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06 SEP 95
FM AMEMBASSY MOSCOW

SUBJECT: IMI: LOCATING A BUSINESS IN RUSSIA

SUMMARY

1.  BUSINESS IS RUSSIA IS PERSONAL AND LOCAL, AND
POTENTIALLY VERY LUCRATIVE.  TO BUILD SUBSTANTIAL
EXPORTS IN RUSSIA USUALLY REQUIRES A FULL-TIME
PRESENCE.  A REPRESENTATIVE IS NEEDED TO CULTIVATE
LOCAL BUSINESS AND GOVERNMENT CONTACTS, TO
ESTABLISH AND MANAGE DISTRIBUTORS, AND TO OVERCOME
THE MANY OBSTACLES TO DOING BUSINESS HERE.  THOUGH
ESTABLISHING AN OFFICE IN RUSSIA CAN BE ARDUOUS
AND EXPENSIVE, IT IS BETTER THAN THE ALTERNATIVES:
DOING BUSINESS FROM A DISTANCE (WHICH OFTEN GOES
NOWHERE), OR NOT DOING BUSINESS IN RUSSIA AT ALL
(WHICH MEANS IGNORING ONE OF THE MOST PROMISING
NEW MARKETS OF THE DECADE.)  THIS CABLE, PREPARED
BY COMMERCIAL OFFICER RICHARD STEFFENS AT U.S.
EMBASSY MOSCOW, PROVIDES AN OVERVIEW OF THE STEPS
INVOLVED IN ESTABLISHING A BUSINESS IN RUSSIA.
ENDSUMMARY.

WHICH CITY?

2.  RUSSIA IS NOT ONE MARKET, BUT A SERIES OF
REGIONAL MARKETS WHICH CANNOT BE COVERED FROM ONE
CITY, MUCH LESS FROM THE UNITED STATES.  YOU MUST
DECIDE WHERE TO START.  MOST FIRMS START IN
MOSCOW;  OTHERS HAVE OPTED FOR ST. PETERSBURG OR
VLADIVOSTOCK.

SELECTING THE OFFICE MANAGER.

3.  AT THIS TIME, WE USUALLY RECOMMEND THAT U.S.
COMPANIES ENTERING THE RUSSIA MARKET HIRE A U.S.
CITIZEN TO OVERSEE THE FIRST OFFICE.  U.S.
COMPANIES WANT AN OFFICE THAT MAINTAINS U.S.
BUSINESS STANDARDS, FOLLOWS U.S. BUSINESS CUSTOMS,
AND OBEYS U.S. LAWS.  ALTHOUGH RUSSIA HAS MANY
TALENTED ENTREPRENEURS AND MANAGERS, U.S. BUSINESS
PRACTICES ARE STILL NEW TO MOST OF THEM, AND IT IS
VERY DIFFICULT TO CLOSELY MONITOR AN OFFICE IN
RUSSIA FROM A DISTANCE.

4.  FOR THE FIRST OFFICE DIRECTOR, WE RECOMMEND AN
AMERICAN WITH CONSIDERABLE OVERSEAS EXPERIENCE,
PREFERABLY IN NIS OR EASTERN EUROPEAN MARKETS.
RUSSIAN LANGUAGE ABILITY, WHILE NOT CRUCIAL, IS
VERY HELPFUL.  ONE OPTION IS TO INTERVIEW AN
AMERICAN WHO IS IN RUSSIA ALREADY.  MANY COME HERE
IN SEARCH OF GOOD JOBS OR BUSINESS OPPORTUNITIES,
AND A GOOD NUMBER HAVE BECOME VERY SUCCESSFUL
OFFICE DIRECTORS FOR U.S. FIRMS.  FORMER PEACE
CORPS VOLUNTEERS AND OTHERS WITH SIMILAR ON-THE-
GROUND EXPERIENCE OFFER ADVANTAGES OVER NEWCOMERS,
BECAUSE THEY HAVE ALREADY OVERCOME THE FIRST
CULTURE SHOCK AND MASTERED MANY OF THE
FUNDAMENTALS OF DOING BUSINESS IN THIS COMPLEX
MARKET.

