Russia has experienced steady GDP growth and large foreign direct investment inflows in recent years. Key sectors of the Russian economy include retail, manufacturing, natural resources, and real estate. The government has established special economic zones and tax incentives to attract more foreign investment. Major trading partners with Russia include China, Germany, and other European and Asian countries. Russia aims to further improve its business environment and ranks highly in sectors like oil/gas, metals/mining, and machinery.

1. Oryx Business Intelligence
Oryx Business Intelligence
Business Environment - Russia
Published: August 2013

2. Oryx Business Intelligence 2
Why Russia
• GDP growth of 3.4% in 2012
• FDI recorded at USD 51.4 billion in 2012, or a total of
USD 356.8 billon in years 2005-2012
• In accordance to the World Bank ranking Russia is
ranked:
• ‘High income level country’
• 8th largest economy in the world
• 5th largest economy by purchasing power
parity in the world
• The Customs Union with Belarus, Kazakhstan and
Russia
• Advanced information technology and retail sectors
• Extensive expertise in aviation, machinery,
automotive, space and agriculture industries
• Favorable environment and resource for the
manufacturing and trade/ retail activity
• Cheap supply of raw materials, abundant water
resources
• A presidential decree issued in May 2013 states that
Russia must be in the top 20 in the Doing Business
ranking by the year 2020
The Information Technology and Retail
sectors are the fastest growing segments
of the Russian economy
Core AdvantagesThe Moscow City

3. Oryx Business Intelligence 3
Investment Environment – Russian Federation
According to the Ernst & Young's European
Investment Monitor 2012, Foreign Direct
Investment (FDI) inflow in Russia is
Positioned for growth
19 percent of international investors perceive
Russia as one of the most attractive global
regions in 2012, an increase of 8 percent in
2012 is the largest investor attractiveness to
invest increase globally
Investors already present in Russia continue
to demonstrate their confidence in the
Russian market. Nearly 80 percent of these
investors plan to increase or maintain their
operations in the country
Foreign investment in the capital slumped 34
percent in 2012
Russian Investment Environment Global Investment Trend 2006-12
Source: Oryx Research, Ernst & Young EU Investment Monitor 2012

4. Oryx Business Intelligence 4
Economy Dynamics – Russian Federation
Retail Sector: Russia is the second largest
Retail market and the fastest growing market for
luxury goods in Europe. Russia has around 16.5
million square meters of retail space. The
Russian Retail sector is one of the most
developing sectors in the economy with Russians
spending around 60 per cent of pre-tax income
on retail goods - the highest spent level in
Europe.
Manufacturing Sector: Russia has a developing
Manufacturing sector which is the second largest
sector in Russian economy. Manufacturing in
Russia include aircraft, automotive, defense,
electronics, railroad and space industries.
GDP breakdown by Sector, 2012, % Russian Economy
Source: Oryx Research, Ministry of Economic Development
0 5 10 15
Fishing
Hotels and Restaurants
Education
Utilities
Healthcare and social services
Agriculture, Hunting and Forestry
Finance
PA and military security
Construction
Transport and Communication
Natural Resource Extraction
Real Estate
Manufacturing
Retail, Wholesale and Repair Services
Infrastructure Sector: Russia is planning to invest around US$ 380 billion in infrastructure sector
projects by 2020. The investment is projected to be formed from state budged and public-private
partnerships. Russia has a developing transport network which includes more than 120.000 km of railway
roads, 1 million km of roads and highways, 230.000 km of pipelines and 100.000 km of inland motorways.
Russian transport network needs modernization, especially roads and highways.

5. Oryx Business Intelligence
0 10000 20000 30000 40000 50000
United Arab Emirates
United States
Saudi Arabia
Turkmenistan
Qatar
Iran
Russia
CU M in billion
5
Economy Dynamics – Russian Federation
Real Estate Sector: Russian real estate
sector is one of the fastest growing sectors in
Russian economy. More than 37 million
square meters of real estate was built in the
first six months of 2013, representing a 7.6 per
cent growth pattern. The most profitable and
growing real estate is retail real estate, office
buildings and residential properties. The most
preferred regions for office real estate are
Moscow and St. Petersburg. The most
preferred cities for retail real estate and
residential properties are cities with a
population more than 1 million people.
Top World Gas ReservesRussian Economy
Source: Oryx Research
Natural Resource Extraction: Russian natural resources are among the largest in the world which
includes oil, natural gas, coal, iron ore, apatite, diamonds and other. Russia natural gas reserve is the
biggest in the world, and remains one of the largest producers and exporters of oil and gold.

