to the 2016 World Investment Report (UNCTAD 2016),
in 2015 Russia received 9.8 billion USD in foreign direct investment
inflows, a sharp drop compared to 29.2 billion USD in 2014.8 In 2014,
the Central Federal District registered 12.5 billion USD or 55 percent
of the total inflows of foreign direct investments in Russia. Out of the
Central Federal Districts 12.5 billion USD total, the City of Moscow in
2014 attracted 11 billion USD or 16 percent of the total foreign direct
investment inflows in Russia. The Central Federal District and Moscows role as the nations leading business hub and marketplace is also
evident from Table 1.2 containing Russias international trade statistics:
In 2014, the Central Federal District accounted for 51 percent of all
Russian national exports and 61 percent of imports. Moscow alone, as
part of the Central Federal District, accounted for a stunning 46 percent of the R
ussian national exports and 49 percent of imports (
2015).
On the opposite end of the Russian regional economic spectrum
are federal entities such as South Federal District, North Caucasus Federal District, Privolzhsky (Volga) Federal District, and Siberian Federal
District (their shares of contribution to the national GDP are notably
lower relative to their population size). Not surprisingly, these districts
lag behind in attracting foreign direct investment, with the exception of
the Privolzhsky (Volga) Federal District (in 2014 it received 1.2 billion
In addition to the foreign direct investment inflows, as of 2014 Russias
total foreign portfolio investment assets stood at 56.6 billion USD, including
3.7billion USD in equity securities and 57.9 billion USD in total debt securities
(U.S. Department of State 2016).
8
6,865
69,846
9,004
56,894
Sverdlovsk Oblast
Tyumen Oblast. Including:
1,809
3,073
2,968
18,896
1,008
Ural Federal District
10,345
1,421
12,967
937
Republic of Bashkorstan
Privolzhsky (Volga) Federal District
North Caucasus Federal District

53,705
8,628
17,159
South Federal District

4,356
35,249
19,330
City of St. Petersburg

8,741
56,013
49,000
Northwest Federal District
Krasnodar Krai
118,531
182,416
City of Moscow
30,776
167,740
3,101
199,703
Moscow Oblast
Central Federal District
4,995
1,725
9,012
3,262
2,764
15,501
356
1,069
3,507
4,053
6,571
29,071
2,473
37,955
614
940
3,571
649
372
3,415
596
585
3,213
1,105
1,750
14,214
1,898
25,342
44,941
272,323
445,478
79,258
Imports Exports Imports
Exports
With NIS**
countries
Russian Federation
With the countries

of far abroad*
2012
Table 1.2 Russias top exporting and importing regions, millions of US dollars
22,281
6,478
31,943
16,595
12,439
52,848
797
9,641
17,177
19,592
51,082
205,016
2,569
221,053
433,850
Exports
1,948
2,933
6,552
3,601
932
14,508
1,598
4,704
8,624
29,309
51,939
114,830
22,991
154,218
253,864
Imports
1,357
2,050
5,793
1,511
1,416
10,880
489
559
3,038
2,735
4,669
25,426
3,173
34,299
63,984
Exports
129
773
2,132
607
255
3,132
479
585
2,424
1,561
2,592
10,808
2,323
19,600
32,806
Imports
With the countries of

far abroad
With NIS countries
2014
10
8,129
31,274
1,694
10,487
8,037
25,688
270
279
4,239
3,082
30
1,883
61
265
2,370
501
70
43
28,483
7,266
30,373
2,358
507
19,416
10,436
1,038
5,848
552
157
1,238
198
466
4,597
294
0.5
1,062
217
442
2,225
34
52
44
Notes: *The unofficial term far abroad ( ) was coined after the abolition of the U.S.S.R. in the early 1990s. It signifies the nations not included in the Newly
Independent States. Despite geography, the far abroad category also incorporates countries having common border with RussiaFinland, Norway, Poland, Mongolia, PRC
(mainland China), North Korea, and sometimes the Baltic countries (Latvia, Lithuania, and Estonia).
** NIS stands for Newly Independent States.
Source: . (2015).
Far East Federal District
Krasnoyarsk Krai
Siberian Federal District
452
Tyumen Oblast without the autonomous okrugs
360
3,044
31,736
Yamalo-Nenets Autonomous Okrug
997
22,114
Khanty-Mansi Autonomous Okrug-Yugra

Russian Regions 11
12
USD of foreign direct investment inflows), each of the federal districts in

the laggard group attracted less than one billion dollars in foreign direct
investments and generated substantially lower amount of international
trade in contrast to the Central Federal District and the City of Moscow
( 2015).
As mentioned earlier, the recent creation of the new federal Russian
Investment Agency Invest in Russia was intended to facilitate incoming foreign investments. Given Russias large economic size, complexity, and substantial discrepancies characterizing its 85 federal subjects,
each of them possessing varying potential for investment and economic
development, now almost every region has its own local affiliate agency
charged with attracting investments (regional investment agencies can be
accessed through the Invest in Russia [2016] entry point). Prior to the
establishment of the Agency there was no single framework integrating
all regional development corporations across Russia. The Agency became
a federal-level platform for the investorsregions cooperation and a tool
to provide support for foreign companies in entering the Russian market.
The main task of the Agency is to function as a single customer center, which serves for foreign investors as a source of relevant information
about the investment potential of the Russian regions, ongoing projects,
success stories, new investment opportunities.
Russian Investment Agency (2016) performs the following key functions: Developing recommendations for improving investment climate
in the Russian Federation and providing these recommendations to the
President and the Government of the Russian Federation, as well as other
parties; building relations with foreign investment agencies and public
associations of investors; provide foreign investors with reliable information about the advantages and opportunities of the Russian Federation, informing about possible problems and helping to minimize risks;
organizing meetings of foreign investors with Russian government agencies authorities and business community; supporting foreign investors,
including by resolution of arising difficulties with licensing and supervising authorities; facilitating interaction with subjects of the Russian
Russian Regions 13
Federation, cities, and districts on attracting investments and implementation of investment projects.
To perform these functions, the Agency and its regional affiliates
provide information and assistance that can become a starting point in
foreign companys strategic analysis and decision. More specifically, an
initial step in the regional investigation of Russia can be accomplished by
using the Agencys analytical tool that enables the user to compile comparative profiles for multiple (up to four) Russian regions with analytical
data downloadable in PDF or Excel format. Additionally, the Invest in
Russia portal houses business reports prepared by reputable global consultancies designated for the national economy at large as well as specific
priority sectors and industries in which Russia has investment potential.
They include: Pharmaceutical and Medical Industry, Real Estate, Innovations and Technology, Infrastructure, Aluminum, Iron and Steel, Lead,
Platinum-group metals, Precious metals, Nickel, Copper, Zink, Coal,
Telecommunications, Transportation, Agriculture and Food, Gas, Hotel,
and Entertainment (Russian Investment Agency 2016).
As an example, Table 1.3 presents comparative investment profiles for
Russias four leading regional entities: the City of Moscow, the City of St.
Petersburg, the surrounding Moscow region, and the Leningrad region.9
In the following section of this chapter we focus on examining the
business environment and investment potential of the City of Moscow,
Russias economic leader.
The selection of a business location within a country as large and
diverse as Russia, whether as a target destination in international marketing or a foreign manufacturing site, is a complex task that involves
multiple dimensions, analytical and decision-making criteria, and steps.
In 1914, during WWI, the name of the city was changed from Saint Petersburg
to Petrograd (), in 1924 to Leningrad (), and in 1991,
back to Saint Petersburg. Currently, the Greater St. Petersburg area is comprised
of two administrative-economic entities: the city of St. Petersburg and Leningrad
Oblast/region named after Vladimir Lenin that retains its name to date.
9
14
Table 1.3 Investment profiles: City of Moscow, City of St. Petersburg,

Moscow region, and Leningrad region, 2015*
Moscow
St. Petersburg
Moscow
region
Leningrad
region
Key macroeconomic indicators

GRP**, RUB billion
(2014)
8,248
1,431
1,646
383
GRP dynamics, percent versus previous

year (2014)
123
109
127
105
Equity investments
per capita, RUB
thousand
131.4
100.03
88.02
112.36
Registered unemployment rate, percent of economically

active population
(as at the end of the
periodbased on
the 2010 Russian
Census results)
4.49
1.30
3.00
0.509
Foreign direct investments, USD million
64,667
7,504
8,067
3,423
Region population
size, thousand people
12,198
5,192
7,231
1,776
Regional center
population size,
thousand people
12,198
5,192
12,198
5,192
Shortest highway distance to the nearest

border c rossing,km
440
163
480
n/a
Shortest highway
distance to the
nearest sea port, km
720
0 km
710
14
Highway distance
from regional center
to the nearest million-plus population
city, km/population
size in m
illion-plus
population city,
million people
0/12.11
0 km,
St.Petersburg,
5mln people
12/12.11
0/5.0
Geography
Russian Regions 15
Moscow
St. Petersburg
Moscow
region
Leningrad
region
Transportation and energy infrastructure

Number of international airports
n/a
Railway freight
transportation, MT
4.20
6.00
10.60
26.80
4,971.10
2,468.70
5,328.60
1,300.10
75.6
77.3
75.6
101
Motor transport
freight turnover,
MT/km
Electricity generation/consumption,
% (2014)
Domestic market size

Income per capita,
RUB thousand
59.50
38.60
40.10
24.00
Retail sales turnover,

RUB bn
4,474.50
1,057.60
1,724.70
304.50
Products shipped
in manufacturing
sector, RUB million
3,731,063.00
2,123,814.00
1,892,723.00
772,574.00
Labor market
Average monthly
salary, RUB thousand
Economically active
population, thousand people
62.50
43.50
40.20
33.10
7,140.20
2,968.20
3,911.00
959.10
Human capital
Number of students
per 10,000 people
(at the last reporting
date) (2014)
1,164
956
248
107
Mortality of working
age (per 100,000
people of working
age3-year average)
(2014)
415.5
514.4
686.5
693
(Continued)
16
Table 1.3 Investment profiles: City of Moscow, City of St. Petersburg,

Moscow region, and Leningrad region, 2015* (Continued)
Migration balance
(3-year average) per
thousand people
(2014)
Moscow
St. Petersburg
Moscow
region
Leningrad
region
98.97
154.79
149.43
123
Source: Invest in Russia (2016) www.investinrussia.ru/compare-four-regions?year=2015&region1

