Whenever anyone mentions “Russia”, the mental image that springs into most people’s heads tends to be rather mysterious and perhaps even a little frightening. Most people still associate Russia with the Cold War, the Hell-Times of Communism, and the grey and depressing skyline typical of any socialist society. Few people in the West have any real clue what Russia is actually like. But Western stereotypes do a great disservice to an amazing country and a truly wonderful people. I have travelled to Russia many times over the past three years. I absolutely love the country and its kind, big-hearted, and thoroughly decent people. Having spent well over a year living in Moscow, here is why I think that Russia is an underrated business opportunity.

Breaking Down the Iron Curtain

That Cold War-era quote from Winston Churchill defines better than any other the sentiment that most Westerners have about Russia. In fact, it applies quite well even into the modern day. The fact is that Russia is a mysterious country. The language alone barrier is quite a significant one. Russian is NOT an easy language – it has six cases, three genders, and innumerable complications. Those who study it will tell you that it has a number of hair-tearing aspects that make it a serious challenge to learn. (Verbs of motion, anyone?)

And that is before we get to the near-hysterical fear with which Western media regard the country. I am certainly no fan of the media in general. But when it comes to Russia, the negative stereotypes that they use about the country are downright insulting. They would have you think that the country is corrupt, repressive, and totally terrible.

Those stereotypes are absolute nonsense. Russia is in fact a great country in which to do business. You simply have to know what to look for and where to invest.

Before I continue – in the event that any of my former colleagues from the Moscow or St. Petersburg offices at Deutsche Bank see this:

За здоровые! Мои самые теплые пожелания вам! Я надеюсь, что ваше семье здорово в этом времени коронавируса, и удачи в 2021 г. Спасиво вам большое за вашего гостепиимство во время моего визита в 2017 г.!

The Real Russia

So why am I so all-fired-up about Russia? What makes it so special? How can a country known primarily for an endless supply of Hollywood stereotypes and gorgeous supermodels possibly be a good place to do business?

That’s actually very easy to answer. This is why I consider Russia to be a highly underrated business opportunity:

1. Russia Has Superb Technical Talent

The Russian education system is frankly amazing at producing great mathematicians, scientists, and programmers. In fact, America owes its leading edge in military stealth technology to a paper published by a Russian physicist. And that is not a coincidence. Anyone who has ever worked with or studied alongside Russians knows that their education system is of a very high calibre.

I saw the effect of that technical talent on full display during my time at Deutsche Bank. Back in the day, most of the core systems development had been outsourced to India. Now, that certainly saved a pile in terms of immediate costs. But there was no real communication between the DEV teams there, and the Middle Office teams in NYC and London that actually used the technology.

As a result, the middle office systems were slow, buggy, and difficult to develop. Only when DB finally moved part of its risk calculation platform development team to Moscow and St. Petersburg did we begin to see some serious changes.

Suddenly, the MO teams had direct lines of communication with DEV and QA teams that actually cared about their customers. As a result, the RiskEngine interface developed in ways that would have been unthinkable just a year or two previously.

I’m proud to say that I played a major role in developing those relationships with the RiskEngine and Trinity teams in Russia. And my colleagues saw the full benefits of both the relationships and the technical expertise that the Russians brought bear. By the time I had to leave DB, the risk system was easier to use than it had ever been – thanks in very large measure to our friends in Russia.

2. Russia Has Excellent Infrastructure

Go to Moscow and take a trip on the metro. Do the same in St. Petersburg. The metro runs quickly, efficiently, and at amazingly low cost. And that’s before we get to the beautiful designs of metro stations like Tsvetnoy Bulvar’ and Novokuznetskaya. If you live in NYC or London, the speed, efficiency, and especially cleanliness of Russian metro systems will astonish you.

Do you like driving? Take a trip out to Voronezh, a “small” city of about a million people 500Km south of Moscow, on Russia’s highways. You will be amazed by the quality and smoothness of the ride. The streets of their main cities are beautiful, clean, well-maintained, and highly civilised. (By the way, the Western stereotype of crazy drunken Russian drivers is not particularly accurate. The Russkies are in fact highly civilised on the road. Indian drivers are vastly worse.)

Want 4G internet? Megafon, Beeline, and MTS have you covered. Their 4G network is fast, efficient, and cheap. Public cafes and restaurants have free WiFi, as do most shopping malls.

Admittedly, I have only experienced western Russia. I have no idea whether this all holds true for the cities in the centre or the east. I’ve never been there. But everything that I have seen tells me that the Russians do their best to keep things organised, efficient, and well-run.