6. Oryx Business Intelligence 6
Investment Environment – Russian Federation
According to the HSBC Trade Forecast, Russian trade is expected to perform better than the
world average during the next 15 years. Russian trade is mainly driven by exports of oil and
coal, and import of motor vehicles and technology equipment and gadgets.
World Trade, Annual Growth Rates, Russia Vs. World, 2012-2026 (f)
Source: Oryx Research, HSBC Trade Forecast

7. Oryx Business Intelligence 7
Why Russia
Russia’s RetailInvestment Environment
• The Russian jurisdiction recognizes generally
accepted principles of the legal regulation of
investments
• Both local and foreign investors are subject to
equal business conditions in relation to the
Russian Law of Investment and other Laws
• An investor is entitled to manage, use and dispose
his/ her possessions on his/ her own discretion. An
investor is entitled to transfer the profit owned by
him/ her into foreign country without any restriction,
except a tax payment as prescribed by the
Russian legislation
• Russia has 79 double-tax treaties providing a tax
benefit for foreign investors in Russia
Several Double Taxation Avoidance Agreements with Russia
The government sets an objective
improving Russia's investment
climate as a matter of urgency
A presidential decree issued in
May 2013 states that Russia must
be in the top 20 in the Doing
Business ranking by 2020
Australia EU Kuwait South-Korea
Brazil India Norway USA
Canada Israel Qatar Venezuela
China Japan Saudi Arabia Vietnam

8. Oryx Business Intelligence 8
Special Economic Zones and Incentives
Tax IncentivesSpecial Economic Zones
Major Benefits to Consider • Russia’s SEZs count 61 foreign companies in 2012, six
US companies came on board the same year. General
Motors invested US 180 million, 3M – US 30 million,
and – US 75.4 million.
• The tax incentives alone would have influenced the
decision makers to operate in SEZ: 3M will pay 2 per
cent for the first five years of profit-making operations,
instead of the standard rate of 20 per cent.
• Other privileges are provided to Alabuga: Given a
minimum investment of US 3.8 million to operate in the
zone, it will be exempted from the VAT and import
duties on equipment, on which, Denmark's Rockwool,
for instance, already saved US 12.6 million.
Foreign Players in Russia’s SEZ
Innovation zones: Dubna, Zelenograd, St.
Petersburg and Tomsk SEZ
Industrial zones: Alabuga, Lipetsk and
Togliatti SEZ
Tourist zones: Baikal Haven, Baikal Gates,
Altai Valley and the Turquoise Katun SEZ
Logistic zones: Ulyanovsk Vostochny and
Sovetskaya Havan SEZ
- Comfortable administrative procedures
- Federal and regional government support
- Tax benefits
- Free customs zones
- No connection fees
- Logistics terminals
- Customs terminals
SEZ Russia
Profit tax, % 2-15.5 20
Social security taxes, % 14-30 30
Property tax, % nil 2.2
Land purchase price, %
4-50 (cadastral
price)
100 (market
price)

9. Oryx Business Intelligence 9
Fastest Growing Export Sectors – Russian Federation
Russia’s Fastest Growing Export Sectors 2012 - 2016f
Source: Oryx Research, HSBC Trade Forecast

10. Oryx Business Intelligence 10
Fastest Growing Import Sectors – Russian Deferation
Russia’s Fastest Growing Import Sectors 2012 - 2016f
Source: Oryx Research, HSBC Trade Forecast

