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Country Analysis Of Russia


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  • 1. International School Of Management Of Excellence
    Country Analysis
  • 2. Russia At A Glance
    Russia is the largest country in the world.
    Area:17,075 million km²
    Population:142.2 million
    GDP: 12074.5$
    Inflation: 13.3%
    Currency: Ruble
  • 3. CULTURE
    Music And Dance
    Media And Technology
  • 4. SPORTS
    Russians have been successful at a number of sports and consistently finish in the top rankings at the Olympic Games and in international competitions.
    Games that play in Russia:
  • Tourism
    Russia among the most popular tourist destination in the world.
    The country contains 23 UNESCO World Heritage Sites.
    Most popular tourist destinations in Russia are :
    • Moscow
    • 9. Saint Petersburg
    Having good places tourism department faces decline in the growth
    In the last ten years, foreign tourism to Russia dropped by 70%, and overall tourism in Russia dropped by 50%.
    In 2009 this is 11%
    In 2004 the profit from tourism was $24 million, which is barely 1% of country's GDP
    Labour code
  • 11. Labour Code
    Employer/employee relations are governed by the Labour Code and other special laws.
    Employment legislation makes it very difficult for the employer to dismiss an employee on disciplinary grounds.
  • 12. Employers
    In accordance with the Labour Code, an employer can be an individual or a legal entity
  • 13. UNIONS
    Union activity is regulated in accordance with the Federal Law on Professional Unions, their Rights and Guarantees of their Activities.
    Today, unions in Russia are becoming more active and wielding more power over employers.
    They are initiating collective negotiations and concluding collective bargaining agreements.
    Under the Labour Code, the employer shouldtake the opinion of the trade union into account beforeadopting certain internal regulations (i.e., internal policies) or dismissing trade union members
    Wages & salaries
    Employment contracts
    Working hours
    Paid holidays
    Equal opportunities
    Termination of employment
    Employee contributions
    Employers contribution
  • 16. COVERAGE
    Social and health security covers pensions, unemployment, maternity and child benefits, illness and other social services
  • 17. Employee contributions
    Employees currently do not pay Russian social taxes; employers make all contributions.
  • 18. Employers contribution
    Russian social taxes were substantially reduced from 1 January 2001. Currently, companies pay the following on employee compensation:
    Unified Social Tax
    Obligatory Pension Insurance
    Mandatory Accident Insurance
  • 19. Working culture of RUSSIA
  • 20. Political System
    The 1993 Constitution declares Russia a democratic
    federative state based on the rule of law and a republican
    form of government.
    The president is the head of stateand the prime minister is the head of government.
    The russian federation is fundamentally structured as a representative democracy.
    The federal government is composed of three branches:
  • BOP Chart
    Visa invitation letter
    Immigration authorities
    Russian consulate/Embassy
    Validity of passport
    Duration of visa process
    Business Visa
    Work Visa
    The currency of the Russian Federation is the Russian
    The ruble is sub-divided into 100 kopecks.
    The ISO 4217 code is RUB.
    Business and social etiquette
    Same level of people
    Hand shake
    Living conditions
    According to the latest Cost of Living Survey by Mercer Human Resource Consulting.
    The survey covers and measures the comparative cost of over 200 items in each location, including housing, transport, food, clothing, household goods and entertainment.
    • Business climate
    Economic policy
    Publicized programme of National Priority Projects
    • International Agreements
    Major international power
    UN security council’s member
    Member of G-8 group
    Successor of Soviet union
    • Legal Environment
    Resolution of disputes through state arbitration court
    Litigation process starts by filing a statement of claim
    • Russian legal system is based on statutory law
    rather than case law.
    • Main legal acts: the Constitution, federal constitutional laws,
    federal laws, presidential decrees, governmental regulations, and
    laws of regional constituents of the Russian Federation.
    • Priority to the rules made by international treaty.
    • 28. The Constitution recognizes norms of international law and international treaties and agreements with Russia as part of the domestic legal system.
    • Competition policy
    Federal Antimonopoly Service (FAS)
    A government regulator of market competition policy in Russia.
    Its objective is to ensure compliance with antimonopoly regulations
    set out in Russian competition law.
    The FAS has power to:
    prevent unfair competition;
    reduce competition;
    abuse of a dominant position
    .15% of profits will be charged as a penalty in case of violating competition rules.
    • Price controls
    Role of FAS in price controls
    • Patents Trademarks
    From 1 January, 2008, Chapter IV of the Civil Code of the Russian
    Federation came into force.
