Foreign companies operating in Russia saw little changes in the business environment in 2012

(Business New Europe – bne.eu – March 25, 2013)

The survey conducted by the Russian Union of Industrialists and Entrepreneurs (RSPP) together with Fleishman-Hillard Vanguard shows that 44% of respondents noticed the improvement of the business environment (34% considers the improvement minor) versus 55% in 2011, RBC daily reported.

The improvement in the quality of tax administration is accompanied by the growth of the fiscal burden. To register a new company is still a complicated process, although both Russian companies and international experts point to the reduction of the period of registration. “The business climate looks “ragged” when some elements work properly (or in an acceptable manner at least) and others are a drag on business efforts,” the RSPP says in a report.

Foreigners think the key obstacles to the development of normal business environment in Russia are high administrative barriers (50%), corruption (42%) and underdeveloped infrastructure (37%). The share of illegal practices (for example, corruption) decreased (from 59% in 2011), but “legal” obstacles such as administrative barriers (31% of respondents mentioned them in 2011) became a serious problem.

As the most frightful inspectors, respondents mentioned the Federal Customs Service (the service disturbs 49% of respondents, including 12% to a large extent), licensing bodies (41%), the tax service (36%; on the other hand, 51% of respondents complained about the Federal Tax Service in 2011), Rospotrebnadzor (34%), and regional administrations (32%).

“Among the priority measures able to stimulate doing business on the principles of social responsibility, 52% of respondents mention tax incentives (27% in 2011), transparency of making decisions by authorities (48%) and elimination of overregulation and administrative pressure (40%),” Elena Fadeeva, General Director of Fleishman-Hillard Vanguard and Head of the Working Group on Communications at RSPP’s Expert Board, said, cited by RBC Daily.

Among the most significant macroeconomic events, participants of the survey held by RSPP mentioned the introduction of the budget rule (it defines the procedure for measuring federal budget expenditures based on the benchmark price of oil for a five-year period, and for a ten-year period in the future, as well as the procedure for charging the Reserve Fund), the commissioning of the second line of the Nord Stream gas pipeline, and the institution of the business ombudsman.