=41&region2=58&region3=42&region4=36
Note: *Some comparative data for the four regions on the latest 2015 Invest in Russia web portal
are marked as unavailable. For this reason we included the 2014 numbers instead of the missing
data for 2015.
**Signifies gross regional product.
For the sake of argument, we will be following a generalized framework

used by the Moscow City Investment Agency (2016). The framework
presented in their investment portal (http://en.investmoscow.ru) in six
languages is informative, reasonably up-to-date and dynamic in style. It
includes two main sections: Investment in Moscow and Guide for
Investor. Their intended purpose, respectively, is to highlight strategic advantages/benefits of investing or conducting business in Moscow
and provide a potential investor/business operator with orientation on
starting and running business. The framework also includes important
information about the citys social and business infrastructure, lifestyle,
current business projects, future developments, and contact information
in the City of Moscow.
The Investment in Moscow portal discusses factors shaping the
business environment and investment climate and includes the City of
Moscows Investment Strategy up to 2025 (2016). It contains profiles,
trends, and dynamics for selected industries and key development issues:
healthcare, education, transport infrastructure, high-tech, tourism and
urban environment, and modernization of old industries. This section
is also supplemented with the company success stories, special analytical reports, and investor support information from the Moscow city
government.
The Guide for Investor section contains information about starting a business, covers in detail the issues of special zones, small and
medium business, personnel, transportation, construction and real estate,
Russian Regions 17
engineering networks, investment protection, trade and services, and

investment support.
Business Environment and Investment Climate in the

City of Moscow Domestic and International Perspective
The Moscow city investment portal hosts extensive business information and offers support. Wikipedia also provides useful coverage containing comprehensive background information and extensive references
(Moscow 2016).
Investment Climate Factors
Investment Opportunities
From a commercial standpoint, Moscow10 is the largest consumer market
in Russia and Europe (Figures 1.3 to 1.8). Its 12 million strong population, together with the surrounding regional agglomeration, reaches
about 16.6 million people, and constitutes 11 percent of the total R
ussian
population, which is #15 in the world by population size of urban
Moscow () is the capital and the largest city of Russia with 12.2
million residents within the city limits and 16.8 million within the urban area. It
is the capital of the Central Federal District and Moscow Oblast, together with
the second one constituting the Moscow metropolitan area, totaling a population
of 19.4 million residents. Moscow is a major political, economic, cultural, and
scientific center in Russia, as well as the largest city on the European continent.
In broader definitions Moscow is among worlds largest cities, being the 13th
largest metro area, the 17th largest agglomeration, the 16th largest urban area,
and the 9th largest within city limits worldwide. According to Forbes (2013),
Moscow has been ranked as the 9th most expensive city in the world by Mercer
and is one of the worlds largest urban economies, being ranked as an alpha global
city according to the Globalization and World Cities Research Network and is
also one of the fastest growing tourist destinations in the world according to the
MasterCard Global Destination Cities Index. Moscow is the northernmost and
coldest megacity and metropolis on Earth. By its territorial expansion on July 1,
2012 southwest into the Moscow Oblast, the capital increased its area 2.5 times;
from about 1,000 sq. km. (390 sq mi) up to 2,511 sq. km. (970 sq mi), and
gained an additional population of 233,000 people.
10
18

Essen-Dusseldorf
6.7
Hong Kong
7.3
London
10.4
Paris
10.9
Istanbul
13.5
Moscow
16.6
Sao Paulo
20.6
New York
20.7
22.7
Shanghai
23.6
Seoul-Incheon
Tokyo-Yokohama
37.8
0
10
20
30
40
Million people
Figure 1.3 Population of worlds urban agglomerations

Source: Demographia World Urban Areas (2015).
Moscow
Moscow region
16%
Other regions
6%
78%
Figure 1.4 Geographic structure of Russias retail trade turnover

Source: Moscow Investment Strategy up to 2025 (2016).
agglomerations. Being home to a sizeable population, Moscow also enjoys

high purchasing power, accounting for 16 percent of the Russian retail
turnover. The city is characterized by a relatively high level of household
income; in 2014 the average salary in Moscow reached 971 USD (1,800
USD in 2013),11 twice as much compared to 493 USD nationwide. In
In 2014 the Russian rubles exchange rate against the U.S. dollar drastically
plunged.
11
Russian Regions 19
1,200
971
900
USD*
650
600
493
300
Russia
Saint Petersburg
Moscow
Figure 1.5 Average per capita income, 2014, USD*/month

Source: Rosstat (Russian Federal State Statistical Service).
Note: *According to average US dollar exchange rates from the Bank of Russia.
international comparisons of consumer spending Moscow (169 billon

USD) outperforms many leading global cities acceding only to London
and Paris. Additional assurance for retail operations in Moscow can be
derived from a relatively low level of the loan debt burden of population
compared to St. Petersburg and Russia as a whole.
Investment Opportunities
The City of Moscow is the leading economic region driving Russian
national growth (Figures 1.9 to 1.12). In 2014, the City of Moscows gross
regional product (GRP) reached nearly 13 trillion rubles, or 383billion
USD. In terms of cross regional domestic comparisons, Moscows GRP
per capita in 2012 reached 27,303 USD, more than double the average
Russian rate. Internationally, Moscow also fares strong being among the
worlds 10 largest urban conglomerates in regard to its purchasing capacity. Moscows per capita GRP is higher compared to Seoul and Shanghai,
although lower than that of some large conglomerates of Europe and the
United States.
The structure of Moscows GRP is close to the economic structure of
large metropolitan areas. The largest investment in the citys GRP is from
20

8...
In rubles
In foreign currency and precious metals
337
Thousand roubles
6...
304
248
160
135
4...
121
351
105
2...
300
262
370
326
370
208
2010
2011
2012
2013
Year
2014
2015
1KB 2016
Figure 1.6 Volume of individuals deposits per capita as of January 1,

thousands RUB
Source: Bank of Russia, calculations by Moscow City Investment Agency.
Money expenditure, RUB trln
Growth % against the previous year
24
RUB trln
+10%
+10.7%
+5.1%
12
+10.9%
+11.5%
7.2
2011
2012
8.9
9.3
2013
2014
10.4
2015
Figure 1.7 Money spent by the population in the City of Moscow,

trillion RUB
Source: Mosgorstat.
the trade sector (31.3 percent of the GRP) as well as activities that provide business and financial services, working with real estate and scientific
research and development (21.2 percent of the GRP). The manufacturing
industry accounts for 18.6 percent of the gross value added (including
machine manufacturing, which is 14.9 percent).
Russian Regions 21
60
46,5
45
28,6
30
14,7
15
0
Saint Petersburg
Russia
Moscow
Figure 1.8 The ratio of outstanding loans to the volume of individual

deposits
Source: Bank of Russia, calculations by Moscow City Investment Agency.
bn rubles
In % compared to 2010 (in comparable prices)

125
bn rubles
12,000
8,000
8 376
100
9 949
102.8
10 667
105.9
11 815
106.9
12 809
107
105
4,000
115
95
2010
2011
2012
Year
2013
2014
In % compared to 2010
16,000
85
Figure 1.9 Moscows gross regional product

Source: Rosstat, Department of Economic Policy and Development of Moscow, calculations by
Moscow City Investment Agency.
Economic-Geographical Position
Moscow is located in the heart of the most developed and diversified
region of the European part of the vast Russian land (Figures 1.13
to1.14), still far away from major global commercial destinations. The
flight time to some global financial centers (New York, Hong Kong, and
Singapore) is within 10 hours, and European financial centers (London,
Zurich, Frankfurt on the Main) can be reached by plane within 4 hours.
22

Kaluga region
8 355
Krasnodar Krai
8 551
Moscow region
9 758
Leningrad region
10 451
11 256
Krasnoyarsk Krai
12 910
St. Petersburg
13 310
Tyumen region**
13 522
Moscow
27 303
0
7,500
15,000
30,000
22,500
USD
Figure 1.10 GRP per capita in Russian regions*

Source: Rosstat, calculations by Moscow City Investment Agency.
Notes: *According to the average annual dollar exchange rate, the Bank of Russia.
** excluding Khanty-Mansiysk and Yamal-Nenetsk regions.
Sao Paulo
20 650
Shanghai
24 065
Istanbul
24 867
Seoul-Incheon
34 355
Kln-Dsseldorf
41 763
Moscow
45 803
London
57 157
Paris
57 241
Hong Kong
57 244
Singapore
66 864
New York
New York
0
20,000
40,000
USD
69 915
60,000
80,000
Figure 1.11 GRP per capita metropolitan areas in the world

Source: Brookings Institution (2015).
Moscow is located at an approximately equal distance from large markets

of Eastern Europe, CIS countries, and the Baltics. Travel time via public
highways to the seaports of the Baltic and Black Seas, to regional centers
Russian Regions 23
Wholesale and retail trade
Business services, working
with real estate, R&D, IT
Manufacturing
Social sphere and state
management
Transport and connections
Construction
Other
4.4%
7.9%
35.4%
10.8%
18.7%
19.8%
Figure 1.12 Moscow GRP by economic sectors

12
Flight time, hours
10
10.5
9
9
6
4
3.5
3.5
Zurich
Frankfurt am
Maine
3
0
London
New York Hong Kong Singapore
Figure 1.13 Flight time from Moscow to global cities
of the European part of Russia and the Volga region, and to the cities of
Belarus and Ukraine is within 24 hours.
Business Activity
As the nations political-economic, cultural, and educational center, and
business hub, the City of Moscow is characterized by high density of
global companies, media, Russian federal government agencies and
regional representative agencies, and diplomatic and trade representatives
24
Archangelsk
17
Murmansk
23.5
St. Petersburg
Riga
10
Minsk
9
14
Rostov-on-Don
Novorossiysk
19
Astrakhan
18
Samara
12
Kazan
10
0
12
Journey time, hours
18
24
Figure 1.14 Domestic road travel time* from Moscow

Source: Avtodispetcher Cargo Transportation Portal.
Notes: *Fastest route (excluding traffic).
located in the city (Figure 1.15). Many of the largest international companies have their offices in Moscow. On this indicator, Moscow is one of
the top 10 business hubs in the world, outperforming Beijing, Dubai,
Madrid, Paris, and New York.
As Russias top business and financial center, Moscow is home to
about 1.3 million enterprises and organizations (about 25 percent of the
total number of all the companies registered in Russia). Over the past five
years, the number of enterprises and organizations operating in Moscow
has increased by 20 percent. Moscow accounts for about half of the operating banks and credit organizations in Russia. Banks headquartered in
Moscow account for 80 percent share of the total bank assets in Russia.
Investment Activity
In 2015, Moscow registered around 1.5 trillion rubles (38.3 billion USD)
of investment stock in fixed assets, or 10.9 percent of the total volume of
investments in fixed assets in Russia (Figures 1.16, 1.17, and 1.18). Over
70 percent of investments came from nonbudget (private) sources. Over
Russian Regions 25
Warsaw
New York
Paris
Dubai
Madrid
Beijing
Moscow
Shanghai
London
Tokyo
Singapore
Hong Kong
53.6
55.4
55.7
56.1
59.6
60.4
60.7
61.4
63.2
63.9
67.5
68.2
50
55
60
65
70
International companies, %
Figure 1.15 Presence of largest international companies in cities

worldwide
Source: CBRE, Global office location.
Notes: According to research results from 290 international companies.
100
4,0%
15,3%
5,1%
9,4%
10,1%
75
7,0%
35,1%
37,8%
Manufacturing
Manufacturing and distributing
of electrical energy, gas, and
water
Wholesale and retail trade,
repairs
Transport and connections
Financial activity
Using real estate, renting, and
business activities
Other types of activity
50
9,6%
25
16,1%
5,9%
19,5%
12,9%
12,2%
2011
2015
Figure 1.16 Investment structure in fixed capital* by type of business

activity, percent
Source: Mosgorstat.
Note: *Large and medium-sized businesses.

