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The Key commandments for doing business in Russia

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Russia possesses many opportunities, being the world's largest country in terms of territory, possessing vast natural resources, having a population of over 150 million people, having had one of the world's fastest GDP growth rates of 7.5% from 2001-2005, and having less competition in some industries than is the case in many countries due to the economic transformation Russia is undergoing. However, Russia also has a dynamic, unique, challenging and sometimes difficult to understand business environment that has caused problems for many foreign firms. As a result, it is risk rather than opportunity that many associate with Russia. There is no denying that doing business in Russia is not for the faint hearted. However, the difficulty involved in understanding Russia's business environment can also be an advantage as it serves as an entry barrier that assists those who enter and learn how to operate effectively to reap higher returns. Based on interviews with executives from 36 foreign firms operating in Russia and supplemented by our extensive experience in Russia as executives, consultants, executive trainers and researchers over the last fifteen years, this article suggests eight commandments that will enable foreign firms to avoid mistakes and skip the trial-and-error learning many of their predecessors have had to go through and achieve success in Russia more rapidly. Indeed, this article suggests that risks can be mitigated and Russia presents good opportunities for skilfully designed foreign investment projects that take into account local specifics.

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