    Consequently, many of its provisions are similar to those in other
    industrialized countries.
    Examination of merits is required in case of patents.
    Legal protection of a trademark is provided on the basis of its official
    registration or under international treaties or conventions to which
    Russia is party.
    Introduction of the land code of the Russian federation in 2001.
    Introduction of “ One window system” to obtain technical & registration documents.
    Reclassification of land to another category in order to use agricultural land for other purpose.
    Advantage of “land code” to municipal authorities.
    Compliance with planning regulations.
    Securitisation of loans is also allowed in Russia.
    In general, Russian law neither imposes major restrictions
    on foreigners nor makes distinctions between foreigners,
    Russian legal entities with foreign interest and Russian
    legal entities/citizens in relation to ownership of land
    Improvement in corporate governance.
    Transparency index has increased, as given below in the chart:
    Transparent sectors:
    Telecom, food and retail sector.
  • 32. Continued
    • Low transparency in banking sector as compared to their international counterparts.
    • 33. Privately owned companies are more transparent.
    • 34. Russia also experienced an IPO boom in 2006 and 2007.
    • 35. Low transparency in Public companies.
    • Tips for exporters
    Responsibility of Russian company for custom procedure.
    Due payment of custom along with other requirements.
    Need to get license to import certain goods.
    Different Economic zones for custom benefits, like:
    Baikal Amur Mainline economic zone,
    East Russia economic zone
    Central-Northern economic zone,
    European Russia economic zone,
    Volga-Uralseconomic zone,
    Trans-Ural economic macro zone,
    South Russia economic zone,
    Non-Chernozemic economic zone,
    Siberian economic zone.
    Custom duty rates of few products, given below:
  • 37.
    When moving goods across the customs border of the Russian
    Federation, the following customs duties are paid:
    • Customs DutiesAccording to the Customs Tariff, import customs duties are levied as a percentage of the customs cost of goods and range from 0% to 30%.
    Alcohol is an exception; the duty is levied at 100%, but no less than 2 EURO, per litre.
    • Customs duties for customs clearance
    Customs duties for customs clearance of goods are charged in the currency of the Russian Federation at 0.1%.
  • 39. Continued
    • Customs duties for customs convoy of goods
    Customs duty payments for customs convoy are established on an agreed upon basis between the State Customs Committee and the Ministry of Finance of Russia.
    • Customs duties for storing goods
    Customs duty payments for temporary goods storage in warehouses are established on an agreed upon basis.
    • Customs Regulations for Individuals
    Goods that are not intended for use in production or commercial activities may be brought into Russia without duty if their total cost does not exceed 1000 USD and they weight no more than 50 kg. Russian citizens who have spent more than six months abroad may bring up to 5000 USD worth of goods duty-free into Russia.
    • Name of the areas, where improvement is required to make improved custom policies, are given below:
    Lowering of customs duty on imports of technological equipment;
    Simplification of the customs clearance process;
    Tighter customs control after customs clearance
    of goods;
    Further development of customs integration
    in the Commonwealth of Independent States.
    • Certain imports to Russia require permits, certification, licensesand other approvals. Theyshould be submitted to the customs authorities for clearance.
    • 42. Approval by (CFIA)
    • 43. CFIA veterinary certification
    • 44. Labeling should be in Russian text.
    • 45. Anti dumping duty
    • Russia applies import duties to most goods. These generally range from 5 % to 20% on ad valorem basis.
    • 46. Duty on foodstuff on the basis of their volume, weight & quantity.
    • 47. The customs valuation procedure is in conformity with the GATT/WTO principles.
    • 48. Currency in which duties will be paid.
    • 49. Shippers Export Declaration (SED).
    • 50. Transit goods are also exempt from custom.
  • Contd.
    • Base customs duty rates specified in the legislation apply to countries that have been granted Most Favored Nation status.
    • 51. Raw materials and handmade goods imported from “developing” and “least developed” countries.
    • 52. Exempt from customs duty:
    Transit goods
    Goods imported for personal use
    Humanitarian aids
    • Free trade agreement with (CIS) countries
    • 54. Name of the CIS countries are given below:
    Kyrgyzstan and
    These countries are not subject to customs duty with in this Customs Union.
    • Excise tax rates ranging from 20% to over 570% depend upon the goods such as alcohol, tobacco products, and luxury goods.
    • 56. Excise tax on automobiles.
    • 57. PAYMENTS
    The declarant or a Russian customs broker can perform the declaration of goods.
