Loading presentation...

Present Remotely

Send the link below via email or IM

Copy

Present to your audience

Start remote presentation

  • Invited audience members will follow you as you navigate and present
  • People invited to a presentation do not need a Prezi account
  • This link expires 10 minutes after you close the presentation
  • A maximum of 30 users can follow your presentation
  • Learn more about this feature in our knowledge base article

Do you really want to delete this prezi?

Neither you, nor the coeditors you shared it with will be able to recover it again.

DeleteCancel

Make your likes visible on Facebook?

Connect your Facebook account to Prezi and let your likes appear on your timeline.
You can change this under Settings & Account at any time.

No, thanks

Doing business in Russia

No description
by

fady danial

on 11 June 2014

Comments (0)

Please log in to add your comment.

Report abuse

Transcript of Doing business in Russia

Business Environment
Starting A Business
Registration Properties
Business Environment
Starting Business
Registration Property
Business Environment

Azerbaijan
The Law on Protection of Foreign Investment and the Law on Investment Activity , collectively the “Foreign Investment Laws”, provide the legal framework for foreign investment in Azerbaijan.
Foreigners can invest in a business venture in Azerbaijan in a number of ways, such as:
• Establishing a fully owned subsidiary
• Acquiring shares in an existing company
• Establishing a joint venture with Azerbaijani companies and individuals
• Entering into other acceptable forms of investment agreements

Types of business presence

• Open and closed joint stock companies (JSCs)
• Additional and limited liability companies (LLCs)
• General and limited partnerships

Russia

Russian Federation stands at 88 in the ranking of 189 economies on the ease of starting a business.
starting a business in Russia requires 7 procedures, takes 15.0 days, costs 1.3% of income per capita and requires paid-in minimum capital of 1.2% of income per capita.

In 2014, Russia made starting a business easier by abolishing the requirement to have the bank signature card notarized before opening a company bank account.

Russia

Registering property in Russia requires 4 procedures,

takes 22.0 days and costs 0.1% of the property value. Russian Federation stands at 17 in the ranking of 189 economies on the ease of registering property.


In 2014, Russia made transferring property easier by streamlining procedures and implementing effective time limits for processing transfer applications.

Azerbaijan

Starting a business there requires 3 procedures, takes 7.0 days, costs 1.0% of income per capita and requires paid-in minimum capital of 0.0% of income per capita. Globally, Azerbaijan stands at 10 in the ranking of 189 economies on the ease of starting a business.

In 2014 the country has major reforms that made starting a business a lot easier by setting up one stop shop for completing registration and making it free registration online and eliminating pregistration formalities.

Azerbaijan

Registering property in Azerbaijan requires 4 procedures, takes 11.0 days and costs 0.5% of the property value. Globally, Azerbaijan stands at 13 in the ranking of 189 economies on the ease of registering property.

2009 Azerbaijan introduced a new unified registry reducing the number of procedures from 7 to 4. The State Register Service also introduced the option of expediting 2 out of 4 procedures, it is now possible to register property in 11 days

Doing business in Russia & Azerbaijan
2013
2014
Azerbaijan
Russia
ABSTRACT

Russia’s economy is growing at a very fast pace and it has an enormous potential for the international enterprises. Although Russian market has a huge potential for international enterprises but at the same time it has challenges and pitfalls that need to be addressed before getting into the Russian market. Often international enterprises fail in Russia due to the reason that they are not fully aware of the challenges and difficulties of the market.

Azerbaijan is a country with wide range of investment opportunities and is undoubtedly one of the most attractive destinations for foreign direct investments (FDI) in the region.Baku is the centre of Azerbaijani economy and the home for most of Azerbaijan's industrial enterprises. Petroleum extraction and refining, metallurgy, aluminium processing, petrochemicals, chemical production is located close to this city and its satellites

The aim of this report is to identify the main challenges of the Russian and Azerbaijani markets that
MNCs can face while entering their markets and also how to compare between the two markets which is easier in doing business and what impact do they have on FDI. The report also deals with the importance of how theory affects practical.



-The largest country in the caucausus region

-Oil industry accounts for 51.7% of GDP

-Service industry accounts for 26.3% of the GDP


-Located in the northen Euroasia

-It has the 8th largest economy in the world

-6th largest PPP


STARTING A BUSINESS

WHAT THE STARTING A BUSINESS INDICATORS MEASURE

Procedures to legally start and operate a company (number)

- Preregistration (for example, name verification or reservation, notarization)
- Registration in the economy’s largest business city
- Post registration (for example, social security registration, company seal)

Time required to complete each procedure (calendar days)

- Does not include time spent gathering information
- Each procedure starts on a separate day (2 procedures cannot start on the same day).
- Procedures that can be fully completed online are an exception to this rule.
- Procedure completed once final document is received
- No prior contact with official

Cost required completing each procedure (% of income per capita)

- Official costs only, no bribes
- No professional fees unless services required by law

Paid-in minimum capital (% of income per capita)

- Deposited in a bank or with a notary before registration (or within 3 months)

REGISTERING PROPERTY

What the indicator measure:
- Procedures to legally transfer title on immovable property (number)
- Time required to complete each procedure (calendar days)
- Cost required to complete each procedure (% of property value)

Getting Credit
Russia

The economy has a score of 5 on the depth of credit information index and a score of 3 on the strength of legal rights index. Globally, Russian Federation stands at 109 in the ranking of 189 economies on the ease of getting credit.
From 2009 to 2014 Russia hasn’t made any reforms concerning getting credit.