3. Russia Has a Relatively Low Tax System

To those used to frankly exorbitant European and blue-state American tax systems, Russia’s income and business tax situation is something of a revelation.

The individual income tax rate is a flat 13% up to 5M rubles and 15% above that level. There are a few other complications besides that. Compared with the truly labyrinthine US tax code, though, the Russian income tax system is far simpler.

The corporate tax rate is somewhere between 10% and 20%, depending on the type of company involved. Foreign companies pay 20% outright. Again, compared to the (effective) US tax rate of 29% (before the tax cuts of 2017, which may well be reversed), that is very competitive.

Much of Russia’s tax revenue comes from the 20% VAT charged on all goods and services. And their VAT system is astonishing. They have almost completely automated collection and registration of VAT. You buy something and you simply don’t worry about what the extra VAT is. It’s already embedded into the price. This is very different to the American experience of paying a different sales tax in every state, and even every city. In the US, if you live in a high-tax locale like NYC or Jersey City, you’d better be prepared to pay anywhere from 5% to nearly 10% extra on top of what you thought you would. In Russia, you don’t have to worry about that.

4. Russian Companies Can Be, and Are, World-Beaters

Western companies would like you to believe that they can’t compete with Russian ones because of government favours through the aforementioned tax system. I don’t believe that for a single second.

Russian homegrown companies like Yandex, VKontakte, Sberbank, and others, can and absolutely do take on foreign competitors every day. And they win, because they serve their domestic markets better than foreign competitors.

Google has a very hard time competing against Yandex in Russia – and, indeed, throughout much of the Far East. Facebook has real competition from VKontakte. The only foreign bank that I saw with any significant presence during my time in Moscow was Societe Generale, and they have a very hard time against Sberbank and VTB. And that’s before we get to Russia’s massive energy sector, which dominates so much of the economy.

The fact is that the Russians can create amazing world-class companies. Which brings us to the fact that…

5. Russia’s Top Brands Are World-Class

The good people at Brand Finance do great work in valuing the power and strength of various brands around the world. And if you go to lookup Russian brands there, you will find brands like Aeroflot, Sberbank, and others, competing hard and well against the world’s best.

Again, I can verify their strength from personal experience. Aeroflot’s in-flight service and entertainment systems on their long-haul flights are right up there with the tier of airlines just below Emirates and Singapore Airlines, in my opinion. Sberbank’s and VTB’s branches and ATMs are easy to use, widely available, and capable of doing far more than just banking. You can pay for phone and internet bills straight through a VTB ATM, for instance. I’ve done that many a time (including once quite memorably at three o’clock on a VERY cold morning).

All you have to do to see how much Russia has changed from the dark days of the Soviet Union is to take a trip out to Moscow City. That is the name of the skyscraper-festooned bit of western Moscow, near the Filyovsky Park District, where the biggest international companies have their Russian operations. If it weren’t for the billboards in Cyrillic, you could swear that you were in London or New York. The place is very cosmopolitan – and yet, very Russian.

And speaking of the Russians…

6. The Russian People Are Amazing

I cannot say enough good things about the Russian people themselves. They are the reason why Russia is a great and wonderful country.

Russians have a reputation for being a bit cold and gruff. That’s actually true, they are – at first. But once you get to know them, they are warm, friendly, and kind in ways that you have to see to believe. Once you befriend a Russian, he (or she) is your friend for life. A Russian man who counts himself your friend will literally give you the coat off his back to keep you warm during the fiendishly cold Russian winters – I’ve personally witnessed it.

Moreover, the Russians are deep, thoughtful, philosophical, and curious about the world. They are also more than a little fatalistic – which you will not find surprising once you study a bit of their history. These people have stared Death in the eye for a thousand years. They live in some of the most inhospitable places in the world. They have carved a thriving and magnificent civilisation out of the snow and ice. And they defend their hard-won gains with a quiet and patient tenacity. They will brook no lectures or interference from outsiders about their conservative, Orthodox Christian, and self-contained culture, so don’t even think about trying to Westernise them.

And while they like Western toys and gadgets, they look upon the Western idea of “democracy” with scornful amusement. The idea literally doesn’t make sense to them. Look at their history and you’ll see why.

Of the many, many peoples that I have lived with and encountered through my long travels, the Russians are handily my favourite. They are actually highly tolerant of outsiders and foreigners – provided that we obey their rules. And they are compassionate in ways that defy easy explanation. You really have to spend time around Russians to understand that aspect of their character.

A Word on Politics

I try hard to avoid talking about politics here. But I have no choice when it comes to Russia.