  • 58. IMPORT VAT
    • Most imports are subject to a value-added tax (VAT) 18%.
    • 59. A reduced rate is applies to basic foods, children's goods, educational books, and medicine.
    • 60. Products exempt from VAT.
    • 61. The VAT is applied on the total sum of the value of goods, customs duty, and excise tax.
    • Customs Code adopted in 2003.
    • 62. Advance declaration of cargo is possible.
    • 63. Customs processing fee.
    • Temporary import relief, when goods are authorized by
    custom authority.
    • Temporary import relief, when goods are not authorized by custom authority.
    • 64. Containers, pallets, commercial samples etc , comes under exemption category.
    • 65. In case of fixed assets.
    • 66. Only Person, which can reap the benefit of such reliefs.
  • CUSTOMS DUTIES INCENTIVES(Charter capital contributions)
    • Right to Customs authorities
    • 67. Type of assets
    • 68. Goods must not be excisable.
    • 69. VAT exemption.
    • 70. Imported with in the time frame.
    • Role of Inward processing (IPR) in duty exemption.
    • 71. Free from customs duty and import VAT.
    • 72. IPR must be authorized by customs.
    • 73. Only company, who can apply for IPR.
    • (SEZ) with a free customs regime.
    • 74. Goods produced in SEZ for export purpose.
    • 75. When foreign goods are subsequently released for free circulation.
    • 76. Goods imported in the SEZ but not processed and re-exported.
    • 77. Name of few SEZ are:
    East Russia economic zone, Central-Northern economic zone,
    European Russia economic zone, South Russia economic zone.
    • Location of ware houses.
    • 79. For temporary storage of goods at special warehouses.
    • 80. Maximum time period of storage.
    • 81. Duration for which storage can be extended.
  • Central Bank
    Principal Function is to protect the rouble and ensure its stability.
    Sole issuer of roubles.
    Manages most of state budget accounts.
    Collaborates on the domestic financial market with the Federal Insurance Supervisory Service and the Federal Service for Financial Markets
  • 82. Banking System
    Russian banking sector has developed rapidly in recent years.
    Russian banks have attempted to reposition themselves as retail or universal banks
    State controlled banks made the largest contribution to the aggregate financial result (48.4%), the share of large private banks was 24.7%, and foreign controlled banks accounted for 19.6%.
    Banks’ assets have increased, totalling USD 427.1 billion 09, top five banks control 44% of assets
    The return on assets in 2008 fell from 3.0% in
    2007 to 1.8%, and the return on equity was down from 22.7% to 13.3%
  • 83. Deposits of customers decreased from 78 billion rubles to 39 billion, quickly converted to foreign currency (depositors withdrew 42% of their deposits )
    Composition of residents’ expenditure was as follows: 74% in purchase of goods and service, 15% in compulsory payments and taxes, 0.3% in ruble saving, and 10.2% in foreign currency.
    Bad loans increased by 13 times.
    Banks themselves actively participated in the stock markets, Banks’ securities showed a loss of USD 3.7 billion
  • 84. Credit Crunch
    Banks reduces loan not only to enterprises but also to consumers (retail banking).
    Enterprises into bankruptcy.
    fall in demand for residences, offices, automobiles and other sectors.
    Economic Slowdown
    DUAL: Shrinking foreign borrowing and price down of export
    Three waves
    • Reduction of credit (production, employment)
    • 85. Decrease of export profits.
    • 86. Decline in the state budget
  • Return of Banking Sector
  • 87. Organizations Deposits faded
  • 88. Inter bank credit rate
  • 89. Risk Weighted Assets
  • 90. Foreign Exchange Reserve
  • 91. Inflation
  • 92. Unemployment
  • 93. Budget
    Federal budget deficit of 4.6%(as compared to surplus of 8.3% of GDP)
    - support the real sector, Financial system
    Gross capital formation contracted 55.4%
    Fixed capital investment declined 18.9%(Inc 16.5%)
  • 94. Expenditure
    Exp for stabilizing currency
    Except funds also
    For real estate.
  • 95. Money laundering
    Funds equal to or exceeds RUB 600,000
    Immovable assets is equal to or exceeds RUB 3,000,000
    Money transfers without opening an account collect originator’s name, VAT number, place of residence, and the date and place of birth
  • 96. Exports/Imports
    Exports declined 44.8% to $206.3 billion(2008)
    Exports increased 18% qoq(2009)
    Imports of machinery, equipment and transport vehicles declined 53.7%(they grew 58.4%.)