RUB bn
2,000
% for 2010 (comparable prices)
400
1 612
1 542
1 413
1,500
300
RUB bn
1 220
1,000
500
856
733
141.9
161.3
158.8
152
200
106.6
100
100
2010
2011
2012
2013
2014
2015
% for 2010 (comparable prices)
26
Year
Figure 1.17 Investments in fixed capital in Moscow billions RUB,

percent of 2010 (comparable prices)
60
45
44
45
USD bn
35
36
36
30
30
19
15
0
13
21
22
23
26
26
17
19
16
17
14
16
17
I Q II Q III Q IV Q I Q II Q III Q IV Q I Q II Q III Q IV Q I Q II Q III Q IV Q I Q II Q III Q IV Q

2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015
2011 2011 2011
Figure 1.18 Net inflows of foreign direct investments to Moscow,

billions USD
Source: Bank of Russia (according to balance of payments data from the Russian Federation).
the past four years, investments in fixed assets in comparable prices grew
by 52.2 percent at the 2010 comparable prices. In Q4 of 2015, Moscow
attracted 17 billion USD in foreign direct investment inflows outstripping
by wide margin other Russian regions in the incoming flows of foreign
direct investment on a per capita basis. In 2013 this indicator in Moscow
reached 855 USD in foreign direct investment per capita compared to 668
Russian Regions 27
USD in the Kaluga region, 570 USD in the Primorsky Krai, 517 USD in
the Leningrad region, and 245 USD in the Moscow Oblast/region.
Conditions for Investment
Labor Force
Moscow is one of the worlds largest cities in terms of the size of its economically active population and availability of skilled labor. It is also the
leader among Russian regions nationwide (Figures 1.19 to 1.22).
The size of the economically active population pool in Moscow is over
7 million and it is experiencing an upward trend. Moscows population is
characterized as having a high level of education: on average, 815 out of
1,000 residents, age 15 years and older have professional education; 42
percent of the residents have higher and postgraduate education. According to the Cities of Opportunity2012 study by Pricewaterhouse
Coopers, a global consultancy, Moscow ranks #5 among the worlds
largest cities in terms of the share of residents with higher education.
Moscows unemployment rate of 1.5 percent (compared to 5.5 percent nationwide in 2015) is lower than it is in many other metropolitan
cities around the world. Moscow also has a comparative advantage in
labor costs over major cities worldwide (a drastic downward trend in the
USD/RUB exchange rate in 20142016 has partially contributed to the
decline of labor cost in Russia in dollar terms).
7.5
7.09
Mln. people
7.0
6.8
6.88
6.64
6.5
6.44
6.0
5.5
2010
2011
2012
Year
2013
2014
Figure 1.19 Economically active population in Moscow

Source: Rosstat (Russian Federal State Statistics Service).
28
18.1%
Istanbul
27.7%
Hong Kong
28.0%
Vienna
Berlin
37.0%
New York
37.2%
Prague
37.5%
41.4%
Paris
42.1%
Moscow
44.4%
Stockholm
52.1%
San Francisco
52.9%
London
0
15
30
45
60
Figure 1.20 Adult population with higher education in cities around

the world, 2013, percent
Sources: Rosstat, Eurostat, the Government of the Hong Kong SAR, U.S. Census Bureau, the City
University of New York.
1.5%
Moscow
3.3%
Hong Kong
Seoul
4.2%
Warsaw
4.3%
Shanghai
4.4%
Sao Paulo
5.3%
New York
6.1%
London
6.6%
Berlin
8.3%
8.9%
Paris
Istanbul
11.6%
0
12
Figure 1.21 Unemployment in cities around the world, 2014, percent

Sources: Euromonitor International, the Government of the Hong Kong SAR, Mosgorstat.
Russian Regions 29
6.2
Moscow*
6.9
Sao Paulo
Shanghai
7.8
Warsaw
8.6
Prague
8.8
Tel Aviv
19
Paris
21.8
Berlin
25.9
London
26.2
32.9
New York
0
10
20
30
40
USD/hour
Figure 1.22 Average hourly labor rates in cities around the world
Source: Euromonitor International, Rosstat, Moscow City Investment Agency calculations.
Notes: *Average monthly salary according to Rosstat in 2014 at the USD exchange rate of the
Bank of Russia on January 1, 2015 (based on 22 working days a month and an 8-hour working day).
Economic and Financial Stability

Over the years, the City of Moscows finances have been characterized by
balanced budgets, stable growth, sustainable spending patterns, and low
level of public debt12 (Figures 1.23 and 1.24). Moscows budget deficit
for the past three years has not exceeded 0.5 percent of the GRP. In terms
Russias historic post-Soviet macroeconomic performance on the national

level has been susceptible to booms and busts. Economic busts and downturns
have happened in the early 1990s (resulted from the demise of the U.S.S.R. and
sharp drop in global oil prices), 1998, 20082009, and 20132014 (the current
unfolding downturn caused by fundamental political-economic factors is exacerbated by sharp drop in global oil and gas prices, Russias annexation of Crimea,
military-political confrontation with Ukraine, and resulting Western sanctions).
Moscow as a vital part of Russia experiences consequences of the nationwide
trends. Therefore its pattern of financial-budgetary stability should be interpreted
in relative terms.
12
30

Incomes, RUB bn
Expenditures, RUB bn
Proficit/defict, % of GRP*
Public debt, % of GRP*
2,000
3,6
2,4
0,2
1,8
1,5
1,3
0,4
0,4
0,4
0,8
1,750
1,1
1665
1480
1,500
1529
1546
1521
1482
1,5
1399
1,250
% GRP*
RUB bn
1601
1535
1488
10
1126
1106
1,000
2010
2011
2012
2013
2014
2015
15
Year
Figure 1.23 Moscow budget indicators 20102014

Source: Open book of Moscow, Department of Economic Policy and Development of the City of
Moscow.
Note: *2014, estimate.
160
132
% of GRP
120
104.7
80
40
40
11.7
0
Dubai
Singapore
Shanghai
New York
5.8
1.1
Hong Kong
Moscow
Figure 1.24 Debt in cities around the world

Source: Moscow Finance Department, IMF, NYC Office of the Comptroller, Shanghai Audit
Bureau, Singapore Department of Statistics, Moscow City Investment Agency calculations.
of the low budget deficit, Moscow outperforms the cities of Hong Kong
(5.8-percent budget deficit), New York (11.7-percent budget deficit),
Shanghai, Singapore, and Dubai. For the past four years Moscows ratio
Russian Regions 31
of public debt to GRP has been reduced in 2.5 times, from 3.6 percent of
GRP in 2010 to 1.4 percent of GRP in 2014. In contrast, the public debt
to GRP ratio in the cities of Shanghai and Dubai reached 40 percent and
56 percent accordingly. This is reflected in Moscows strong international
macroeconomic environment rating (according to the Economist Intelligence Unit, Moscow in this rating is ahead of such big cities worldwide as
New York, Istanbul, and London).
The 2014 balanced financial results of large-scale and medium-sized
organizations in Moscow amounted to RUB 1.46 trillion (USD 37.7 billion at the average annual USD exchange rate of the Bank of Russia).
About 76.2 percent of Moscows profitable organizations account for
25percent of the aggregate profit of enterprises in Russia.
Taxation of Legal Entities
In contrast to some major global cities, the City of Moscow levies a rather
moderate tax burden on corporations. The corporate (legal entities) profit
tax rate in Moscow is 20 percent, which is lower than London (21 percent), Shanghai (25 percent), and Paris (33.3 percent). The standard value
added tax rate in Russia is 18 percent, which is less than in most European Union countries. For instance, the standard value added tax rate
in Germany is 19 percent, in the United Kingdom20 percent, and in
Italy22 percent (Figures 1.25 and 1.26).
Additionally, Moscow laws and regulations provide special tax benefits to the entities engaged in investment activities. For example, under
certain conditions a reduced 13.5 percent rate of corporate profit tax payable to the budget of Moscow applies to legal entities that manufacture
cars within Moscow, are residents of science parks, technology parks, and
industrial parks, and are residents of the special economic zone for technical innovation such as Zelenograd.13 Tax exemptions are provided to residents of the special economic zone of Zelenograd for vehicles registered
Additional specifics can be obtained from the Moscow City Investment
Agency as well as KPMGs Doing Business in Russia. Your Roadmap to Successful Investments (2015) and Baker & McKenzies Doing Business in Russia
(2015) reports.
13
32
Sao Paulo
15
Berlin
15.8
17
Singapore
Prague
19
Moscow
20
Istanbul
20
21
London
Stockholm
22
Shanghai
25
Tel-Aviv
26.5
33.3
Paris
0
10
20
Tax rate, %
30
40
Figure 1.25 Corporate profit tax rates in cities around the world
Source: Moscow City Investment Agency.
18
Russia
Germany
19
Cyprus
19
United Kingdom
20
France
20
22
Italy
24
Finland
15
18
21
24
27
Tax rate, %
Figure 1.26 Standard value added tax (VAT) rates by country

Source: National sources.
in their name. This tax benefit is granted for a five-year term, effective
from the month of vehicle registration. Under certain conditions, corporate property tax exemptions are provided to the residents of science
parks, technology parks, or industrial parks, management companies of
Russian Regions 33
science parks or technology parks, and entities manufacturing cars within

Moscow. There are also land tax exemptions and investment tax credits
applicable to entities investing in Moscow, provided that the investing
entity meets regulatory compliance requirements.
Access to Real Estate
Figures 1.27 to 1.30 profile the dynamics of commercial real estate in
the City of Moscow. As of April 1, 2015, there was a total of 34.1 million sq. m. (367 million sq. ft.14) of high-quality commercial space in
Moscow. In 2014, investment in Moscow commercial real estate alone
exceeded USD 3 billion. As of April 1, 2015, the aggregate volume of
high-quality office space in Moscow had risen to 14.9 million sq. m.
(including 3.5million sq. m. of class A office space), with a vacancy rate
for the segment as a whole of 19.6 percent. The average office rental in
USD terms had dropped year-on-year by 2535 percent to USD 530
per sq. m. a year for class A and to USD 309 for class B offices. In Ruble
terms, rentals amount to RUB 27, 093 per sq. m. a year (USD 470 at the
Bank of Russia exchange rate on April 1, 2015) for class and RUB 16,
40
Office
Warehousing
Trade
32.89
mln sq.m.
30
28.74
26.19
6.56
20
10
7.16
34.13
8.98
9.58
9.15
9.7
14.76
14.85
7.48
7.93
12.46
13.33
2012
2013
2014
2015
Year
Figure 1.27 Availability of the quality commercial space in Moscow

Source: Knight Frank Research.
1 sq. m. = 10.76 sq. ft.
14
34
150
Entertainment centre (2 0005 000 sq.m.)
100250
Entertainment centre (1001 500 sq.m.)
150350
Childrens goods (1 0002 500 sq.m.)