11. Oryx Business Intelligence 11
Logistics Network
Logistics JunctionLogistics Network
• Railway links between Russia and Lithuania,
Finland, Ukraine, Belarus, Georgia,
Azerbaijan, Kazakhstan, Mongolia, China,
North-Korea and Poland
• High-speed railway, currently being
expanded
• Widespread sea network. Direct link to the
Black Sea, the Sea of Azov, the Baltic Sea,
the Barents Sea, the White Sea, the Sea of
Japan and the Caspian Sea
• Developed logistics network: rail, sea
and sky
• Rail junction between Europe and Asia
• The shortest way from Europe to Asia
Train Network
• The world’s second largest railway network
• Trans-Siberian Railway - the largest railway
line in the world
• Trans-Eurasia logistics – Russian and
German joint venture is operating freight
trains between Germany and China via
Russia

12. Oryx Business Intelligence 12
Registering Business and Tax Environment
Tax EnvironmentTypes of Business Entities
Limited liability company
• Minimal capital – 10,000 RUB (USD 310)
• Min number of founders – 1
• The shareholders are liable to the amount of
their individual capital contribution
Joint-stock companies
• Minimal capital – 10,000 RUB (USD 310)
• Min number of founders – 1
Branch
- is a subdivision of a foreign legal entity that can
conduct commercial activity.
Accreditation fees: USD 4,100.
Accreditation bodies charge a processing fee of between
USD 500 and USD 2,000 (from one to five years of
accreditation).
Representative office
- is a subdivision of a foreign legal entity that
represents company. Commercial activity is not allowed.
Accreditation fees:
1 year – USD 1,000
2 years – USD 2,000
3 years – USD 2,500
The standard corporate income tax – 20%
• Reduced to 15.5% in some regions
Standard value added tax (VAT) – 18%
The general personal income tax
– 13% for residents
– 30% for non-residents
Basic social security rate for employers
– 30% (salary is under USD 17,579)
– plus 10% of amount exceeding USD
17,579
15% is applied for dividends paid to non-
resident company
20% on interest
20% on royalties
Withholding Tax Rate

13. Oryx Business Intelligence 13
Tax Rates – European Countries
Statutory Tax Rates And Standard VAT Rates, EU Countries And Russia, 2012, %
Dividends paid 15%
Interest paid 20%
Withholding Tax Rates To Non-Resident Entity
No Country
Corporate Income
Tax
VAT
Personal Income
Tax
1 France 36.1 19.6 46.8
2 Malta 35.0 18.0 35.0
3 Belgium 34.0 21.0 53.7
4 Portugal 31.5 23.0 49.0
5 Italy 31.4 21.0 47.3
6 Greece 30.0 23.0 49.0
7 Spain 30.0 18.0 52.0
8 Germany 29.8 19.0 47.5
9 Luxembourg 28.8 15.0 42.1
10 Norway 28.0 25.0 40.0
11 Sweden 26.3 25.0 56.6
12 Denmark 25.0 25.0 55.4
13 Netherlands 25.0 19.0 52.0
14 Austria 25.0 20.0 50.0
15 Finland 24.5 23.0 49.0
16 United Kingdom 24.0 20.0 50.0
17 Estonia 21.0 20.0 21.0
18 Hungary 20.6 27.0 20.3
19 Slovenia 20.0 20.0 41.0
20 Iceland 20.0 25.5 31.8
21 Russia 20.0 18.0 13.0
22 Czech Republic 19.0 20.0 15.0
23 Poland 19.0 23.0 32.0
24 Slovakia 19.0 20.0 19.0
25 Romania 16.0 24.0 16.0
26 Latvia 15.0 22.0 25.0
27 Lithuania 15.0 21.0 15.0
28 Ireland 12.5 23.0 41.0
29 Bulgaria 10.0 20.0 10.0
30 Cyprus 10.0 17.0 38.5

14. Oryx Business Intelligence
Contact Details
www.oryx.lt/ www.oryx.eu
Contact Us
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Email Ionna@oryxme.com / info@oryxme.com
Tel +792 (68) 512186
Vadim Berets
Email
Vadim.berets@oryxme.com / info@oryxme.com
Tel
+792 (50) 771801

15. Oryx Business Intelligence
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