    Net exports increased 33.0% 2009 (they fell 28.4%).
  • 97. Supply side short(Sectors falling)
    Overall output fell
    18.4% construction sector, 14% in transport,
    5.3% in retail trade and 4% in wholesale trade.
    Industrial output declined 13.5%,
    Mining fell 3%
    Manufacturing sector, output was down 19.1%
    Agricultural output contracted 0.8% (it grew 9.6%)
  • 98. Key economic Indicators 2009
  • 99. Labour Market
    Employed fell by 2.4%
    (it rose 0.8%).
    Labour productivity
    declined by 7.6%
    (it increased 6.3%).
    Downfall more in
    Manufacturing than Service
    Real wage decreased 3.5%
    Unemployed increased
    to 7.6% from 6.2%(23% decrease)
  • 100. Exchange Rate
    ruble/dollar rate rose
    2.8% in 2009 Q3 as
    against 5.3% in Q2
    real rate of the ruble
    against the euro declined
    0.8% (it rose 3.6%)
  • 101. Some Rules for foreign currency
    Resident and Non-Resident companies and individuals can freely perform currency Transactions
    Russian residents’ use of foreign bank accounts is restricted
    Advance payments on certain import transactions
    Residents must draw up a transaction passport, supporting the legal basis for the currency transaction
  • 102. Leasing
    Market had grown by over 50% per year.
    No. of new deals fell 9.4%(RUB 605 billion)
    Cannot purchase or sale assets so leasing
    Can be of 25/50 yrs. etc.
    leasing companies’ portfolios stood at RUB 1.4
  • 103. Insurance
    The Federal Insurance Supervisory Service (FISS)
    Insurance Market Portfolio
    Property 33.3%, liability 2.4%, obligatory medical insurance 41.7%, third party motor liability 8.4%, life insurance 2.0%, personal lines 11.4% and other obligatory lines 0.8%
    786 insurance companies(Rosgosstrakh, Ingosstrakh, Sogaz)
    Law obliges insurers to separate life insurance from other types of insurance
    Small insurers have already lost their licenses
  • 104. Federal Service for Financial Markets (FSFM)
    maintain stability in the financial markets,
    make the markets more efficient and attractive to investors,
    increase market transparency and reduce investment risks
    conditions for issuing and trading securities
  • 105. Capital Market
    The Russian Trading System (RTS)
    leading stock exchange
    Calculates the RTS Index
    Used as an indicator
    The Moscow Interbank Currency Exchange (MICEX)
    Trading Bonds
    Organises stock transactions and foreign exchange trading
    Developing derivatives market
  • 106. security must be specifically recognised as such in the Russian Civil Code
    Registration of an issue usually takes about 30 days
    Equity securities may be offered to the general public
    open (public) joint-stock companies.
    closed joint-stock companies & limited liability
    Floating Shares 30% of the overall issued shares
    use of promissory notes for debt financing,
    Also can issue convertible bonds
  • 107. Accounting
    Russian Accounting Rules (RAR)
    International Financial Reporting Standards (IFRS)
    Some differences
    The concept of inflation accounting does not exist.
    Consolidated financial statements are treated as
    secondary to the stand-alone statutory financial statements
  • 108. Offices of foreign companies
    Rules existing in the Russian Federation (RAR);
    Rules existing in the country where the foreign legal entity is located.
    Maintain tax accounting under the rules prescribed by the Russian Tax Code
  • 109. Companies subject to statutory audit
    All open joint-stock companies
    Banks and other credit institutions, insurance companies, commodity and stock exchanges & investment funds.
    Annual sales exceeding RUB 50 million
  • 110. Tax system
    The Tax Code of the Russian Federation summarises the general tax principles, rights and obligations of taxpayers and tax authorities, description of taxes payable and other provisions.
    corporate profits
    tax rate 20%
    Final payment
    is due by 28 March.
  • 111. Tax treaties
    As of November 2008, Russia has signed and ratified 69 double tax treaties.
    Withholding taxes on interest, dividends and royalties are typically reduced by tax treaties
  • 112. Withholding taxes
    Accordance with the Tax Code, income received by a foreign legal entity and not attributed to a permanent establishment (PE) in Russia is subject to withholding income tax in Russia
    15% on dividends
    10% on freight income
    20% on some other income(royalties and interest. etc.)
