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5.9 Telecommunications
2% annual growth is expected in Russia’s communication services market between 2014 and 2016. Russia is Europe’s largest market for mobile phones.
Demand for innovative technologies and equipment will be boosted by the:
development of Long Term Evolution (LTE)
government’s programme to improve communication services in distant regions
Traditional telecommunications services will still be in demand for a long time as the network of 44 million fixed lines only covers about 28% of the population.
There are opportunities for UK companies in:
LTE/4G hardware and technologies
technologies aimed at development of Value Added Services (VAS)
innovative broadcasting technologies
5.10 World Cup 2018
Russia will host the 21st FIFA World Cup in 2018, the first World Cup to be held in Russia. The government has developed an infrastructure programme to deliver the project and create a lasting legacy.
The designated budget of USD 20 billion for 2013 to 2018 will be spent on:
design and construction of 12 stadiums
101 training grounds
62 hotels
broadcasting and media centres
modernisation of 11 airports and other transport infrastructure
merchandising, retail etc
Nearly 40% of the budget will go into building, or renovating multi-purpose football arenas.
Opportunities arise in a broad range of sectors including:
design
construction technologies
project management
transport planning
security and access control equipment
sport venue fit-out
pitch management
stadium operations management
venue commercialisation
overlay
fan fests
hospitality
6. Start-up considerations
The main forms of business activity used by UK companies in Russia are:
direct sales
distributorship agreement
representative offices
branch of a foreign legal entity
subsidiary
6.1 Direct sales or distributor contracts
UK companies choosing direct sales or distributor contracts are:
not subject to Russian taxes
don’t need to establish a presence in Russia via any corporate structure
not responsible for Russian customs processes, taxes and fees
6.2 Other business forms
Representative offices are accredited for 1 to 3 years. They can only carry out activities aimed at generating profit, such as market research. They can use rouble and foreign currency bank accounts and transfer funds without restrictions.
A branch of a foreign legal entity is accredited for 1, 2, 3 or 5 years. They can carry out all the functions of the company in the Russian Federation.
UK companies can choose to establish a presence in Russia through a Russian subsidiary. The most common business structures in Russia are:
limited liability company (OOO in Russian)
closed joint stock company (ZAO in Russian)
open joint stock company (OAO in Russian)
Taxation, legal obligations, regulative bodies, registering requirements and information disclosure procedures differ depending on the business structure you choose.
Contact Department for International Trade (DIT) Russia to help find tax and legal advisers before entering into agreements.
7. Legal considerations
The Federal law on foreign investment: