The strategic geographical location of Russia makes it a great place to do business. But that doesn’t mean you should proceed with the plans to set up your business blindly. It helps to consider all the important factors.
Here are 3 major factors you can consider when setting up a business in Russia
1. The Business Structure to Use
The kind of legal structure that you use to establish your Russian company will determine a lot of things. That’s because Russia has set up various regulations that guide business owners on how to run their companies depending on the company structure. And what works for your Russian business won’t necessarily work for another business owner.
Some of the common business structures include a sole proprietorship, a limited liability company, and a joint-stock company. Your business needs will determine which structure you should use.
For example, if you have minimal capital but want to start a business in Russia, then a sole proprietorship would probably work best. You will be responsible personally for all the liabilities of the company if you choose this structure. But you will also own all the profits.
If you want to control your company fully but don’t want to be responsible personally for its debts, then a limited liability company is best. However, you must have a decent share capital base of 10,000 rubles. Half of that money must be paid while you incorporate the company. And the rest of it must be paid within the first year of business operation.
2. The Business Location to Operate From
Another important factor to consider is the business location to operate from. When establishing the business in Russia as a foreigner, you must provide a legal business address. Russian authorities require this address for communication purposes. So, you cannot operate from thin air.
Your business location also matters because it determines how far you will need to go to access business stock or raw materials for production. The longer the distance, the more costly it will be to run your business operations. And the pricier your products will be, which may make them harder to sell.
Your address will also affect the business rent that you pay every month. The more desirable your business location is, the more expensive your rent is likely to be. But that desirability may appeal to higher-end customers, which may help to improve your revenues.
Therefore, you must think about where you will operate from. Try to find a balance between the cost of operating from your preferred location and its appeal to your target customers.
3. What Kind Of Business Product Or Service To Sell
Foreigners have a lot of leeway concerning which industries they can invest in. These include the retail, manufacturing, and financial industries. You can also invest in the insurance, wholesale, and agricultural industries.
The kind of product and service that you choose to sell depends on you. But you need to ensure there is a sustainable demand for it. If there is no adequate demand for what you intend to sell, and then you will not generate enough revenues to keep your business in operation.
And before long you will begin to experience losses. Without revenues, how long do you think you will continue to stay in business?
So think carefully and logically about what you intend to offer your Russian customers.
One of the most important things to do when establishing a Russian business is to ensure your immigration paperwork is in order. But you need a Russian invitation letter for business to get started. To get it, check us out at https://visaexpress.com/russian-invitation-letter/.