    20% of revenue or 20% of margin (24% before
    1 January 2009) in relation to a capital gain
  • 113. Tax Rate
    Dividends received by Russian legal entities from Russian or foreign legal entities are taxed in Russia at a 9% flat rate
    15% tax rate is applicable to dividends paid by Russian legal entities to foreign legal entities
    -Invt- RUB 500 million
    -Own For at least 365 days
    Flat income tax 13 %
    Maximum property tax rate is 2.2%.
    VAT rate is 18%.
  • 114. Penalties
    Underpayment of taxes may result in a fine equal to 20% of the underpaid taxes
    Late filing of a tax declaration carries a penalty of 5% to 10% of unpaid tax per each month
    Failure to withhold tax may result in a fine of 20%
  • 115. Special economic zones (SEZ)
    Technical research, develop industrial Production, development of Russian tourism
    exemption from property tax and land tax, and exemption from customs duty and VAT
    reduced profits tax
  • 116. Legal Framework - FDI
    Foreign Investment law -1991
    First legal framework conducive to foreign investors
    The basic tenet of the code was national treatment for foreign investors.
    Law on Foreign investments in Russia 1999
    Elaborate framework to protect the rights of investors.
    Grandfather Clause - which protects the investor from unfavorable changes in the legal and tax regulation for a period up to 7 years.
    Resource Usage- Freedom from performance requirement or any commitment to use or export local goods.
    Labour laws- Freedom of employ any personnel of their choice regardless of their nationality
    Capital Flow – Unrestricted transfer of funds in freely convertible currencies
    In case of Expropriation- followed by adequate and prompt compensation
    Dispute resolution – between foreign party and host country referred to international arbitration without having to go thru local court system.
    Replaces old license regime with PSA contracts
  • 117. Foreign exchange controls
    • The currency controls are imposed on the transaction of both export and import type (these include transaction of capital).
    • 118. There are restrictions regarding the amount of foreign currency which could be kept on the bank account of the residents.
    • 119. Russian rouble is the only legal currency in the territory of Russia.
  • IPR- Russia
    Improved legal framework but suffers from problematic enforcement
    Member of Paris convention, Universal Copyright Convention, Berne convention and Geneva Convention.
    After joining WTO- abide by TRIPS, Copyright law, Trademark law, Patents
  • 120. Competition Regulation
    Governed by 1995 - Law on Competition and Limitation of Monopolistic Activity
    Level playing field for all players (investors)
    Setup Anti-Monopoly regulation
    (Difficult in country like Russia coming from completely Monopolistic markets)
  • 121. Restricted Sectors
    Investment is constrained when it comes to some fields of economy such as:
    • natural resources- foreign ownership can not be more than 11 per cent of the total capital;
    • 122. banking- can not own more than 12 per cent of total banking capital.;
    • 123. communication;
    • 124. insurance- foreign participation in the insurance sector can not exceed 15 per cent;
    • 125. aerospace- can not exceed 25 per cent of the total capital;
    • 126. electric power- not more than 25 per cent;
    • 127. defense related industries;
    • 128. large scale construction projects;
    • 129. Transportation;
  • Special Approvals
    Foreign investors will need a prior approval in case of :
     to ventures with more than 50 percent of the total share capital ;
     the amount of money which is more than 50 million Russian roubles (in case the amount of investment exceeds 100 million Russian roubles – there is an additional registration is required);
     to projects related to the Russian defense industry (however, in some cases this investment could be prohibited by legislation);
     to natural resource exploitation;
  • 130. FDI Inflow In Russia – Sector-wise Breakup
    The food industry has attracted the highest number of FDI projects - 45 projects, the energy sector is by far the biggest recipient – accounting for $10 billion in 2002-2003. Other major sectors include wood products ($1 billion), consumer goods ($95 million), automotive OEM ($670 million), and metals/mining ($552 million) sectors.
  • 131. Risks Investors’ opinion
    Source: questioning of foreign investors «Russia as an object of investments», polledin 2009 г. byFIAC
  • 132. 88
    Russia: The Transition Economy
  • 133. Russian Transformation 1989-2000
    Fall of Soviet union in 1991
    Transformation from socialism, central planning, government control to market determined prices & privatization
    Complex transition process of repositioning itself in the global trading system.
    To create a functioning market economy out of the ashes of the communist regime.