5.  IF YOU DECIDE TO SEND A PRESENT U.S. EMPLOYEE
OVERSEAS, SELECT THAT EMPLOYEE CAREFULLY.  RUSSIA
IS NOT FOR EVERYONE, AND IT TAKES A SPECIAL
TEMPERAMENT TO SUCCEED HERE.  BUSINESS IN RUSSIA
IS NOT FOR THE TIMID MIDDLE MANAGER WHO HAS NEVER
WORKED OUTSIDE THE U.S..  DO NOT PICK THE SHY, THE
UNIMAGINATIVE, OR THE UNADVENTUROUS, NOR THE
EASILY FRAZZLED OR FRUSTRATED.  AMERICANS WHO
CRAVE SAFETY, COMFORT, STRUCTURE, AND
PREDICTABILITY DO NOT DO WELL.  AMERICANS WHO
THRIVE ON CHALLENGE, CHAOS, AND ADVENTURE DO VERY
WELL.  MEETING THE CHALLENGES OF DOING BUSINESS IN
RUSSIA REQUIRES ALL THE STAMINA, FORTITUDE,
PERSEVERANCE, AND PATIENCE ONE CAN MUSTER.

PREPARING FOR AN ASSIGNMENT IN RUSSIA.

6.  A FIRST POINT OF CONTACT FOR ANY NEW FIRM
CONSIDERING THE RUSSIAN MARKET IS THE LOCAL U.S.
COMMERCIAL SERVICE DISTRICT OFFICE.  THERE,
INTERNATIONAL TRADE SPECIALISTS WILL BE HAPPY TO
EXPLAIN THE FULL ARRAY OF COMMERCIAL SERVICE
PROGRAMS FOR EXPORTERS.  SEEK INITIAL GUIDANCE ON
DOING BUSINESS IN RUSSIA FROM THE BUSINESS
INFORMATION SERVICE OF THE NEWLY INDEPENDENT
STATES (BISNIS) (PHONE 202-482-4655; FAX 202-482-
2293; E-MAIL [email protected].)  SEARCH THE
NATIONAL TRADE DATA BANK TO FIND INITIAL BUSINESS
LBADS (NATIONAL TRADE DATA BANK (PHONE 202-482-
1986; FAX 202-482-2164; E-MAIL: FTP-
[email protected] OR WWW.STAT-USA.GOV).

7.  WE STRONGLY SUGGEST THAT FUTURE OFFICE
DIRECTORS HAVE AT LEAST ONE MONTH OF FULL-TIME
RUSSIAN TRAINING.  A SMALL AMOUNT OF RUSSIAN GOES
A LONG WAY IN MAKING A PERSON FEEL AT HOME.  SPEND
TIME READING ABOUT RUSSIA -- ITS HISTORY AND
CULTURE, BEFORE YOU GO.  READ A GOOD RUSSIAN NOVEL
OR SOME SHORT STORIES.  BUY A GUIDE BOOK OR TWO.
FIND CONTACTS OR REFERRALS TO PEOPLE WHO ARE HERE
ALREADY.  BRING WARM CLOTHING, A REASONABLE AMOUNT
OF CASH, TRAVELLERS CHECKS, CREDIT CARDS (WHICH
ARE GREAT IN MOSCOW AND ST. PETE AND NEARLY
USELESS OUTSIDE).  BRING EXTRA COPIES OF PASSPORT
AND VISA.  HAVE A MEDICAL CHECK-UP AND GET NEEDED
SHOTS.  BRING LOTS OF SMALL PRESENTS FROM AMERICA,
LIKE SOUVENIRS FROM YOUR HOMETOWN OR CITY AND
PINS, PENS, OR BADGES WITH YOUR COMPANY'S LOGO.

8.  YOU WILL NEED A VISA.  OBTAIN ONE THROUGH THE
RUSSIAN EMBASSY IN WASHINGTON, OR ITS CONSULATES
IN NEW YORK, SAN FRANCISCO, OR SEATTLE.  YOU
USUALLY NEED A LETTER OF INVITATION FROM A RUSSIAN
ORGANIZATION TO OBTAIN THIS VISA.  IF YOU DO NOT
ALREADY HAVE A RUSSIAN PARTNER, CONTACT BISNIS FOR
A LIST OF RUSSIAN VISA FACILITATION SERVICES.

FINDING YOUR TEMPORARY OFFICE.