Summary of scoring for getting credit indicator in Russia
Indicator Russia / Europe (average)
Strength of legal rights index (0-10) 3/7
Depth of credit information index (0-6) 5/5
Public registry coverage (% of adults) 0.0/33.9
Private bureau coverage (% of adults) 59.2/48.2

Azerbaijan

The economy has a score of 5 on the depth of credit information index and a score of 6 on the strength of legal rights index. Higher scores indicate more credit information and stronger legal rights for borrowers and lenders.

Azerbaijan stands at 55 in the ranking of 189 economies on the ease of getting credit.
In 2011, Azerbaijan improved access to credit by establishing an online platform allowing financial institutions to provide information to, and retrieve it from, the public credit registry.

Summary of scoring for the getting credit indicator in Azerbaijan
Indicator Azerbaijan / Europe (average)
Strength of legal rights index (0-10) 6/7
Depth of credit information index (0-6) 5/5
Public registry coverage (% of adults) 23/33.9
Private bureau coverage (% of adults) 0.0/48.2

Getting Credit
GETTING CREDIT

What the indicator covers:

Strength of legal rights index
Depth of credit information index
Public credit registry coverage (% of adults)
Private credit bureau coverage (% of adults)

These scenarios assume that the borrower:
Is it a private, incorporated, limited liability company?
Has its headquarters and only base of operations in the largest business city.
Has up to 100 employees.
Is 100% domestically owned, as is the lender.

-Foreign investments are regulated both on fedral and regional levels.
-There are certain limitations when it comes to foreign investments in Russia such as health , right & lawful interests of citizens or state defence & security measures
-The most common forms of corporate structures in russia are , limited liability companies and joint stock companies.
Protecting Investors
-The economy scored : 6.7 on the Strength of the IPI
-Azerbaijan rank 22 out of 189 economies on IPI
protecting investors indicators in Azerbaijan
Indicator Azerbaijan Europe & Central Asia average
Extent of disclosure index (0-10) 7/ 6
Extent of director liability index (0-10) 5/ 5
Ease of shareholder suits index (0-10) 8 /6
Strength of investor protection index (0-10) 6.7/ 5.7

Protecting Investors
-Russia scores : 4.7 on the strength of IPI

-Globally russia ranks 115 out of 189 Economies on the strength of IPI

Summary of scoring for the protecting investors indicators in Russia
Indicator Russia Europe & Central Asia average
Extent of disclosure index (0-10) 6 / 6
Extent of director liability index (0-10) 2 / 5
Ease of shareholder suits index (0-10) 6 / 6
Strength of investor protection index (0-10) 4.7 / 5.7


Protecting Investors
-What the indicator measures
-Measures the strength of minority shareholders, protection against directors, use of corporate assets for personal gain.
-It measures transparency of transaction.
-it measures liability for self dealing .
-Measures minority shareholders access to evidence before and during trial.

Challenges
Political

Legal

Economic

Corruption
Challenges
Transparency


Political


Corruption
REAL FACTS (CASE STUDY)

Difficulty of Doing Business in Russia: First-Person Perspectives

“We had to get between 45 and 50 different documents in order to open a terrace” (lawyer, Finland, resort and retail)
The fear is rooted in the fact that bureaucratic prescriptions are unknown and unexplainable. On the one hand, a huge amount of importance is given to paperwork: “When we submit papers to financial authorities, we rent a van, and when we have to submit quarterly accounting reports, huge heaps of paper appear in the office” (finance manager, Germany, transportation)

On the day IKEA’s first store near Moscow was due to open, the top management, including the company’s legendary founder Ingvar Kamprad and hundreds of special guests, were shut out because at the last moment a regional bureaucrat decided that the building had not yet passed inspection.

CASE STUDY

Businesses and their leaders can become victims of the Russia’S penal code, fueling fears of state intrusion in business affairs.

One example was the case of oil giant Yukos, which was privatized in 1996 and later accused of tax evasion in 2004. The company's chief executive, Mikhail Khodorkovsky, was convicted of fraud and jailed. The Russian state then bought the company and its assets at a knock-down price, prompting widespread accusations that the charges were politically motivated.

Conclusion
Full transcript