  • 134. Economic slump and Political Turmoil
    GDP contracted 54%, industrial activity reduced by 45%
    Yeltsin Era 1991-1999
    Source: Russia Economic Survey – May 2007 ( US- Russia Business Council)
  • 135. Putin’s Russia – 2000 to 2008
    On average GDP growth rate of 6.5% since 2000 (primarily due to high oil prices )
    New era of political stability to push forward economic reforms
    Source: Russia Economic Survey – May 2007 ( US- Russia Business Council)
    • Steady BOP until amidst of 2008
    Mineral resources-64.7%
    Metals & gems-16.1%
    Chemical & rubber-5.9%
    Machinery equip. & transport vehicles-5.6%
    • Main trade partners:
    Germany, Netherlands, Italy, China, Ukraine, Belarus, Turkey, Poland, Finland, US, Japan, South-Korea, Kazakhstan.
    Russian economy is attracting increasing volumes of FDI as it continues to grow.
    Poor performance on economic indicators
    the faltering privatization process
    ageing population
  • 138. CONTINUED………….
    declining population,
    Widespread corruption
    An oppressive and inefficient bureaucracy
    Income inequality
    weak rule of law
    Environmental degradation.
    Foreigners must have a valid visa to travel to Russia.
    All foreigners entering Russia must register within 72 hours of arrival
    Younger Russian business people generally speak English
    Russians have a different attitude towards official documents - they do not place as much significance on them.
    Russia is one of the world’s largest energy producers, with oil and gas sales accounting for 70 percent of exports to the Baltic states.
    Russia is now the world's third-largest exporter of steel and primary aluminum.
    The increasing purchasing power of the population has been the main driver behind the recent rapid growth of Russia’s retail and consumer sectors.
    Geology Surveys
    Complex Program of Deposit Development
    Transportation and Installation of Mining Equipment
    Coal Extraction
  • 141. Market Challenges
    Long Investment & Manufacturing Cycle
    Geological Risks
    Territorial Location
    High Capital Intensity
    Strong Dependence on Export Trade.
    Equipment Supply
    Global Competition
    Strong Variety of Mining Conditions
    Industry Pressure
    Low Growth Rates
    Low Return on Investment
  • 142. TIPS…….
    Business Concentration
    Manufacturing of Products with High Added Value
    Decreasing of Costs
    Own Transport
    Construction of Enrichment Facilities
    Usage of IT
    Russia has one of the most dynamic retail markets in the world. This sector has become more westernized over the last decade due to the increased spending power and demand for a variety of designer and consumer goods.
    Most of the consumer goods are imported
    Few players
    Stable growth
    Soviet union never strong in producing consumer goods(cost & quality)
  • 144. Financial difficulties
    Inefficient internal distribution
    Most of the consumer goods are imported
     high Russian imports duties and other related taxes and costs, imported goods are now relatively expensive, while locally-manufactured products are far more competitive.
    There is a marked tendency for foreign companies to manufacture in Russia if they can.
    relatively easy and inexpensive to build a brand name presence in the Russian market.
    Major Western brands like Prada, Hugo Boss and MaxMara have entered the market and created strong competition
    finding the right price/quality mix, distribution, credit and delivery terms, etc.
    Payment and delivery is difficult(infrastructure,high transportation cost,lack of local regional wholesalers)
    Russia is known to have world largest natural gas reserves, and Gazprom presently produces 84% of Russian and over 17% cumulative global gas output.
    The country’s gas resource development programme to 2030 targets 23.5 Tcm cumulative reserves addition.
  • 147. BENEFITS
    Decreased export duties
    Differentiated MET (Mineral Extraction Tax) rates depending
    on the complexity of field geology.
    Improved capital investment incentives (accelerated depreciation
    Increased tax-deductible portion of MET
    Improving contractor performance
    Optimization of inventory and infrastructure costs
    Optimization of supply chain and transportation costs
    Staff optimization and outsourcing
    Implementation of energy saving technology
    Optimization of costs related to repair of wells
    and surface equipment
    Growing field development costs
    Inefficient industry legislation
    Lack of skilled workforce
    Difficulty of access to the natural gas market
    The Russian communications and information technology sectors have been developing rapidly and, according to the preliminary estimates of the Ministry of Communications and Mass Media.
    the telephone systems in 60 regional capitals have modern digital infrastructures; ;;
    cellular services, both analog and digital, are available in many areas; in rural areas ,the telephone services are still outdated, inadequate, and low density.
    Russia had a total of 187.8 million mobile subscribers, an increase of 15 million from a year earlier.
    Hardware is the major IT segment, accounting for more than 50% of the sector’s revenue
    Demand for main line service remains unsatisfied
    In rural areas, the telephone services are still outdated, inadequate, and low density
    National players,
  • 152. Thank You