9.  FINDING A PERMANENT OFFICE TAKES TIME, AND YOU
WILL NEED A TEMPORARY LOCATION.  LUCKILY, MOSCOW
AND ST. PETERSBURG HAVE MANY FIRST-CLASS HOTELS
WITH 24-HOUR BUSINESS CENTERS CAPABLE OF MEETING
BASIC OFFICE NEEDS.  A GOOD TRAVEL OFFICE IN
AMERICA CAN ARRANGE RESERVATIONS.  OUTSIDE MOSCOW,
THE U.S. COMMERCIAL SERVICE HAS ESTABLISHED A
COMPREHENSIVE NETWORK OF AMERICAN BUSINESS CENTERS
WHICH CAN SERVE AS PERMANENT OR TEMPORARY
HEADQUARTERS.  CONTACT POINTS FOR THESE CENTERS
ARE:
  CHELYABINSK                 3512-623-782  FAX
3512-623-768 [email protected]
  KHABAROVSK                  4232-332-800  FAX
4232-332-971 [email protected]
  MINSK, BELARUS              0172-101-155  FAX
0172-101-157 [email protected]
  NIZNEVARTOVSK               3466-224-407  FAX
3466-224-430 [email protected]
  NIZHNY NOVGOROD             8312-372-213  FAX
8312-372-213 [email protected]
  NOVOSIBIRSK                 3832-235-569  FAX
3832-235-762 [email protected]
  ST. PETERSBURG              812-110-6042  FAX
812-311-0794 [email protected]
  VLADIVOSTOK                 4232-254-626  FAX
4232-254-661 [email protected]
  VOLGOGRAD                   8442-335-946  FAX
8442-362-732 [email protected]
  YEKATERINBURG               3432-555-689  FAX
3432-556-116 [email protected]
  YUZHNO-SAKHALINSK       (US)206-443-1935  FAX
206-443-0954 [email protected]

10.  PLAN A LARGE BUDGET FOR THIS INITIAL PERIOD.
MOSCOW AND ST. PETERSBURG HOTELS CAN COST AS MUCH
AS 400 USD PER NIGHT.  RUSSIAN-MANAGED HOTELS IN
BOTH MOSCOW AND OUTLYING CITIES OFTEN CHARGE
WESTERNERS OVER 100 USD PER NIGHT FOR, IN MANY
INSTANCES, HORRID QUALITY.

GETTING ORIENTED.

11.  BEFORE YOU MAKE ANY MAJOR DECISIONS, GET
ORIENTED.  TAKE A FEW DAYS TO ADJUST AND RECOVER
FROM JET LAG.  TAKE SOME TIME JUST WALKING AROUND
THE STREETS AND LEARNING TO USE THE METRO.  IN
MOSCOW, A GOOD FIRST WEEK:

O    VISIT THE U.S. COMMERCIAL SERVICE'S WEEKLY
     BUSINESS BRIEFING (WEDNESDAY MORNING AT
     10:00, RADISSON-SLAVYANSKAYA HOTEL AT
     KIEVSKAYA METRO)
O    VISIT THE COMMERCIAL SERVICE LIBRARY (15
     NOVINSKY BULVAR, OPEN FROM 10:00 TO 4:00)
O    REGISTER AT AMERICAN CITIZEN SERVICES AT THE
     EMBASSY (19 NOVINSKY BULVAR, THE OLD EMBASSY
     BUILDING)
O    JOIN THE AMERICAN CHAMBER OF COMMERCE AND
     ATTEND ITS LUNCHEON (AMERICAN CHAMBER OF
     COMMERCE 095-941-B435  FAX 095-941-8437,
     RADISSON SLAVYANSKAYA HOTEL)
O    GO ON AN ORIENTATION TO MOSCOW TOUR
     (PATRIARCHI DOM TOURS -- 095-255-4470)
IN ST. PETERSBURG OR VLADIVOSTOCK, CONTACT THE
U.S. COMMERCIAL SERVICE FOR SIMILAR ADVICE.  YOU
WILL HAVE SOME FORM OF CULTURE SHOCK FOR AT
LEAST
THE FIRST SIX MONTHS, AND THIS WILL COLOR YOUR
BUSINESS JUDGEMENT.  DO NOT DO MAJOR DEALS UNTIL
YOU HAVE BEEN HERE FOR A FEW WEEKS, AND DO NOT
SIGN ANYTHING WITHOUT CONSULTING AN ATTORNEY WITH
EXPERIENCE IN RUSSIA.

FINDING A LAWYER, BANK, ACCOUNTANT, REAL ESTATE
AGENT, AND SECURITY FIRM.

