As an Italian company, do you want to start a business in Russia? Both countries speak different languages then how can you get an insight into the Russian market? With the help of Russian translation services. The native language of the foreign country will help you in understanding the market dynamics and consumer behavior of the Russian people. In this way, you can devise a business strategy that resonates with the Russian market.
How to Start a Business in the Russian Market?
Why consider Russia to start a business? Italian exports are expected to increase by 2 bn euros and the best part of Russia is that it provides a conducive environment for Italian business expansion. Moreover, Russia is also considered the 13th marketplace for Italian exports.
Russia is providing many lucrative opportunities to different Italian companies like energy, renewable mechanical engineering, petrochemicals, jeweler, and luxury industries and oil and gas companies. Apart from these opportunities, the potential risk of doing business in Russia is 59 out of 100. Moreover, it is ranked at 131 in corruption.
Therefore Italian entrepreneurs must know the risk associated with starting a business venture there. They can understand all the risk factors effectively with the help of Russian translation services.
Branch, Subsidiary and Joint Venture in Russian Market
When trying to establish a business in Russia, there are many viable options to follow. The first option is to open a branch in Russia. The advantage of this option is that Italian companies don’t have to face currency restrictions problems and there is an easy outflow of money in the organization.
While following the branch structure will make your business a separate entity. Moreover, the parent Italian company is accountable for all the operations. To remove all the communication barriers, the Russian branch must communicate with the parent company in the Italian language. Therefore, for this,
they must go for Italian translation services.
The best part of Russia is that they don’t set rules regarding the internal governance structure of the branch for globalization. In the branch structure method, it is not necessary for the branch to consolidate their finance report, unless many branches are working at different locations of Russia. Each branch of the company is operated as a separate entity.
Another business structure that Italian companies can pursue are subsidiaries. With this structure of subsidiaries, the organizations must face currency restrictions. The organization also must abide by Russian contract formalities.
On the other hand, the current flow is easy to manage. For this, the organizations just must develop financial documents that can depict the inflow and outflow of the money. Another thing that companies must follow is the rules regarding corporate governance. This structure also makes the subsidiary a separate legal entity.
Another option to start a business in Russia is a joint venture. It is like a subsidiary business process. The currency restriction is there and it is consider a separate entity like a subsidiary. As a subsidiary or a joint venture, if you need to communicate with the parent Italian company then you should communicate with them in the Italian language. For this the best option is for Italian translation services.
If Italian businesses want their employees to work in new Russian subsidiaries of joint ventures then they must go through a process of making work permits for them. In certain cases, a work permit is not require such as students that want to work with their studies. However, in most cases, proper documentation is required to start work in Russia.
There are two types of work permits. One is for Italian residents who are eligible for regular work. The other one is a highly qualified specialist work permit. This work permit is for foreign nationals that are hire on the Russian payroll. If you have a highly qualified work permit then it will give you many benefits.
You don’t have to go for a medical check-up and your visa can be processed in only 14 business days. Moreover, you just must renew the work permit after every three years. On the other hand, if you have a regular work permit then you must go for medical testing, your visa will take a long time to process. It can be from three to five months. Moreover, if you want to renew your visa then you must wait for twelve months.
To enter a Russian market, many organizations must follow import substitution policies and the Russian localization process. There are two parts of localization and import substitution. The first one deals with public procurement. It refers to the products that are made in Russia.
The other one deals with localized factors so they charge the products up to 50% of the competitors’ prices. Products that are taking this leverage are automotive, agriculture, medical technology, radio electronics, special vehicles, and pharmaceuticals.
Apart from public procurement, the government is also providing subsidies for purchasing agriculture and technological items. The industries that are benefiting from subsidies are automotive, machinery and agriculture.
English Proficiency in Russia
To make your business globally successful in Russia, you must communicate with foreign stakeholders in the English language. According to the Rozmiar research, only 30% of Russians can speak English. What about 70%. For this, you must take the assistance of English translation services.
Entering a foreign market is not an easy task. Therefore, tapping a Russian market is also very challenging. However, if these challenges are handle effectively then chances of success are significant. As an Italian entrepreneur, the challenges should not stop you from getting benefits from such a lucrative market. Read more