Sports goods (1 5002 500 sq.m.)
80300
Domestic appliances (1 5003 000 sq.m.)
120300
200500
Supermarket (1 5003 000 sq.m.)

150350
City hypermarket (3 0007 000 sq.m.)

100250
Hypermarket (over 7 000 sq.m.)

100
200
300
400
500
USD per sq.m per annum
Figure 1.28 Lease conditions in retail centers in Moscow

229
Seoul
344
Mumbai
Istanbul
387
Toronto
505
Moscow
506
Shanghai
568
Paris
724
New York
796
854
Singapore
Hong Kong
1,102
London
1,218
0
400
800
1,200
1,600
USD* per sq. per annum
Figure 1.29 Average class A office rent in cities around the world
Source: Colliers International, Moscow City Investment Agency calculations. Global Office
Highlights.
Notes: *Rental rates in national currencies as of the end of 2014 in USD to national currency
exchange rate on January 1, 2015.
Russian Regions 35
200
Class A
USD per sq.m. per annum
150
Class B
132
117
110
140
140
120
115
100
90
97
100
80
70
50
2010
2011
2012
2013
2014
2015*
Year
Figure 1.30 Average warehouse rental rates in the Moscow area

Note: *Forecast.
769 (USD 290) for class B offices. Operating costs vary from RUB 2,500
to 6,700 per sq. m. a year (USD 43116).
The aggregate volume of high-quality warehousing in the Moscow area
as of April 1, 2015 amounted to 9.7 million sq. m. (including 7.7million
sq. m. of class A warehousing), the vacancy rate for the segment as a
whole being 9.8 percent. The range of rents in Ruble terms is from RUB
3,500 to 5,500 per sq. m. per annum (USD 6095), operating costs from
RUB 1,000 to 1,300 per sq. m. per annum (USD 1723).
As of April 1, 2015, the aggregate volume of high-quality retail premises in Moscow amounted to 9.6 million sq. m. (including 5 million
sq.m. of rented areas), with 8 percent vacancy. The base rents vary from
USD 100 to 400 per sq. m. per annum for anchor tenants and from 200
to 3,500 USD per sq. m. per annum for gallery tenants.15
More detail on real estate in Moscow and Russia at large can be obtained from
Global Property Guide (2016).
15
36

Sydney
40.1
Sao paolo
56.1
San Francisco
56.9
Hong Kong
63.3
Seoul
64.9
Moscow
76.8
Istanbul
80.4
Shanghai
87.4
Paris
90.1
New York
114.7
London
0
40
80
million passengers
120
143.8
160
Figure 1.31 Volume of airline passengers in cities around the world

Source: Euromonitor International, airport information services.
Transportation Infrastructure
The Greater Moscow is Russias major transportation and logistics center
that possesses a well-developed air, road, and rail transportation infrastructure16 (Figures 1.31 to 1.38).
As the nations largest aviation hub, Moscow includes three major
international airports (Sheremetyevo, Domodedovo, and Vnukovo), as
well as the second-tier Ostafyevo International Business Airport17 and
Bykovo regional airport. In 2014, passenger traffic in the Moscow air
transportation hub reached 77 million passengers. In terms of the number of airline passengers, Moscow is ranked among the top 10 cities in
Technically, Moscow is land-locked. However, thanks to the Moscow Canal,

built under Stalin between 1932 and 1937, Moscow obtained indirect access
to five seas: the White Sea, Baltic Sea, Caspian Sea, Sea of Azov, and the Black
Sea. This is why Moscow is sometimes semi-ironically called the port of the five
seas. Apart from transportation, the Moscow canal also provides for about half
of Moscows water consumption, and the shores of its numerous reservoirs are
used as recreation zones.
17
Ostafyevo International Airport opened in 2000 on the grounds of a former
military airbase owned by Gazpromavia, a division of Gazprom. It caters primarily to business aviation.
16
Russian Regions 37
6.0
km per sq.km.
4.5
4.2
3.0
2
1.5
0.9
0.0
New Moscow
Greater Moscow
Old Moscow
Figure 1.32 Moscow road network density

Source: Moscow Town-planning Policy and Construction Complex, Moscow State Program
Development of the Transport System 20122016 and for the longer term up to 2020 (version
of March 18, 2015).
Turkey
480
USA
683
780
Moscow area
817
Israel
Republic of Korea
978
0
250
500
km per 1000 sq. km.
750
1,000
Figure 1.33 Road density in the Moscow region and countries around
the world
Source: Rosstat, EMISS.
the world. In terms of flight arrivals and departures, Moscow is ahead of

Toronto, Istanbul, and Hong Kong.
Influenced by the radial-ring road design historically common for
some European cities (for instance, Paris), the City of Moscows ring
road system is part of the 19 directions of federal highways in a unified transport network. The density of hard surface roads in the Moscow
region has almost doubled over the last seven years and is comparable to
38

St. Petersburg and
Leningrad region
65
86.8
119.7
Krasnodar Krai
126.8
Krasnoyarsk Krai
Moscow area
157.1
0
50
100
million tonnes
150
200
Figure 1.34 Road haulage

Source: Rosstat.
Moscow*
0.59
New York
0.84
1
Sao Paolo
1.2
Shanghai
1.56
Berlin
Singapore
1.58
Seoul
1.62
Paris
1.63
Istanbul
1.81
London
1.88
Hong Kong
2.14
0.0
0.6
1.2
1.8
2.4
USD per litre
Figure 1.35 Retail gasoline prices in cities around the world

Source: Rosstat, Numbeo.
Note: *Average price of A-92 and higher quality petrol at the USD exchange rate of the Bank of
Russia on April 1, 2015.
such countries as Israel, the United States, and Turkey.18 In terms of the
cargo transportation volume, the Moscow region is ahead of many other
One would be prudent to keep in mind Moscow road traffic jams; they are
notoriously known as being among the worst in the world.
18
Russian Regions 39
Tokyo
22
30
London
Hong Kong
38
40
Toronto
Moscow area
58
New York
70
236
Paris
0
60
120
180
240
km per 1000 sq. km.
Figure 1.36 Rail transport density in cities around the world

Source: Rosstat, railway transport information services.
Moscow area
Other Russian regions
39.9%
60.1%
Figure 1.37 Railway passengers in 2013
ussian regions. Comparatively low gasoline prices in Moscow also posiR

tion it as an attractive business hub.
The Moscow Railway Center is the largest railway center in Europe, as
it connects 11 radial and 2 ring lines, 9 terminal stations, and more than
50 freight and sorting stations. The total length of railways is more than
2,700 km. In terms of the rail transportation density, Moscow is ahead of
many major cities internationally, trailing only Paris and New York City.
The Moscow region accounts for more than half of the total volume of
the railway passenger traffic in Russia making transport infrastructure a top
40
800
Total, RUB bn
11.9
Budgetary funds, %
Extra-budgetary funds, %
24.6
33
37.3
38.9
75.4
550
552
549
62.7
61.1
100
88.1
456
400
67
382
50
25
200
75
Source of financing, %
Total, RUB bn
600
2013
2014
2015
2016
2017
Year
Figure 1.38 Development of the Moscow transport system

Source: Moscow State Program Development of the Transport System 20122016 and the longer
term up to 2020 version of March 18, 2015.
priority development area in Moscow. Within the scope of the Targeted

Investment Program of Moscow for 20152017, budget investments in
development of the transport infrastructure will amount to about RUB
800 billion (USD 14 billion at the Bank of Russia exchange rate on April
1, 2015). In 20152017, it is planned in total to allocated over RUB 1.65
trillion (USD 30 billion) for developing Moscows transport system, over
35 percent of this amount coming for nongovernment sources.
Availability of Electricity
The average electric power tariff in Moscow for enterprises and organizations at the beginning of 2015 was about RUB 3.2 per kWh (USD
0.057), which is less than in many major cities worldwide, such as New
York, London, and Hong Kong (Figure 1.39).
Moscow is focusing on making the energy infrastructure more accessible. The average cost of connection to the JSC MOESK grids has dropped
Russian Regions 41
Moscow
0.057
Seoul
0.072
Paris
0.09
Berlin
0.103
Sao Paulo
0.105
Shanghai
0.108
0.114
NY
Hong Kong
0.147
0.165
London
Singapore
0.00
0.191
0.05
0.10
0.15
0.20
USD per kWh
Figure 1.39 Cost of electricity for commercial and industrial

enterprises in cities around the world, January 1, 2015, USD* per
kWh
Sources: Mosenergosbyt OJSC, city energy supply companies.
Note: *At the national currency exchange rate on January 1, 2015.
by almost two-thirds from RUB 37,000 per 1 kW in 2011 to RUB 13,000

per 1 kW in 2013. The time required for technological connection of
facilities with a capacity of up to 150 kW was cut from 180 days in 2012
to 90 days in 2014. The proportion of actual connections under contracts
increased from 36 percent in 2012 to 70 percent in the first half of 2014.
Information and Communication Technology (ICT) Infrastructure
Moscow is the national leader in ICT, being ahead of most Russian
regions in terms of the mobile network coverage and fixed broadband
access and accounting for about 30 percent of all corporate ICT expenditures nationwide. More than 75 percent of Moscow organizations have
websites compared to about 40 percent on average for Russia as a whole.
One in two employees has an Internet-connected PC compared to one in
four in the country as a whole).
Internationally, Moscow is also competitive in terms of cost and quality of Internet access. The average broadband access price in Moscow is
0.65 USD per Mbit/slower than in many major global cities. Internet
42
broadband access quality in Moscow is comparable to that in Singapore or

London. In terms of the Internet connection speed Moscow outperforms
such cities as London and Berlin. In terms of the fixed broadband access,
Moscow exceeds the average level of the Organization for Economic
Cooperation and Development(OECD) members (Figures 1.40 to 1.49).
Business and Financial Services
As of January 1, 2015, Moscow had over 250 thousand organizations
operating in the financial and business services sector (including R&D
Moscow
Moscow region
22%
4.2%
73.9%
Figure 1.40 ICT expenditures by organization

Source: Rosstat.
Korea
37.9
United Kingdom
36.2
Moscow
31.5
USA
30.2
28.2
Japan
OECD members
27.4
Italy
22.5
Czech Republic
17.7
Russia
16.9
Poland
15.8
Turkey
11.4
0
10
20
30
Subscribers per 100 of the population
Figure 1.41 Fixed broadband Internet access subscribers, June

2014, per 100 of the population
Source: OECD, Rosstat.
40
Russian Regions 43
Russia
187.8
256
St Petersburg and Leningrad region
252.5
Moscow region
Krasnodar Krai
218.2
199
Samara region
Kaluga region
187.9
Novosibirsk region
182.7
172.8
180
150
210
240
270
Figure 1.42 Mobile radio telephone communications subscribers,

