The Insider View - Moscow

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The local approach to trading is more aggressive than what you’d typically
experience in the West, according to Popov. “It also depends on personal connections and trust to a much greater extent than it does on a truly free market,” he says.

Nesterov believes that doing business in Moscow is not much different from operating in any other European capital. There may be talk of complex laws and excessive taxes, but the reality is different, he stresses.

“Taxation in Russia is lower than it is in the UK, especially when it comes to personal and corporate income taxes. A company that wishes to operate in Moscow should employ a good local chief accountant. There will be no problems with the authorities if you stick to the rules,” Nesterov argues. “But you need to be prepared for the huge amount of paperwork required to support your accounting figures, especially if your company deals with revenue in cash.”

Having worked in Moscow for more than 20 years as an FD at western firms including First Data, American Express and Accenture,
Popov believes that the only successful multinationals in the city are those that can combine their global knowledge effectively with local insight.

“Every western business here needs to have a guide to navigate the local environment. For the ones that have this combination of global and local expertise, there are plenty of fantastic opportunities to grow your business at a much higher rate than you could in the West,” he says.

Many foreigners view Moscow as a hotbed of corruption – a fact that Popov
acknowledges. “I know that many western managers worry about this. It does exist in Russian business, but it’s not endemic,” he says. “It is quite possible to run a business in line with normal commercial ethics and policies. The critical requirement is to have western-cultured local managers who can spot danger and help you to avoid it.”

Minkina says that, although some of Russia’s commercial arrangements – for
instance, the lack of official procedures – may seem slightly odd to an outsider, there is usually a good reason. Grey areas remain because the legal framework is still developing. Her advice to expats? “Just ask – and things will be explained.”

There is no one prevailing management culture in Moscow, according to Alexei Popov ACMA, CGMA, chief finance officer for US security group Brink’s in Russia. “There are still companies, primarily publicly owned, with a hierarchical Soviet approach, but there are also young Russian firms with very western leanings. These try to adopt an Anglo-American business style,” he says. “Then, of course, we have the local branches of multinationals, which tend to
share the culture of the mother ship.”

Minkina warns western expats that they may experience a clash of cultures. Russia’s education system focuses more on technical expertise than it does on interpersonal skills. Muscovites may therefore perceive westerners as “lightweight, talkative and arrogant”, she explains.

In addition, Russian companies will often enter crisis management mode at the slightest sign of uncertainty. “It’s a survival technique that offers flexibility and speed of reaction, but it can mean long working hours
and short planning horizons,” says Minkina, who adds that an “outsider” working for a Russian business should forget about work- life balance – the concept does not exist in most local organisations.

“This approach also requires a tough, authoritarian management style,” she says. “Westerners may find it rude, aggressive and disrespectful, but this is just the other side of being straightforward, task-orientated and competitive. Russia is a challenging, yet rewarding, place to work. It opens your mind and reveals your potential. Many foreign workers really miss their Russian assignments
when they leave.”

As the most westernised of Russia’s cities, Moscow offers a particularly wide range of opportunities for senior managers from Europe and America. So says Vladimir Nesterov ACMA, CGMA, head of financial controlling at Moneks Trading, part of multinational retail group M H Alshaya.

“Large Russian companies in Moscow help these expats to develop in an environment that is much more competitive than it used to be,” he says.

Even so, Elizaveta Minkina ACMA, CGMA, head of corporate governance and assurance at BP’s upstream strategic performance unit in Russia, observes that business prospects will differ significantly depending on whether you’re looking at a well-resourced multinational, a state-run corporation or a vibrant online services firm, for instance.

“Do not make any assumptions. Always talk to locals in the sector that’s relevant to you,” she advises would-be expats investigating a potential career opportunity in Moscow.

Salaries in the capital may compare favourably with what’s available elsewhere in Russia, but they’re generally still lower than the rewards on offer for equivalent jobs in the rest of Europe, according to Nesterov. Minkina notes that, because the salaries of foreigners are in many cases significantly higher than those of their Muscovite counterparts, they will be expected to deliver
more value to the company.

There is no one prevailing management culture in Moscow, according to Alexei Popov ACMA, CGMA, chief finance officer for US security group Brink’s in Russia.

“There are still companies, primarily publicly owned, with a hierarchical Soviet
approach, but there are also young Russian firms with very western leanings. These try to adopt an Anglo-American business style,” he says. “Then, of course, we have the local branches of multinationals, which tend to
share the culture of the mother ship.”

Minkina warns western expats that they may experience a clash of cultures. Russia’s education system focuses more on technical expertise than it does on interpersonal skills. Muscovites may therefore perceive westerners as “lightweight, talkative and arrogant”, she explains.

In addition, Russian companies will often enter crisis management mode at the
slightest sign of uncertainty. “It’s a survival technique that offers flexibility and speed of reaction, but it can mean long working hours and  short planning horizons,” says Minkina, who adds that an “outsider” working for a
Russian business should forget about work- life balance – the concept does not exist in most local organisations.

“This approach also requires a tough,authoritarian management style,” she says. “Westerners may find it rude, aggressive and disrespectful, but this is just the other side of being straightforward, task-orientated and
competitive. Russia is a challenging, yet rewarding, place to work. It opens your mind and reveals your potential. Many foreign workers really miss their Russian assignments when they leave.”

The local approach to trading is more aggressive than what you’d typically
experience in the West, according to Popov. “It also depends on personal connections and trust to a much greater extent than it does on a truly free market,” he says.

Nesterov believes that doing business in Moscow is not much different from operating in any other European capital. There may be talk of complex laws and excessive taxes, but the reality is different, he stresses.

“Taxation in Russia is lower than it is in the UK, especially when it comes to personal and corporate income taxes. A company that wishes to operate in Moscow should employ a good local chief accountant. There will be
no problems with the authorities if you stickto the rules,” Nesterov argues. “But you need to be prepared for the huge amount of paperwork required to support your accounting figures, especially if your company deals with revenue in cash.”

Having worked in Moscow for more than 20 years as an FD at western firms including First Data, American Express and Accenture, Popov believes that the only successful multinationals in the city are those that can combine their global knowledge effectively with local insight.

“Every western business here needs to have a guide to navigate the local environment. For the ones that have this combination of global and local expertise, there are plenty of fantastic opportunities to grow your business
at a much higher rate than you could in the West,” he says.

Many foreigners view Moscow as a hotbed of corruption – a fact that Popov
acknowledges. “I know that many western managers worry about this. It does exist in Russian business, but it’s not endemic,” he says. “It is quite possible to run a business in line with normal commercial ethics and policies. The critical requirement is to have western-cultured local managers who can
spot danger and help you to avoid it.”

Minkina says that, although some of Russia’s commercial arrangements – for
instance, the lack of official procedures – may seem slightly odd to an outsider, there is usually a good reason. Grey areas remain because the legal framework is still developing. Her advice to expats? “Just ask –and things will be explained.”

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