Despite the glowing picture that I have painted above, I will be the first to acknowledge that Russia is far from perfect. Yes, the government is corrupt and inefficient. Yes, most people struggle every day just to put food on their tables. And yes, the country’s vast energy and mineral wealth appears to be horribly mismanaged by oligarchs and corrupt officials. The Russian people are rightly cynical about politicians of all stripes.

And President Putin is not quite the universally beloved dictator that the media would have you believe. Just spend 10 minutes talking to real Russians on the streets and you’ll find this out in a big hurry.

But virtually every other stereotype about Russia is wrong – or a flat-out lie.

Much of the Western media coverage of Russia is disgustingly biased. Contrary to the hysterical pronouncements of Russophobes throughout Western academia, media, and governments, the Russian government does not seek to expand and conquer. They learned their lesson the hard way about empire-building and want nothing further to do with it.

Nor is the Russian government belligerent or evil. It has intervened militarily in areas where the governments SPECIFICALLY ASKED THEM to get involved. Can the American and Western governments, who bomb innocents in Syria on a whim, say the same?

And the Russian government does not interfere in the electoral processes of other countries, especially compared with Western powers. It was the American CIA that backed the overthrow of the democratically elected Poroshenko government in Ukraine, simply because he dared to express pro-Russian sentiments. And Western powers interfered directly in Russian politics when the people of the Donbass region voted overwhelmingly to join Russia in 2014.

The Russian military is not a weapon of offensive war. Under President Putin’s rule, it has actually shrunk significantly in size. Today’s Russian military is a lean, battle-hardened, technologically advanced fighting force with a cadre of actual NCOs. (That latter is something that they had to rebuild from scratch.) The modern Russian armed forces are not corrupt, fat, slovenly, and useless, as they were in the 1990s. Today they are capable of taking on any modern army in a land war – and winning outright.

Their toys are highly impressive too. I’m willing to bet decent money that their Su-57 can fly circles around the failed $1.7 TRILLION F-35 Joint Strike Flopter. They have the Ka-50 Black Shark (and the Ka-52 Alligator) and the T-14 Armata tank, all developed in-house by some of the best engineers in the world.

And yet… they do all of that on a defence budget of $65B a year. That’s barely 10% of what the US spends – that we know of – on its world-spanning, and failing, empire. They orient their military defensively to fight land-based wars, not pointless Syracuse Expeditions and Forever Wars designed to bleed their country dry.

If you want to learn about Russia – the real Russia – ignore the histrionic fools of the Western media. Instead, start here. Get some balance here – though The Moscow Times isn’t much better than the Western journalists that I so disdain. And learn about Russian culture here, here, and here.

Getting to Russia

Seeing as how Russia is such a wonderful place, and such an underrated business opportunity… how does the intrepid entrepreneur or businessman go about getting there?

Well, the simple answer is that you need a visa. Specifically, you need a multiple-entry business visa.

This isn’t quite as complicated as you might think. Basically, you need to apply to a Russian visa application centre, embassy, or consulate, with an official invitation letter issued by a Russian organisation.

Getting one is easy. And the Russian government recently reformed its visa policy to permit visitors to stay for up to 90 days out of every 180, for up to 3 YEARS. (The Russian “mnogokratnaya viza” used to be valid for only one year at a time.) That multiple-entry visa works just like the EU’s Type C Schengen visa. Just click here, fill out the necessary details, and then go to your nearest Russian VAC or consulate to apply.

Next, hop on an Aeroflot flight to Moscow, and spend some time with your jaw on the floor at the sheer stunning beauty of the city. I love the whole city – I honestly cannot think of a single district that isn’t green, well-maintained, cultured, and beautiful. My personal favourite areas of Moscow are in the southern districts – the city is expanding that way, as it must, given its massive population.

You can take a Sapsan fast train or quick flight to St. Petersburg as well. “Piter” may be the most architecturally beautiful city that I have ever seen. The Church-on-Blood is an unmissable sight. So too is the Heritage Museum – in which you could spend, quite literally, weeks without seeing everything. While you are there, be sure to take a sunset cruise through canals of the “Venice of the North”.

Conclusion – The Best Business Opportunity You’ve Never Heard Of

Russia is one of my favourite places anywhere. I love almost everything about it – and while no doubt most Russians find my butchery of their language to be amusing in a childish sort of way, they have always treated me personally with the utmost kindness and decency.

I promise you that if you do not visit Russia at least once, for a holiday or a business trip, you are really missing out. It is a country of staggering richness, beauty, soul, and depth.

And its qualities as a business opportunity simply cannot be overlooked. If you can get past some of the uglier and more foolish Western prejudices about the country, and if you can deal with the rather significant language barrier, Russia could well prove to be a superb place for your next major business investment.