Doing Business in Russia and Eastern Europe. Backgroud 103 million people in 10 countries Low- middle to middle income: from $6,400 to 16,300 GDP/cap;

Doing Business in Russia and Eastern Europe

Backgroud• 103 million people in 10 countries• Low-middle to middle income: from$6,400 to 16,300 GDP/cap; average$9,326• Broke away from communism andRussian influence in1989-1991• Politically stable democracies.• Market reforms: 70-85% of theeconomy in private hands• Economic growth—3.9 to 11.9% in2006; weighted average 6.4% (EBRD)• Accession of eight countries to EUMay 1, 2004 + two more January 1,2007.

Top Ten Reasons Why People do Business in Eastern Europe

#1. Easy access to EU markets!483 million people in 27countries


#2. To sell to consumers in CEE and x-USSR


#3. Well educated work force.


#4. These people know how to party.


#5. Low cost of labor.


#6. Fine people


#7. Cultural proximity to The West.


#8. Political stability andeconomic growth


#9. Cities and countryside are beautiful



• #10. Everybody else is doing• it.• Stock of inward FDI 1989-2006:• $273 billion• General Electric → Hungary• Coca Cola →everywhere• Accenture →Czech R.• McDonalds → everywhere• Volkswagen → Czech R.• Renault/Peugeut → Slovakia• American Standard → Bulgaria• Nokia → Poland• Kia →Slovakia

Doing Business in Russia

• 1. Bulid personal relationships with partners.• 2. Use local consultants.• 3. Consider business ethics.• 4. Be patient.• 5. Stress exclusivity.• 6. Remember that personal relations are

important.

Doing Business in Russia

• 7. Keep financial information personal.• 8. Research the company.• 9. Stress mutual gain.• 10. Clarify terminology.• 11. Be careful about compromising or setting

things too quickly.• 12. Written contracts are not as blinding to

Russians as they are to Westerners.

Documents

Doing Business in Russia and Eastern Europe. Backgroud 103 million people in 10 countries Low- middle to middle income: from $6,400 to 16,300 GDP/cap;