Doing Business in Russia
4 Doing Business in Russia
KPMG
Introduction to Russia
Country snapshot
Capital:
Area:
Moscow
17 mln sq km
Population (2014):
> 146 mln (Rosstat)
Cities with over 1 million citizens:
15
Number of regions:
83
President:
Prime Minister:
Currency:
Vladimir Putin
Dmitry Medvedev
Rouble (RUB)
Moscow
Encouraging innovation
and modernisation in
the economy
Over the past few years, Russia has
taken significant strides towards
founding economic development on
innovation. Both the President and
government have voiced their support
and are allocating substantial budget
funds towards these goals.
Russia is striving to progressively
develop in order to compete globally
and overcome the failings experienced
in the 1990s. At the same time,
Russia is seeking to take advantage of
international best practice.
The Russian President has
already signaled that Russia's
goal is to gradually transition
away from an economy
based on oil and raw material
extraction to an economy
focused on technology.
To reach this goal, Russia is seeking
to increase the hi-tech sector's
share of GDP, grow the proportion of
innovative products in total production
output, increase R&D spending, and
make Russia's innovative products
highly globally competitive. Many are
sceptical about Russia's chances of
success; nevertheless, the goal has
been set.
The Russian business community are
currently actively discussing Russia's
innovation strategy, which runs until
2020 and is the basis on which state
policy can be consistently made. A
conservative reading of the innovation
strategy finds it covering economic
development, supporting and
motivating the domestic talent pool,
protecting intellectual property, and
providing and supporting the necessary
infrastructure. The strategy also covers
improving the legislative framework,
reducing administrative (tax/customs)
barriers, providing tax incentives, and
creating the prerequisites to support
demand for innovative products.
Russia has already adopted and
implemented a number of measures
to support the development of an
innovative economy. A number of
state-controlled institutions now exist
to invest in "innovative" companies.
For example, the Russian Corporation
of Nanotechnologies (Rusnano)
supports projects in the field of
nanotechnology, while the Russian
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