Association of European Businesses: “Investment Climate in Russia is Good”

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aeb-logoFrank Schauff, the General Director of the Association of European Businesses has stated: “The Investment climate in Russia is now favorable but sanctions pose the main risk for development of this climate’s potential”.

The AEC is the main European representation of foreign investors in Russia. It is an independent non-commercial organisation that represents and promotes the interests of European companies conducting business in and with the Russian Federation, and carries out activities to improve the Russian business and trade environment and to promote economic integration and partnership between the Russian Federation and the European Union.

Schauff referred to the recent AEC report on Russia: “Yesterday we just published our annual study. And we have a scale from zero to 200 to measure the moods of European businesses. Last year, we had 141 points out of 200, which was pretty good and close already to the pre-crisis result. This year it was 138 points, which is not so much different. But anyway, the tendency is a different one, because it started growing again”, he said speaking about the attitude of Western businessmen towards current investment climate in Russia.

“The situation became better last year. The trade between Russia and European Union has grown significantly”, he added.

In terms of areas of interest to European businesses interested in investing in Russia, Schauff said, “Trends have changed over the years. Nowadays, two more sectors have become more important. It’s still the car sector in terms of having more manufacturing on the Russian territory. I also think the food processing industry is interesting”, he noted.

At the same time, Russian goods are not so well-established in the European markets, Schauff said. The Russian economy needs to become more competitive, the head of the Association said. “And if you become more competitive, the European market is open to anybody”, he added.

“Russian GDP is close to recovering its position from when the sanctions originally hit”, says Chris Devonshire-Ellis of Dezan Shira & Associates. “The economy is growing and there are opportunities”.

As can be seen in the graph below, Russia’s GDP is recovering from when sanctions hit it in April 2014 (marked by the orange dot).

Graph courtesy of Stratfor Graph courtesy of Stratfor

 

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Russia Briefing is produced by Dezan Shira & Associates. The practice provides foreign investors in Asia with research, legal and tax advisory services and maintains offices throughout Asia as well as in Russia. For assistance please contact the firm at russia@dezshira.com or visit us at www.dezshira.com

 

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