January 1, 2015, per 100 of the population
Source: EMISS.
Russia
17
Moscow
32.9
Novosibirsk region
29.3
St Petersburg
29.1
22.8
Samara region
19.1
Kaluga region
18.5
Krasnodar Krai
14.9
0
10
20
30
40
Figure 1.43 Active subscribers to fixed BBA

Source: EMISS.
and IT-services). This comprises 25 percent of all companies operating in

this sector in Russia and 23 percent of all Moscow companies. Moscows
infrastructure in business and financial services is profiled in Figures 1.50
to 1.55.
44
Russia
26
Moscow
54
35
St Petersburg
Novosibirsk region
33
31
Krasnodar Krai
Samara region
26
25
Kaluga region
23
0
30
15
45
60
PC per 100 employees
Figure 1.44 Organizations having own web sites

Source: Rosstat.
Russia
26
54
Moscow
St Petersburg
35
Novosibirsk region
33
Krasnodar Krai
31
Samara region
26
Kaluga region
25
23
0
15
30
PC per 100 employees
45
60
Figure 1.45 Number of PCs with Internet access, 2013, per 100
employees in organization
Source: Rosstat.
A significant number of organizations in Moscow offer professional

outsourcing services. For instance, there are over 5 thousand law firms
and about 3.5 thousand accounting and auditing firms.
Russian Regions 45
3.95
Paris
Istanbul
3.49
3.4
Hong Kong
3.08
New York
Singapore
2.85
2.77
London
Berlin
2.29
1.53
Sao Paulo
1.43
Prague
Shanghai
1.12
0.65
Moscow
0
USD per Mbit/s
Figure 1.46 Average cost of Internet access in cities around the

world, April 2015, USD per Mbit/s
Sources: Ookla, Net Index.
Sydney
78.34
83.72
Berlin
83.91
New York
Paris
85.04
Prague
85.45
London
87.32
Warsaw
87.4
Moscow
87.88
Singapore
87.95
75.00
78.75
82.50
86.25
90.00
Quality index (R-factor)
Figure 1.47 Internet broadband access quality in cities around the

world (R-factor), April 2014
46

Upload, Mbit/s
Download, Mbit/s
Singapore
114.7
94
102.4
98.6
Hong Kong
Paris
85.4
40.5
New York
52.8
19.1
Prague
36.5
18.1
Shanghai
35.2
14.1
31.5
28.5
Moscow
Sao Paulo
11.5
London
10.8
Berlin
4.1
27.6
27
Istanbul
28.2
15
30
60
Mbit/s
90
120
Figure 1.48 Average data transmission speed by Internet in cities

around the world
Korea
37.9
United Kingdom
36.2
Moscow
31.5
USA
30.2
28.2
Japan
27.4
OECD members
Italy
22.5
Czech Republic
17.7
Russia
16.9
15.8
Poland
Turkey
11.4
0
10
20
30
Figure 1.49 Fixed broadband Internet access subscribers, June

2014, per 100 of population
Sources: OECD, Rosstat.
40
Russian Regions 47
There are 450 banks operating in Moscow, 149 of them with the participation of nonresidents in their authorized capital, including 69 that
are 100 percent foreign-owned.
International comparisons indicate that Moscow is ranked ahead of
New York, London, and other major cities internationally in terms of
the number of companies operating in the financial services sector. The
change in the citys economic structure is accompanied by a rise in the
proportion of the population employed in the business and financial
services, R&D, and IT services sectors. More than 1.6 million people
in Moscow are engaged in this sector, thus constituting 24.4 percent of
the total employed population of the city. In this respect, Moscow outperforms Sao Paolo, Prague, Shanghai, and Tokyo, In terms of employment in the financial and business services sphere (18 percent in 2013),
Moscow outstrips Tokyo and Shanghai, slightly trailing the worlds main
financial centers, where this level tops 20 percent.
Research and Development
The Moscow metropolitan area that includes the City of Moscow and
Moscow region (togetherthe Greater Moscow) is Russias top R&D
and innovation hub. The Moscow metropolitan area hosts five science
% of total number of
organizations in the industry in
Russia
75%
% of total number of
organizations in Moscow
77.1%
25%
Moscow
22.9%
Business and financial

services
Other
Figure 1.50 Business and financial service providers in Moscow,

January 1, 2015
Source: Rosstat.
48
Cleaning services
783
1,121
Employment agencies
Audit services
1,494
Accounting services
1,960
2,027
Consulting
3,013
Design services
Advertising and PR services
3,566
5,717
Legal services
0
1,500
3,000
4,500
Number of companies
Figure 1.51 Business service providers in Moscow

Source: www.yell.ru.
100% nonresident stake
69
50% to 100% nonresident

stake
Less than 50% nonresident
stake
20
Without nonresident
participation
60
301
Figure 1.52 Credit institutions in Moscow by type of participation by

nonresidents in the authorized capital, January 1, 2015
Source: Bank of Russia.
towns, Skolkovo Innovation Center, and five innovative regional clusters.

Figures 1.56 to 1.58 specify Moscows R&D profile.
Moscow accounts for about 20 percent of all Russian organizations
involved in R&D and a little less than a half of all Russian scientific personnel. Together, these organizations employ about 237 thousand people
Russian Regions 49
3.1
Berlin
6.6
Vienna
Zurich
Paris
27.3
Seoul-Incheon
29.3
Tokyo
38
New York
43.5
London
45.6
Moscow
63.9
0
20
40
Companies, thousands
80
60
Figure 1.53 Financial service providers in cities of the world

Sources: BvD, Mint Global.
Percentage of those employed, %
30
27
24.4
23.4
24
21.3
21.6
21.5
2007
2008
2009
22
22.3
2010
2011
21
18
2012
2013
Year
Figure 1.54 Employment in financial and business services in

Moscow, percent of total number employed
Source: Mosgorstat.
in the R&D sphere in Moscow, this constituting about 4 percent of the

entire Moscow employed population and about a third of all scientific
personnel in Russia. The City of Moscow also leads the nation in the
total number of issued patents for inventions and utility models holding
a 3.4-percent share nationwide. Moscows level of development in the
sphere of software developments and multimedia design puts it in the Top
Ten major cities in the world. According to the PricewaterhouseCoopers
50
Tokyo
10.7
Shanghai
15.8
16.4
Prague
Sao Paulo
17
18
Moscow
18.5
Berlin
London
21.6
Paris
21.6
24.5
New York
0.0
7.5
15.0
22.5
30.0
Percentage of those employed, %
Figure 1.55 Employment in financial and business service sector* in

cities around the world
Source: Euromonitor International.
Note: *Not including in the sphere of scientific research and development and provision of IT
services.
Moscow
Moscow region
20.2%
6.5%
73.3%
Figure 1.56 Organizations involved in R&D in the Moscow region

Source: Rosstat.
study Cities of opportunities 2014, Moscow is in 9th place, alongside

Tokyo and Stockholm. Of the 40 biggest companies on the Russian IT
market (according to the Kommersant daily, at the end of 2014), 31 are
based in Moscow.
Russian Regions 51
32.7%
Moscow
Moscow region
55.3%
12%
Figure 1.57 Personnel employed in R&D

Source: Rosstat.
Moscow
Moscow region
33.4%
60.1%
6.5%
Figure 1.58 Patents issued for inventions and models

Source: EMISS.
Taxation
The Russian government applies a flat (proportional) scale for income
tax. Thus, if a natural person is a tax resident of the Russian Federation,
the largest part of his/her income is subject to tax rate at 13 percent
(Figure 1.59). Such income, for instance, includes wages and incomes
from sale of property. The law of the Russian Federation and laws and
regulatory provisions of the City of Moscow for natural persons allow for
52
Russia*
13
Czech Republic
15
Slovakia
25
Poland
32
Turkey
35.8
Great Britain
45
The USA
46.3
47.5
Germany
54.5
France
Sweden
56.9
0
15
30
Rate, %
45
60
Figure 1.59 Maximum personal income tax rates

Source: OECD, Federal Tax Service of Russia.
Note: *Maximum combined income tax rate at central and regional levels.
special tax deductions for income tax, as well as property, land, and transport tax deductions. More details on taxes in Russia can be obtained from
Deloitte (2015), Doing Business in Russia (2016), and Doing Business in
Russia. Your Roadmap to Successful Investments (2015).
Urban Environment
Housing and Hotels
Information on the dynamics and availability of housing and hotels may
be important both as part of the companys logistical preparation for
expansion overseas and as an indication of the dynamics, business opportunities, and constraints in this sector.
More than 3 million sq. m. (approximately 32 million sq. ft.) of residential houses are built in Moscow each year. Moscows housing stock
contains around 233 million sq. m., or around 19.2 sq. m. per resident. In
2014, 3.3 million sq. m. of housing were installed in Moscow (including
Russian Regions 53
1.6 million sq. m. in New Moscow). Moscow accounts for 4.1 percent
of the volume of housing construction in Russia. In the State Housing
Program for the City of Moscow, the budget and nonbudgetary sources
financing will ensure the construction of around 9.4 million sq. m. of
new housing in 20152017 (Figure 1.60).
An average cost of housing (a typical average quality apartment, data
from Rosstat for the 4th quarter of 2014) on Moscows primary real estate
market is RUB 141,000 (USD 3,000) for 1 sq. m., and on the secondary
market it is RUB 168,000 (USD 3,500) for 1 sq. m. According to the
ratio of housing costs to disposable income, Moscow is comparable to the
mega-cities of Southeast Asia, and is below the level of cities in Western
Europe and the United States.
Moscow has more than 350 hotels, mini-hotels, and hostels. The
industry development scheme will make provisions for the construction
of 172 hotels (32,000 rooms) for 70,000 people in Moscow until 2016.
By 2025, Moscows hotel network will increase to 720 hotels, with the
growth in the 23 star hotel categories to 65 percent (Figure 1.61).
The cost of a hotel room at a 34 star hotel in Moscow is lower
than in New York, London, or Hong Kong. Hostel prices for a 12 star
accommodation are comparable with prices in most major cities, such as
Shanghai or Paris.
Introduction of housing (million sq m)
Volume of financing (from all sources, RUB bn)
3.50
350
3,33
3,14
3.00
3,05
262
229
300
3,10
3,12
3,14
3,16
230
233
235
237
250
200
2.75
2.50
200
2012
2013
2014
2015
Year
2016
2017
2018
150
Figure 1.60 New residential construction and financing in Moscow

Source: Rosstat, State Housing Program for the City of Moscow 20122018 (April 22, 2014).
RUB bn
Million sq m
3.25
1,000
Number of hotels
Number of bedrooms, thousand
Amount of hotels
750
200
150
724
127.9
541
500
79.5
369
250
100
50
47.8
2012
2016
2025
Number of hotel rooms (1000)
54
Year
Figure 1.61 Development of hotel networks in Moscow

