Doing business in Russia is not easy. Nevertheless with its wealth of natural resources and an inexpensive, educated labour force, Russia continues to attract big business. We offer some tips on how to go about business dealings in Russia.

Russian's may not be punctual, but they expect foreigners to be on time.

To be a success in the business world you need to understand Russia and the Russians. It is good to remember as once said by a writer from Moscow, "Nothing good ever happened in this country and that is what makes it so interesting."

The endless metamorphosis

Russians can heave a sigh of relief that the days of endless queues and deficits, when people didn't buy things but sourced them through contacts, when items were collected from the backdoor's of shops lined with empty shelves, are now a thing of the past.

Today shopping malls, designer shops and over stocked supermarkets are a common sight in cities like St Petersburg and Moscow. Hypermarkets and cash and carries line the outskirts of the cities.

The key to success

Knowing the Russian soul is the key to survival and success in Russia. Sensitive and imaginative, the Russians have demonstrated a patience that permits survival under unbearable circumstances. Russians are impressed by size and numbers which is reflected in the grand scale of their achievements, whether in the arts, sciences or the military. If you can prove to be the leader, the Russians are great implementers who appreciate complete faith and commitment.

The rules in business

According to one HR manager: "In Russia daily work conditions can be compared to a Jungle where you really don't know what can fall on your head in the next minute."

• Personal and corporate security is a major issue in every city. Background checks of employees and subcontractors, whether local or foreigners living in Russia are critical.
• Reimbursement of business losses, legal remedies for fraud and recovery of damages of any kind are almost non-existent. It is good to use Russian legal counsel for safeguarding your interests. Laws governing intellectual property are in their infancy.
• Business is hierarchical, so find out who's who before a meeting and do business with the decision makers. Business cards are essential.
• Russians are addressed by their name and father’s name carried by all Russians rarely by the family name. For example - Alezander Petrovich - which translates literally to Alexander son of Peter.
• Russians like direct talk. It is good to underline the profitability factor at an early stage of the meeting but remember they consider too much compromise as a sign of weakness. Often the final deal is not final and you may strike a better bargain by holding out a bit more. When a deal is struck, it is often sealed off with a glass of vodka, better not to refuse.
• Punctuality is not a strong point of the Russians, but they expect foreigners to be punctual.
• When dealing with bureaucrats patience is a virtue. In government offices, small gifts and money can work wonders. It is important to know how the official and 'unofficial' systems work.
• Corruption and petty theft is rampant and often justified, even amongst company employees. It is good to be cautious.
• An expat needs to be flexible with his Russian subordinates and colleagues. To get the best, motivate them, allow them to feel secure and voice their feelings. Sell your ideas to your Russian colleagues, don't force them.

Remember learning how to unlock the human potential of Russian employees is critical for a foreign firm to be successful in Russia. Sometimes the company atmosphere, non-monetary benefits and a guarantee of a stable future is more important for a Russian than the salary.

Etiquette and social customs

Hospitality is a Russian virtue and at home you see a very different side of the Russians you know at work.

It is an honour to be invited to a Russian home.

• Bring a gift when invited. Wine, cake, chocolates and flowers are appreciated. Flowers should be given in odd numbers and avoid yellow roses, which are a sign of separation.
• Don't shake hands or kiss across the threshold of the doorstep it is considered to bring bad luck. Take-off your gloves before shaking hands. You might be expected to take off your shoes before entering the house.
• Both the guest and host are expected to dress well.
• Traditionally a guest will be directed to a table laden with food and drinks immediately upon arrival, though the influences of "European" behaviour are becoming increasingly evident. At the table you are expected to participate actively in conversation.
• Be prepared to accept all food and alcohol, Russians enjoy their drinks, if you want to decline do so very tactfully.
• Russians have a particularly unique form of toasting. Take part and learn it, as you shall be expected to give toasts when entertaining.
• Often the host will talk about his travels, prized possessions or achievements. They might even bring out family albums. Be sure to show your appreciation. More often it is a way of opening up to a guest. Russians can take criticism and are great satirists.
• Dinners go on late into the night and there is often lot of drinking and loud talking. Don’t expect too much of formalities. Remember the best of the house is on the table, give it the due respect.

April 2004

Indian born expat Shayonti Misri, who currently lives in the Netherlands, lived and worked in Russia for 13 years.