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How to invest in Russia

 The growth of Russian economy cant be compared with economical growth of China, but in spite of it one cant deny that this is a very lucrative market that suits perfectly for investment. The events of the last decade have proven that it is worthwhile regarding this possibility especially if you want to connect your future with Russia.

Since 1998 the growth of Russian economy can be characterized as stable. The World Bank has registered 6% of steady average growth with the exception of 2009. The biggest asset that Russia has is oil and oil prices certainly play a significant role in the economy of this country. Besides, the tax reform and bigger size of foreign investments alongside with increase of consumer demand also played its role.

 Excellent returns of the Russian stock market with incredible 900% gain in the course of 1999 - 2007 also did its work. As investors observed the spectacular returns therefore their number has increased greatly. Those who look for diversification can find fantastic opportunities in Russia. Many investors added Russian investments to their portfolios.

Weighing the risk of deriving profits from Russian enterprises, many pay attention to the political factor that contains risk in itself, the concentration on oil and gas sectors including natural resources. This is natural that many financers are concerned over the transparency factor when they contribute to Russian economy. Despite the risky factors the size of the returns speaks for itself and the number of those who wish to invest to Russian stock is growing fast. When the possible rewards can outweigh the risks involved then it is impossible to deter the Western businessmen looking for profit. The bigger return than the mature economy can provide and the long-run attractive prospects are the reasons why investors rush to Russia. 

If you want to reduce the risk when you invest to Russia you should apply to the professionals who will consult you on the problems that may arise.

When you acquire shares/participatory shares of some Russian enterprise you should know that some legal formalities must be fulfilled. It is performed not to harm the interests of other investors. There are joint stock companies in Russia alongside with limited liability companies. Shares of stock or securities are issued by joint stock companies and are regulated by law.

The emission of shares must accompany with registration by RF Federal Commission for the Securities Market. Any transaction without this registration will be considered invalid according to the Civil Code of Russia (article 168)

All shares must be completely paid in and the investor must be sure in that. The transaction is also invalid without that.

Non-documentary form of shares is one more nuance the person should pay attention to. The investor must be sure to obtain the extract from the registry of shareholders that will confirm the investors title.

Limited liability companies provide participatory shares and they do not require registration, but it can be sold only in the case when it is completely paid in.  Besides, an investor can get the rights of a participant in such company after the notification to the company.

The buyer can be asked to get a prior approval of the the RF Ministry of Anti-Monopoly Policy in accordance with the RF Law On competition (article 18).

There is a range of corporate procedures that must be performed (for instance, sanction of major transactions, a waiver of the preemption rights).

 All necessary documents should be signed and one must be sure in entering shareholders registry.

If you increase the authorized capital stock of the company then you can become the incorporator of the company. In order to enter the board of incorporators you just need to have the documents that were concluded in a right way.

Dealing with our company you will get all necessary service and information that you will not get at some other place. You will be able to acquire the assets as well, tangible and intangible too. You will be able to acquire the assets or the enterprise that can be more advantageous because you buy the complex of different assets.

If you just start investing then you can begin with small sums to be more confident that you are right in your decision. Try to follow diversification strategy and invest into different companies. This would be wise to regard different economy sectors too. The risk can be reduced if you give priority to long-term objectives. You are less subjected to volatility of the market in this way.

When you choose the proper stock, you should look for more information on the subject. You can get it from the Federal Financial Bodies. The reports on economical indicators can be received from the Ministry of Finance. It is in charge of financial reforms; budget of Russia and its debt and all national problems in banking sphere is in the competence of this organization.

 Interest rates can also depend much upon the work of Central Bank that regulates the sphere of securities trading.

The work of such federal executive body as FFMS the Federal Financial Market Service that also manages the financial activity, issuing necessary regulations, should also be surveyed.

The main trading platform in Russia as far as stocks are concerned is Russian Trading System or RTS. MFB is also an active platform in this respect (Moscow Stock Exchange). There are also SPBEX (St-Petersburg Stock Exchange) and the Nizhny Novgorod Currency and Stock Exchange.

If you are interested in fixed income and bonds then you should know about RusRating the independent agency, the activity of which is connected with rating of bonds and banks. The data from the ExpertRA can be of interest to you, but assessment of Standard and Poors can look the most reliable. It rates corporations in Russia. Learn the information from Moody's Interfax Rating Agency, which also provides its credit ratings to organizations.

You should follow all market trends before you invest into the Stock market of Russia. In accordance with the law the person who participates in the RTS should have a special broker or a dealer license.

We will provide you with a stockbroker who has a proper license. The document that is needed for that is a Federal Financial Markets Service of Russia dealer license or a Federal Financial Markets Service of Russia broker license. If you follow all news you will be able to discern soon the hottest offers.

The authorized intermediary is a must when you enter the Russian stock market. Do not break the law and follow all rules. Select the companies thoroughly before adding them to your portfolio. 

This is a common thing in Russia to expect 30% returns on investments and businessmen often do not even start investing when the potential profit is lower.

It can be hard to understand the business environment in Russia therefore you will need a guide for that. We will gladly shoulder all problems and help you in this difficult period. All challenging tasks will be easy if you apply to us. We will help you to reap the harvest with regard of local specifics and you will get your big returns as you come to do business in Russia.

Those who came to Russia to invest several years ago enjoyed big success. Such companies as Tetra Pak, Wrigley, Mars, Phillip Morris, Telenor, Wrigley, McDonalds, Raiffaissen Bank feel very comfortable in Russia and earn profit that is hard to obtain in the countries with mature economy.

If you find more alluring to buy stock and enter the Board of Governors of some company, then you should look at the individual indicators of the company and apply to the independent agency to get unbiased assessment. The regulations for that can be different from one company to another.

As for the psychological factors, everything may seem a little strange when you start dealing with companies in this business environment. You will need assistance to cooperate with government bodies on all levels.  Take into account that government bodies possess arbitrary power thanks to which the company can flourish or on the contrary they will hinder it on every step. For instance, some bureaucrat can decide that the building of your company does not answer necessary requirements and you will have to move to another place. Therefore it is important to build the relationships with government bodies on all levels to make the work easier and to have chance for development. When you deal with us you should not worry about such problems. We successfully manage such tasks and grant authorizations from the bodies that can arrange unpleasant surprises to those who do not cooperate with them.

The task can be challenging for the person who do not understand how to deal with it. One should pay visits, invite officials and participate in various events to be socially active. Not all can be ready to it but with a good guide there is nothing to worry about. If you delegate the relationship building to us in your name you can forget about the obligation if dealing with some top people if you do not want it.

Social capital is the asset that may happen to be unaffordable to you because you are a foreigner. Foreigners find it hard to penetrate some spheres like oil and gas. Lack of credibility and contacts may be in the way. We will explain to you what operations cant be fulfilled and how to find gap in law to solve certain problem.

You should not fear some realities that are inevitable in Russia. Some are paralyzed with a word financial crisis, but clever businessman can derive profit under such conditions too. For instance, this is something that food production companies did during the financial crisis of 1998. They have managed to win the bigger market share because the imported goods became too expensive. So do not be focused on the problems. The solutions can be found in any situation.

It is necessary to be flexible when you deal with Russians. That does not mean that you should give up your major goals. But you have more chances to achieve them being flexible. 


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