Source: Hotel industry allocation scheme for the City of Moscow (ed from January 13, 2015).
Apartment rental rates in Moscow are in general higher compared to

other Russian regions, but still comparable with prices in large metropolitan cities of Europe and worldwide. According to (2016),
a Moscow-based real estate search system, there are around 90,000 active
rental offers in Moscow. The average cost of renting residential real estate
in Moscow, according to data from the global portal Numbeo, is around
USD 1,250 for a one-bedroom apartment in the city center, and around
USD 770 outside the center of Moscow. This is higher than average in
Russia, although it is comparable with prices in large global cities. For
example, rent prices in New York, London, or Hong Kong are higher
than Moscows by 3040 percent, and the Paris prices correspond roughly
to the Moscow prices.
Infrastructure of Trade and Public Catering
The quality of infrastructure for trade and public catering is an integral
part and indication of the level of country/regional development and
attractiveness for international business. It is also a critical contributing factor to the quality of life in general, making the country/region
Russian Regions 55
attractive or unattractive for living in the eyes of the company personnel, including expatriates. If the expanding company operates in trade or
catering, information on the infrastructure of trade and public catering
becomes of vital direct importance.
Moscow possesses an extensive retail infrastructure (Figures 1.62
to 1.70) with more than 25,000 retail trade facilities, including more
than 1,000 hypermarkets and supermarkets, as well as more than 4,000
mini-markets and convenience stores. The trade premises in Moscow take
up 780 sq. m. per 1,000 residents (for hypermarkets and supermarkets
this is 340 sq. m. per 1,000 residents). Over the last four years, the volume of the retail market in Moscow has grown by 15 percent (in comparable prices in rubles) and exceeded RUB 4.4 trillion in 2014 (USD 115
billion). Moscow is among the top five cities worldwide in terms of the
presence of major international consumer brands (44 new brands arrived
onto Moscows markets in 2014 and 31 in 2013).
The food stuff prices in Moscow tend to be lower compared to many
major cities worldwide; there food is about 3540 percent less expensive
than in Paris, London, or New York.
Hypermarkets and supermarkets
1,136
Specialty food shops
2,124
Specialty nonfood shops
6,267
6,325
Nonspecialized shops
4,585
Shops selling convenience goods

Trade pavilions
1,916
Pharmacies, pharmacy shops
1,814
Shops discounters
916
0
2,500
5,000
Retail, units
Figure 1.62 Retail trade facilities in Moscow

Source: Rosstat.
7,500
10,000
56
Moscow has the development potential in its catering infrastructure.

As of January 1, 2015 there were 11,087 catering enterprises in Moscow;
of those, 7,651 were public establishments in public access and 3,436
were cafeterias owned by institutions or organizations. There are around
45 locations per 1,000 residents in public access on average, which provide residents with food in Moscow.
The turnover across Moscows catering sector has risen from 2010 by
19 percent (in comparative prices in rubles) and in 2014 it was RUB 174
billion (USD 4.5 billion). The share of expenditure (including tourists)
on eating out in Moscow was around 7 percent, which is lower than in
large cities of Western Europe, the United States and Canada where it
often exceeds 2530 percent. In terms of the number of restaurants per
capita, Moscow is comparable to Sidney and Singapore, but lags behind
London, Paris, or New York. On average, visiting a restaurant in Moscow
costs less than in New York, Paris, or London, and is more expensive
compared to Berlin or Hong Kong.
Educational Infrastructure
Education is an important characteristic of consumer sophistication and
a critical factor in market segmentation. It is also a foundation of the
quality of labor necessary for manufacturing projects overseas. Moreover,
5,000
Billion rubles
In comparable prices, % by 2010
160
Billion rubles
3,750
140
3,640
3,322
2,500
2,882
106.6
1,250
108.4
112.2
114.9
100
2010
120
100
2011
2012
2013
2014
Year
Figure 1.63 Retail trade turnover dynamics in Moscow

Source: Rosstat. Calculations by Moscow City Investment Agency.
80
4,437
4,017
Russian Regions 57
42.1
Madrid
Beijing
43.4
Singapore
43.4
Paris
43.7
Hong Kong
43.7
Shanghai
44
New York
45
Moscow
45
Dubai
55.3
London
57
20
30
40
50
60
Figure 1.64 Presence of international consumer brands in cities

around the world*
Source: CBRE.
Note: *According to the survey of sample from 334 international retailers.
Istanbul
43.2
Moscow
56.8
Shanghai
58.8
67.3
Berlin
81.8
Hong Kong
88.4
Singapore
91.3
London
93.6
Seoul
Paris
98.5
100
New York
San Francisco
111.9
0
30
60
The index of the cost of food*
90
Figure 1.65 Food price index in cities around the world

Source: Numbeo.
Note: *Ratio of the average cost of food in cities around the world and New York.
120
58
8.4%
9.5%
43.2%
Hypermarkets and supermarkets

Specialty food shops
Specialty nonfood shops
Nonspecialized shops
Convenience shops
Pavilions, pharmacies and drug
stores, discount stores
18.9%
15.8%
Figure 1.66 Retail facilities in Moscow
The public
Closed network
(organizations)
31%
69%
Figure 1.67 Catering enterprises in Moscow

Source: Department of Trade and Services of Moscow.
similar to trade and public catering, the quality of the educational environment can make the country/region attractive or unattractive for living from the company personnel standpoint (particularly important for
expatriate personnel). Figures 1.71 to 1.74 characterize the educational
environment in Moscow.
Moscow is home to more than 1,000 preschool educational centers. At
the beginning of 2014, 414,000 children of preschool age were enrolled
in kindergarten, which is almost 34 percent higher than the 2010 level.
Russian Regions 59
200
Billion rubles
165
Billion rubles
150
120
118
140
118.8
109.7
107.3
50
174
145
135
100
160
100
120
% by 2010
100
2010
2011
2012
Year
2013
2014
80
Figure 1.68 Dynamics of market turnover for catering in Moscow

Singapore
44
Moscow (public network)
63
Sydney
99
Sao Paulo
111
Hong Kong
166
Paris
189
Shanghai
237
New York
295
London
478
0
150
300
450
Restaurants per 100,000 people
Figure 1.69 Restaurants in cities around the world*

Source: Department of Trade and Services of Moscow, World Cities Culture Forum.
Note: *Latest data available.
600
60

Sao Paulo
53.7
58.8
Hong Kong
Berlin
64.1
74.8
Toronto
Sydney
85.7
Moscow
91.2
Paris
97.7
San Francisco
99.2
New York
100
London
101.7
Zurich
146.9
0
40
80
Price index in restaurants*
120
160
Figure 1.70 Price index for restaurants in cities around the world
Source: Numbeo.
Around 40,000 students receive preschool education in short-stay groups,

and around 2,000 in family kindergartens.
In the 2013/2014 academic year in Moscow there were around 1,500
general education schools, education centers, gymnasiums, and secondary schools (including 131 private educational centers), with enrollment
totaling 837,000. Four Moscow-based academic institutions are members
of the Council of International Schools (CoIS), 11 schools operate under
the International Baccalaureate system (IB).
At the start of the 2013/2014 academic year, Moscow was a host of 223
higher education institutions (23 percent of the total number of higher education establishments in Russia, including 92 state and 131 private higher
education institutions19). In 2013, Moscow universities produced 226,000
specialists with higher education, and there were 887,000 students with university degrees. According to the amount of students calculated per 1,000
residents, Moscow is ahead of New York, Hong Kong, or London.
Institutions of higher education in Russia are a conceptual equivalent of fouryear universities and colleges in the United States and Europe.
19
Russian Regions 61
Number of children studying (1000s)
500
375
407
414
2013
2014
365
310
328
250
125
2010
2011
2012
Year
Figure 1.71 Student enrollment in preschool centers in the City of

Moscow
Source: Rosstat.
Thousands of childrens
900
800
763
782
794
2010/11
2011/12
School year
830
837
2012/13
2013/14
700
600
500
2009/10
Figure 1.72 Student enrollment in general education schools in the

City of Moscow
Source: Rosstat.
Culture, Leisure, and Entertainment

Culture, leisure, and entertainment are often considered as soft variables of a business environment and as such are sometimes overlooked
in regional analysis. However, similar to education, they contribute to
62

2
New York
Vienna
Paris
Seoul
Moscow
4
5
Shanghai
London
10
Singapore
28
Hong Kong
0.0
7.5
15.0
22.5
30.0
Number of CoIS schools
Figure 1.73 Council of International Schools (CoIS) affiliated schools

in cities around the world
Source: Council of International Schools (CoIS).
43.5
London
Berlin
45.6
Hong Kong
46.2
54.2
New York
61
Stockholm
68.7
St. Petersburg
73.3
Moscow
116
Prague
144
Paris
0
40
80
120
150
Number of students (per 1,000 people)
Figure 1.74 Enrollment in in higher educational institutions in cities

around the world*
Sources: Rosstat, Eurostat, HESA, the City University of New York, the government of the Hong
Kong SAR, calculations by Moscow City Investment Agency.
Note: *The Paris, Prague, Stockholm, and Berlin data is from 2012.
Russian Regions 63
consumer sophistication, impact market segmentation, and affect the

quality of life of the company personnel.
As the national capital city, Moscow offers extensive cultural, leisure,
and entertainment opportunities. In total, Moscow has more than 360
museums, and its general storage collection is 14.7 million units rivaling
most major cities around the world.
Moscow is the city of playhouses. It has 241 playhouses with a repertoire of productions ranging from classical to modern. Every year, more
than 7 million spectators visit Moscows playhouses. In terms of the number of playhouses and visits on a per capita basis, Moscow is comparable
to Berlin but trails London or New York.
Moscow has more than 110 movie theaters/cinemas20 (585 cinema
screens). According to the quantity of cinema screens, Moscow overtakes
the majority of the main cities around the world, and is comparable to
New York (501) or London (566). Therefore, Moscow has the potential
to develop and provide its citizens with more cinemas. On average, there
are 48 cinema screens in Moscow per 1 million residents compared to
more than 70 in London and Berlin, and 85 in Paris.
Public Transportation
Figures 1.75 to 1.77 characterize the Moscow public transportation system. This system carries around 15 million passengers in per day (5.5
billion passengers per year). Moscow has more than 1,300 ground urban
transport routes, including 8 night bus routes, 12 metro lines (327.5 km
of track, 196 stations), and more than 53,000 taxis. Moscow and its satellite cities are linked by railways in 11 directions.
The Moscow Metro is the main mode of transportation that carries
passengers around the city (56 percent of the total passenger traffic). The
Moscow Metro has one of the longest lines and highest level of passenger
traffic in the world. In 20152017, RUB 466 billion (USD 8.1 billion)
from the municipal budget will be spent on developing the metro via
The word (teatr) in Russian signifies playhouse, and

(kinoteatr) means movie theater.
20
64
Total
5.48
6.83
0.21
1.32
Taxi
Railway transport
0.1
0.68
2.5
Metro
4.84
0.01
0.48
2
2.35
2.5
2010
2014*
Year
bn passengers
Road passenger
transport
2.2
2.8
2020*
Figure 1.75 Volume of passengers in Moscow

Source: Department for Transport and Road Infrastructure Development of Moscow.
Note: *2014estimate, 2020forecast.
Sao Paulo
78.4
Istanbul
86.4
Berlin
147.4
Singapore
150.8
Hong Kong
178
Paris
219.9
Seoul
326.5
Moscow
327.5
New York
368
London
402
Shanghai
533
0
150
300
450
km
Figure 1.76 Metro (subway) lines in cities around the world

