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In spite of troubled political circumstances and events in the east of Ukraine, Russia is still a challenging market for the exporters of America, as Russia possesses spacious areas of land, vast repository of natural reserves, and the amount of consumers is above 140 million.

It was determined that Russian Federation occupies the 8th place worldwide by nominal gross domestic product (GDP) and the 6th by purchasing power parity (PPP). In 2014 GPP per capita GDP was $13,200, the largest sum among the BRICS countries. Russia is a state with high incomes, and it has highly knowledgeable, trained manpower and refined, discerning buyers.

In 2014 Russia became the 29th largest external market of the United States, the 20th largest exporter to the US, and its 25th largest commercial partner in total. The exports from America to Russia amounted to $10.8 billion in 2014 and it is 3.3% less than in 2013. The exports from Russia to the USA amounted to $23.7 billion in 2014, 12.5% less than in 2013. Russia’s main individual commercial partners are China, Germany, Japan, Poland, the Netherlands, Italy, Turkey, United States, Ukraine, and South Korea.

The sum-total of American investment in Russia during 2013 was almost $18 billion. The USA is the 10th greatest foreign investor of Russia. In August 2012 Russia entered the World Trade Organization. In this year Congress also passed legislation to enlarge constant normal commercial relations to Russia. The membership of Russia in the WTO will allow to create opportunities for American exporters and investors.

US producers and export merchants should obtain more definite and foreseen admission to the Russian market, because of Russia’s obligation not to raise taxes on any products above the rates that had been negotiated. Russia’s average bound rate for manufacturing and buyer goods changed from 10% to 8%.

Also joining the WTO gives Russia a lot of advantages for American businesses. For example treatment for service exports and service providers will be liberalized, intellectual property rights will be more strongly obliged, supported and reinforced, WTO procedure of dispute settlement and perfected transparency in trading standard-setting will be more efficient, market exposure will be under country-specific tariff quotas, and also the U.S.A. will obtain rules driven treatment of farm exports.

There are some difficulties to do business in Russia and there are the following reasons for that:

1. the largest territory in the world (Russia’s area is more than 17 million square kilometers and it includes 11 hour zones);

2. Russia has a less-developed infrastructure which causes logistical difficulties. It is especially hard to access markets located beyond the bounds of metropolises;

3. English is not widespread in spite of the fact that it is studied in educational institutions;

4. doing business in Russia is prevented by pressing regulatory regimes, insufficient IPR protection, prevalent corrupt practices, insufficient supremacy of law, contradictory application of laws and regulations and lack of transparency;

5. investments in numerous “strategic sectors” of the Russian economy are under the control of government.

Since January 1st 2015 representative offices of foreign companies may apply through a truncated procedure so that foreign employees classified as Highly Qualified Foreign Specialists obtain employment visas and labor permits. The conditions for applying are similar to those for Russian commercial juridical person or legal service, but they vary depending on the job, salary level and attainments of the foreign worker. Rules on business trips should be thoroughly investigated for every individual situation. To do business in Russia one must obtain necessary permissions and be patient as it will require a lot of time, the Russian immigration and visa system is a little complicated. Business trip must take place within the dates stated on the visa.

Speaking about market opportunities in Russia, they are: agricultural machinery, medical equipment, franchising, cosmetics and perfumery, refinery equipment, mining equipment, hydropower generation equipment, aircraft engineering, broadcasting equipment, machining facilities and metal-working machinery, forest and woodworking machinery, building and construction machinery, safety and security equipment, electrical power generation and transmission equipment.

Penetration strategy consists of the following points:

1. maintain communication with Russian trading partners with the purpose of guaranteeing mutual understanding of expected results;

2. confer with the U.S. Commercial Service, the American Chamber of Commerce in Russia, the U.S.-Russia Business Council and U.S. companies which are already in the market;

3. commit much time, staff and capital, because doing and developing business in Russia demands a lot of resources for the companies which consider that there are more chances to succeed than to collapse in Russia;

4. make market analysis to determine the opportunities of doing business in Russia and find possible trading partners;

5. go on business to Russia more frequently to find possible trading partners, enter into relations with them, maintain these relationships and understand unsteady situation at the market;

6. make sure of the reliability of financial standing of partner companies;

7. maintain a long period of time to put plans into practice and achieve successful results.

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