Petersburg School of Management’s “Global Entrepreneurship Monitor Russia 2011” and The World Bank’s “Doing Business: Profile of the Russian Federation”. By way of analyzing the key contributions of these two works as well as drawing inference on the data therein presented, the author will seek to relate to the reader some of the salient challenges that currently face those interesting in performing business within the Russian Federation.
One of the primary concerns that MNCs consider when seeking out a prospective nation to develop their company within is the overall stability of the regime. As such, the Russian Federation itself has presented the West with a fairly stable and nominally democratic regime since the collapse of the Soviet Union. However, even though the regime has experienced smooth transitions of power and regularly scheduled elections, the paperwork associated with many of the forms of business development and start up continue to represent Soviet-era difficulties. Rather than having a clear and well defined process in which would-be investors can rapidly navigate the maze of requirements that are extant, the process has devolved into something of a nightmare in which the Russian Federation languishes near the bottom of the list of nations with respect to receiving a building permit, receiving electrical service to ones building, obtaining credit, and paying taxes.
With respect to obtaining a building permit, the first step of any firm that has committed itself to expanding within the Russian Federation or elsewhere, the potential investor is greeted by a situation that requires nearly a year to complete. According to The World Bank’s “Doing Business: Profile of the Russian Federation”, the Russian Federation ranks 178th out of the 185 countries measured with regards to total ease of receiving a building permit. This process is further complicated by the fact that the permit process itself is exorbitantly high and