Source: World Metro Database, Moscow Metro State Unitary Enterprise.
Russian Regions 65
0.64
Shanghai
Istanbul
0.8
Moscow
0.85
Seoul
1.02
Hong Kong
1.03
Sao Paulo
1.15
Singapore
1.35
Paris
2.01
New York
2.75
3.02
Berlin
London
0
2
USA dollars per trip
3.79
4
Figure 1.77 Average public transport fares in cities around the world
Source: Numbeo.
the citys investment appropriation program, where 34 new stations and

70km of the rail track will be installed.
Public transportation fares in Moscow are relatively cheaper in comparison to the other large cities of the world. Depending on the tariffs and
other conditions, public transportation fares in Moscow vary between
RUB 14 and 60 per journey (USD 0.28 to USD 1.17 according to the
Bank of Russias exchange rates as of May 1, 2015), essentially cheaper
than New York, Paris, or London.
Public safety
Public safety is of high priority for daily lives and business operations. In
general, the trends and dynamics of Moscows public safety system are in
line with those in major metropolitan cities internationally (Figures 1.78
to 1.81).
Over the past five years the amount of reported crime in Moscow
has been reduced by 20 percent. The number of murders and attempted
murders during that time has dropped by more than twice.
Since 2012, the number of road accidents over the past two years has
decreased by 8 percent, and the number of traffic accidents has decreased
by 15 percent over the past five years. The city has around 120,000

Number of reported crimes (per 100,000 people)
66
2,400
1,886
1,871
1,800
1,622
1,469
1,512
1,453
1,501
2011
Year
2012
2013
2014
1,200
600
2008
2009
2010
Figure 1.78 Crime rates in Moscow

Sources: Rosstat, Moscow Department of the Russian Ministry of Internal Affairs, calculations by
Moscow City Investment Agency.
Road accidents (per 100,000 people)
200
150
118.4
109.8
102.6
102.2
100.8
94
92.9
2010
2011
Year
2012
2013
2014
100
50
2008
2009
Figure 1.79 Traffic accidents in Moscow per 100,000 people

Sources: Rosstat, Traffic Police of the Russian Ministry of Internal Affairs, calculations by Moscow
City Investment Agency.
surveillance cameras in operation (on average 47 cameras per 1sq. km.

area of Moscows new borders). The safety of residents and guests in
the capital is upheld by 68,500 strong personnel from the Ministry of
Internal Affairs. On a per capita basis, it is comparable to New York and
London. According to Numbeo.com, Moscows safety levels are comparable to cities in Europe such as Paris, Dublin, and Brussels.
Russian Regions 67
Sao Paulo
26.1
Rome
44
Paris
45.1
Dublin
45.4
Moscow
45.9
Brussels
47.2
New York
52.9
London
53.4
54.4
Beijing
67.5
Berlin
Shanghai
72.5
0
20
40
60
80
Security index
Figure 1.80 Safety index in cities around the world

Source: Numbeo.
Police staff per 100,000 people
1,000
750
715
500
591
595
600
Moscow
New York
London
453
250
Hong Kong
Singapore
Figure 1.81 Police staff in cities around the world*

Source: Russian Ministry of Internal Affairs, the Singapore Police Force, the Government of the
Hong Kong SAR, GOV.UK, Federal Bureau of Investigation (UCR), calculations by Moscow City
Investment Agency.
Note: *For Moscow, the data on the number of staff from the Ministry of Internal Affairs is from
2011; for other cities the data includes the civil services staff, and the latest accessible data is from
2012 to 2014.
References
Brookings Institution. 2015. Global Metro Monitor. www.brookings.edu/
research/global-metro-monitor/.
Central Intelligence Agency. 2015. The World Factbook 2015. Washington,
DC: Central Intelligence Agency. www.cia.gov/library/publications/theworld factbook/index.html
68
Consumer Lifestyles in Japan. 2016. Passport.

A Country Study: Russia. 1998. Washington: GPO for the Library of Congress.
1996. Glenn E. Curtis. ed. http://lcweb2.loc.gov/frd/cs/rutoc.html
Deloitte. 2015. Doing business in Russia 2015. Tax and Legal. www.
deloitte.com/content/dam/Deloitte/ru/Documents/tax/doing-business-inRussia-2015.pdf
Demographia. 2016. World Urban Areas. www.demographia.com/db-worldua.
pdf
Doing Business in Russia. 2016. Baker & McKenzieCIS, Limited. www.
bakermckenzie.com/-/media/files/insight/publications/2016/06/doingbusiness-in-russia-2016/bk_russia_doingbusiness_2016.pdf?la=en
Doing Business in Russia. Your Roadmap to Successful Investments. Tax and
Legal. 2015. KPMG in Russia and the CIS. www.kpmg.com/RU/en/
IssuesAndInsights/ArticlesPublications/Documents/Tax_2e.pdf
Doing Business 2016. Measuring Regulatory Quality and Efficiency: Economy
Profile. 2016 Russian Federation. 2016. World Bank Group. www.
doingbusiness.org/Reports/Subnational-Reports/~/media/giawb/doing%20
business/documents/profiles/country/RUS.pdf
Global Property Guide. 2016. Russia. www.globalpropertyguide.com/Europe/
Russia
Invest in Russia. 2016. http://invest-rf.com/about-agency/regional-agencies/
Moscow. 2016. Wikipedia. https://en.wikipedia.org/wiki/Moscow.
Moscow City Investment Agency. 2016. http://investmoscow.ru/agency/
Moscow Investment Strategy up to 2025. 2016. Moscow Investment Portal.
http://en.investmoscow.ru/media/2487305/B-en-2016.pdf
Russia. 2016. globalEDGE. http://globaledge.msu.edu/countries/russia/
corporations
Russia: Country Profile. 2016. Passport.
Russia 2015 Statistical Pocketbook. 2015. Federal State Statistics Service
(Rosstat). www.gks.ru/free_doc/doc_2015/rus15_eng.pdf
Russian Investment Agency. 2016. http://invest-rf.com/
Special Economic Zones of the Russian Federation. 2011. Ministry for Economic
Development of the Russian Federation. http://economy.gov.ru/wps/wcm/
connect/economylib4/en/home/activity/sections/specialeconomicareas/
main/index
UNCTAD (United Nations Conference on Trade and Development). 2016.
World Investment Report. Russian Federation: Country Factsheet. http://
unctad.org/en/Pages/DIAE/World%20Investment%20Report/CountryFact-Sheets.aspx
Russian Regions 69
U.S. Commercial Service. 2016. Doing Business in Russia: 2016

Country Commercial Guide for U.S. Companies. www.export.gov/
article?series=a0pt0000000PAulAAG&type=Country_Commercial__kav.
U.S. Department of State. 2016. Russia: Investment Climate Statement for
2016. http://www.state.gov/e/eb/rls/othr/ics/investmentclimatestatements/
index.htm#wrapper
The World Factbook. 2016. www.cia.gov/library/publications/resources/theworld-factbook/
World Energy Outlook. New Policies Scenario. 2012.
. - (Russian
Regions. Socio-Economic Indicators) (2015).
. http://www.gks.ru/bgd/regl/b15_14p/
Main.htm.
. 2016. http://stat.cian.ru/en/
Index
Accredited representative offices, 94
Agreements, 164165
Attitudes and styles, 160161
Avtoframos, 207208
Bargaining, 161163
Bridgestone, 238242
Business culture
attribution and rationalization,
117118
demographics
challenges, 125
dependency ratios, 124
overall life expectancy, 121,
123124
Russias Slavic ethnic groups, 121
Russia vs. United States, 122,
123
urbanization, 124125
determinants, 117
forces and forms, 117
generalizations, 116
geography and history, 118119
highly centralized governance
industrial revolution, 119
politico-economic liberalization,
121
problem-solving attitudes, 121
repressive political system, 120
socioeconomic dependency, 119
Soviet laws, 119120
Soviet penitentiary system, 120
individual and organizational
behavior, 115116
mental programming, 116
national profile (see Russias
national profile)
practical applications, 153156
agreements and contracts,
164165
attitudes and styles, 160161
bargaining, 161163
Business Culture on the World

Stage, 143
communication, 157158
conservative attire, 165
corruption, 148149
crises management, 147148
cross-cultural implication, 142
decision-making, 163164
empowered organization,
145146
Executive Planet, 143
Expat, 143
government and government
agencies, 149150
initial contacts and meetings,
158159
international business, 141
leadership positions, 144
local rules, 146147
long-term goals, 147
meetings and negotiations,
150153
negotiation process, 141
one-company organizational
culture, 144145
punctuality, 166
relationships and respect,
156157
women in business, 165
religion, 126127
social system and family, 128
values and norms, 116
Business-to-business marketing, 72
Business-to-government marketing,
72
Central Federal District, 6, 9
City of Moscow and Moscow Oblast,
6
Civil Code of the Russian Federation,
9798
Communication, 157158
246 Index
Consumer-to-business, 72
Consumer-to-consumer marketing,
72
Contracts, 164165
Corruption, 148149
Cost, insurance and freight (CIF)
value, 110
Council of International Schools
(CoIS), 62
Country Commercial Guide, 89
Decision-making, 163164
Demographics
challenges, 125
dependency ratios, 124
overall life expectancy, 121,
123124
Russias Slavic ethnic groups, 121
Russia vs. United States, 122, 123
urbanization, 124125
Dependency ratios, 124
Direct marketing, 9899
East-West Digital News (EWDN)
report, 106
Economic regions, 34
Elderly dependency ratio, 124
Electronic commerce
cash-on-delivery, 106
Chinese retailers, 106
cross-border sales, 105
current economic downturn, 107
customer service, 105
domestic e-commerce market, 105
EWDN reports, 106
FOM report, 106
foreign online stores, 104105
Research agency Data, 104
Russian data localization law, 107
Entrepreneurial business. See also
Small- and medium-sized
enterprises
accredited representative offices,
94
agents, 91
branch offices, 94
companies and taxation
dividends, interest, and royalties,
97
import duties, 95
land, property, and personal

income taxes, 97
profits tax, 9495
social security contributions, 96
social welfare taxes, 96
value added tax, 9596
Country Commercial Guide, 89
direct marketing, 9899
distribution and sales channels,
101103
distributors, 9192
due diligence, 112113
educational attainment, 88
electronic commerce
cash-on-delivery, 106
Chinese retailers, 106
cross-border sales, 105
current economic downturn, 107
customer service, 105
domestic e-commerce market,
105
EWDN reports, 106
FOM report, 106
foreign online stores, 104105
Research agency Data, 104
Russian data localization law,
107
foreign subsidiaries, 9293
franchising, 9798
FTS, 9394
fuel and energy sectors, 91
government procurement, 100101
intellectual property rights, 112
joint ventures/licensing, 99100
local professional services, 111
metropolitan cities, 88
mineral resources, 90
natural resources, 91
Northwest Federal District, 90
pricing, 110111
representative/branch offices, 92
sales service/customer support,
111112
selling factors/techniques, 103104
trade promotion and advertising
advertisers, 107108
enforcement, 107
market development, 109
media outlets and print
publications, 108, 110
Index 247
nonstandard communication
methods, 108
social networking, 108
U.S. Commercial Service, 87
Executive Planet, 143
Expat, 143
Federal districts, 34
Federal Tax Service of the Russian
Federation (FTS), 9394
Franchising, 9798
Get Taxi, 209211
Global Entrepreneurship Monitor
report, 76
Globalization and World Cities
Research Network, 17
Global Leadership and Organizational
Behavior Effectiveness
(GLOBE) study
autonomous style, 136138
charismatic/value-based style, 135
cultural dimensions, 134
cultural parameters, 137
humane style, 135
leadership and societal culture,
134
participative style, 135
self-protective style, 136
team-oriented style, 135
Highly centralized governance
industrial revolution, 119
politico-economic liberalization,
121
problem-solving attitudes, 121
repressive political system, 120
socioeconomic dependency, 119
Soviet laws, 119120
Soviet penitentiary system, 120
Hofstedes cultural dimensions
comprehensive framework,
128129
Individualism versus Collectivism,
129130
masculinity versus femininity, 130
Power Distance Index (PDI), 129
Uncertainty Avoidance Index, 130
Horizon framework, 151
Individualism versus Collectivism

(IDV), 129130
Indulgence, 131
Information and communication
technology (ICT)
infrastructure
active subscribers, 43
average cost of internet access, 45
average data transmission speed, 46
expenditures by organization, 42
fixed broadband internet access
subscribers, 42, 46
internet access, 4142
internet broadband access quality,
45
mobile radio telephone
communications subscribers,
43
number of PCs with internet
access, 44
own web sites, 44
Information sources, 170176
Intellectual property rights (IPR), 112
Joint ventures/licensing, 99100
Lada Automotive, 214218
Local professional services, 111
Masculinity, 132
Masculinity versus Femininity (MAS),
130
MasterCard Global Destination Cities
Index, 17
Meetings, 158, 159
Military district, 4
Ministry of Economic Development
(MED), 101
Moscow city investment
business activity, 2325
business and financial services,
4243
credit institutions, 48
employment, 49, 50
professional outsourcing services,
44
providers, 47
commercial real estate access
average class A office rent, 34
248 Index
average warehouse rental rates,

35
high-quality commercial space,
33
high-quality warehousing, 35
lease conditions in retail centers,
34
vacancy rate, 33
culture, leisure, and entertainment,
61, 63
economic and financial stability
balanced financial results, 31
budget deficit, 29
budget indicators, 30
public debt, 30, 31
economic-geographical position,
2124
educational infrastructure
academic institutions, 60
consumer sophistication, 56, 58
Council of International Schools,
62
general education schools, 61
higher education institutions,
60, 62
preschool educational centers,
58, 60, 61
electricity availability, 4041
housing and hotels
apartment rental rates, 54
average cost, 53
dynamics and availability, 5253
hotel room cost, 53
industry development scheme,
53
networks development, 54
new residential construction and
financing, 53
ICT infrastructure
active subscribers, 43
average cost of internet access, 45
average data transmission speed,
46
expenditures by organization, 42
fixed broadband internet access
subscribers, 42, 46
internet access, 4142
internet broadband access
quality, 45
mobile radio telephone

communications subscribers,
43
number of PCs with internet
access, 44
own web sites, 44
investment activity
foreign direct investment inflows,
2627
stock in fixed assets, 2426
labor force
adult population and higher
education, 28
average hourly labor rates, 29
economically active population,
27
unemployment rate, 27, 28
Moscow City Investment Agency,
1617
opportunities
average per capita income, 19
gross regional product, 1923
money spent, 20
ratio of outstanding loans, 21
Russias retail trade turnover, 18
urban agglomerations, 17, 18
volume of individuals deposits,
20
public safety
crime rates, 65, 66
police staff, 67
residents and guests, 66
safety index, 67
traffic accidents, 65, 66
public transportation
average public transport fares, 65
metro (subway) lines, 64
Moscow Metro, 63
volume of passengers, 64
research and development
inventions and models, 51
metropolitan area, 47, 48
organizations involved in, 50
personnel employed in, 51
software and multimedia design,
49
taxation, 5152
taxation of legal entities
corporate profit tax rates, 32
Index 249
land tax exemptions and

investment tax credits, 33
standard value added tax rates,
32
tax benefits, 31
trade and public catering
infrastructure
catering enterprises, 58
food price index, 57
food stuff prices, 55
international consumer brands,
57
market turnover dynamics, 59
quality of life, 5455
restaurants, 5960
retail facilities, 58
retail trade facilities, 55
turnover dynamics, 56
transportation infrastructure
airline passengers, 36
development, 40
hard surface roads, 3738
radial-ring road design, 37
rail transport density, 39
railway passengers, 39
retail gasoline prices, 38
road haulage, 38
road network density, 37
Moscow Railway Center, 39
Negotiation process, 141
PickPoint, 103
Potential support ratio, 124
Power distance, 132
Power Distance Index (PDI), 129
Presentations, 159
Profits tax, 9495
Public sector marketing, 72
Regional analysis
Belgium, 2
Central Federal District, 6, 9
comparative investment profiles,
1316
economic characteristics, 68
exporting and importing regions,
1011
federal administrative subjects, 23

federal districts and economic
regions, 34
foreign direct investment, 5
Japan, 12
market dynamics variation, 2
military district, 4
Moscow City Investment Agency
(see Moscow city investment)
regional governance and
development, 5
Russian Investment Agency, 1213
Singapore, 2
total foreign portfolio investment,
9
WAIPA, 5
World Investment Report, 9
Religion, 126127
Russias national profile
Hofstedes cultural dimensions
comprehensive framework,
128129
Individualism versus
Collectivism, 129130
masculinity versus femininity,
130
Power Distance Index (PDI),
129
Uncertainty Avoidance Index,
130
pragmatic vs. normative approach
GLOBE study, 133138
individualism, 132
indulgence, 131, 133
long-term orientation, 133
masculinity, 132
power distance, 132
uncertainty avoidance, 133
World Values Survey, 138140
Self-expression values, 139
Skill development
cases, 207242
cross-cultural negotiations,
191194
export market research, 199202
International Market Research
in the Health and Wellness
Sector, 195196
250 Index
international market strategy,

182185
joint venture manufacturing
partnership, 203204
location selection, 180181
strategic assessment and
organizational logistics,
186190
take-home final exam assignment,
205206
tariffs, trade barriers and leads,
197198
Small- and medium-sized enterprises
(SME), 73
characteristics, 79
economic activity, 82
financial instruments, 8384
GEM reports, 76, 8485
limitations, 80
microenterprises, 80
product innovation/competitiveness
index, 8687
regional structure, 83
revenue growth, 8283
Russia vs. European countries, 81
sectorial/industrial structure, 81
structural renewal, 85
technological innovations, 80
turnover, 80, 82
Small business and entrepreneurship
early-stage entrepreneurial activity,
77
e-commerce, 7172
enablers and constraints, 78
entrepreneurial environment, 78
foreign investment and technology
transfer, 73
free market developments, 75
Global Entrepreneurship Monitor
report, 76
international trade and foreign
direct investment, 72
large corporations, 7273
large-size foreign-based
corporations, 7374
restrictive legislation and
constraints, 75
small- and medium-sized
enterprises, 73
characteristics, 79
economic activity, 82
financial instruments, 8384
GEM reports, 76, 8485
limitations, 80
microenterprises, 80
product innovation/
competitiveness index, 8687
regional structure, 83
revenue growth, 8283
Russia vs. European countries, 81
sectorial/industrial structure, 81
structural renewal, 85
technological innovations, 80
turnover, 80, 82
state-owned enterprises, 74
TACIS program, 75
total entrepreneurial activity key
indicators, 77
Social welfare taxes, 96
Stalins harsh prosecution system, 120
Starbucks, 211213
State-owned enterprises (SOEs), 74
Sukhoi Superjet 100, 219238
Survival values, 139
Targeted Investment Program of
Moscow, 40
Technical Assistance to the
Commonwealth of
Independent States (TACIS)
program, 75
Total dependency ratio, 124
Uncertainty avoidance, 133
Uncertainty Avoidance Index (UAI),
130
Value added tax (VAT), 95
World Association of Investment
Agencies (WAIPA), 5
World Intellectual Property
Organization (WIPO), 98
World Investment Report, 9
World Values Survey (WVS),
138140
Youth dependency ratio, 124

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Doing Business in Russia

Doing Business in Russia

Doing Business in Russia: A Concise Guide, Volume II

enigmatic and challenging. The book strives to serve as a concise guide in

Main Points in This Chapter

DOING BUSINESS IN RUSSIA

Russias Regional Subdivisions and Economic Profiles

Figure 1.1 Federal subjects of Russia

can be categorized into six types: 22 republics, 9 krais (large districts,

Each federal district is administered by a Presidential envoy. Federal districts

DOING BUSINESS IN RUSSIA

1. Central economic region

Figure 1.2 Economic regions of Russia

districts,6 and a multitude of municipal divisions. Additionally, there are

DOING BUSINESS IN RUSSIA

attractiveness of Russian regions may vary widely in terms of their

Privolzhsky (Volga) Federal District

City of St. Petersburg

South Federal District

Northwest Federal District

North Caucasus Federal District

Central Federal District

Regional output by extracting and

Far East Federal District

Siberian Federal District

Tyumen Oblast without the autonomous

Yamalo-Nenets Autonomous Okrug

Khanty-Mansi Autonomous Okrug-Yugra

Tyumen Oblast. Including:

Ural Federal District

Regional output by extracting and

monetary compensation stood at 38,598 rubles or 63 percent of the City

Tyumen Oblast. Including:

Ural Federal District

Privolzhsky (Volga) Federal District

North Caucasus Federal District

South Federal District

City of St. Petersburg

Northwest Federal District

Central Federal District

Imports Exports Imports

With the countries

With the countries of

Far East Federal District

Siberian Federal District

Tyumen Oblast without the autonomous okrugs

Yamalo-Nenets Autonomous Okrug

Khanty-Mansi Autonomous Okrug-Yugra

DOING BUSINESS IN RUSSIA

USD of foreign direct investment inflows), each of the federal districts in

DOING BUSINESS IN RUSSIA

Table 1.3 Investment profiles: City of Moscow, City of St. Petersburg,

Key macroeconomic indicators

GRP dynamics, percent versus previous

Registered unemployment rate, percent of economically

Foreign direct investments, USD million

Shortest highway distance to the nearest

Transportation and energy infrastructure

Domestic market size

Retail sales turnover,

DOING BUSINESS IN RUSSIA

Table 1.3 Investment profiles: City of Moscow, City of St. Petersburg,

Source: Invest in Russia (2016) www.investinrussia.ru/compare-four-regions?year=2015&region1