12.  USE THESE INITIAL MEETINGS AND YOUR CONTACTS
TO GET INTO THE U.S. BUSINESS NETWORK.  FIND A
LAWYER, BANK, ACCOUNTANT, REAL ESTATE AGENCY, AND
SECURITY FIRM.  IF YOU WORK WITH A MAJOR U.S.
ACCOUNTING OR LAW FIRM, FIND OUT IF THEY HAVE
OFFICES IN MOSCOW OR ST. PETERSBURG.  IF YOU ARE
IN THE UNITED STATES, BISNIS MAINTAINS LISTS OF
PROFESSIONAL FIRMS AND BANKS LOCATED IN RUSSIA.
ONCE IN RUSSIA, LOCAL ENGLISH-LANGUAGE
PUBLICATIONS IN MOSCOW AND ST. PETERSBURG HAVE
LISTINGS OF THESE COMPANIES.  U.S. COMMERCIAL
SERVICE OFFICES AND AMERICAN BUSINESS CENTERS ALSO
MAINTAIN INFORMATION ON LOCAL ATTORNEYS,
ACCOUNTANTS, REAL ESTATE AGENTS, AND SECURITY
FIRMS.

REGISTERING YOUR COMPANY.

13.  COMPANY REGISTRATION IS COMPLEX.  DON'T TRY
TO DO IT YOURSELF.  FIND A GOOD LAW FIRM TO DO IT
FOR YOU.
O    U.S. EMBASSY OR CONSULATE (FOR SECURITY AND
PASSPORT REPLACEMENT)
O    U.S. COMMERCIAL SERVICE (FOR INCLUSION IN
U.S. FIRMS IN RUSSIA BOOK)
O    CITY GOVERNMENT
O    RUSSIAN MINISTRY OF FINANCE (IF YOU ARE
MAKING A MAJOR INVESTMENT)
O    RUSSIAN TAX INSPECTORATE
O    APPROPRIATE MINISTRY
FINDING A LOCATION.

14.  YOUR REAL ESTATE AGENT IS YOUR BEST GUIDE TO
THE REAL ESTATE MARKET.  RENTAL RATES ARE
CONFUSING.  THE HIGHEST PRICES ARE IN MOSCOW AND
ST. PETERSBURG.  THE PRICE YOU FACE WILL OFTEN
DEPEND ON YOUR PERSISTENCE IN THE SEARCH, LUCK,
AND NEGOTIATING SKILL.  INFORMATION FLOW IS VERY
ERRATIC.  THE MORE WESTERNIZED A SITE, THE MORE
PUBLICIZED, AND THE CLOSER TO THE CITY CENTER --
THE HIGHER THE PRICE.  IF YOU DON'T WANT OR NEED
STREET-LEVEL BUSINESS, CONSIDER A LOCATION OUTSIDE
THE CITY CENTER.  YOU WILL FIND MUCH LOWER RENTS,
AND OFTEN MORE COOPERATIVE PEOPLE.  RUSSIAN
CONCEPTS OF PROPERTY AND CONTRACT DIFFER MARKEDLY
FROM WESTERN CONCEPTS.  YOU WILL LEARN MUCH ABOUT
THESE DIFFERENCES AS YOU NEGOTIATE (AND THEN RE-
NEGOTIATE) LEASES.  EXPECT THE UNEXPECTED; AND, IF
YOU EVER FIND A COHERENT EXPLANATION OF MOSCOW
PROPERTY AND REAL ESTATE LAWS, PLEASE LET US KNOW.
OUTSIDE MOSCOW AND ST. PETERSBURG, PRICES ARE
LOWER, BUT QUALITY IS HARD TO FIND.

15.  WHEN YOU ARE PICKING A SITE, YOU ARE ALSO
PICKING A LANDLORD.  THE LANDLORD'S CONNECTIONS
AND CHARACTER ARE OFTEN MUCH MORE IMPORTANT THAN
THE SIZE AND SHAPE OF THE OFFICE SPACE OR THE AGE
OF THE BUILDING.  THE LANDLORD-TENANT
RELATIONSHIP, LIKE MOST RELATIONSHIPS IN RUSSIA,
CAN HAVE SEVERAL DIMENSIONS.  BUSINESS IN RUSSIA
IS PERSONAL AND LOCAL.  THE RIGHT LANDLORD CAN BE
AN IMPORTANT ALLY IN FINDING AND SCREENING
BUSINESS PARTNERS AND RUSSIAN EMPLOYEES, RESOLVING
PROBLEMS WITH THE GOVERNMENT, PROTECTING YOU FROM
CRIMINALS, AND EVEN FINDING NEW CUSTOMERS.  LOOK
FOR A LANDLORD WITH SIMILAR BUSINESS INTERESTS.
FOR EXAMPLE, IF YOU ARE A COMPUTER FIRM, CONSIDER
LOCATING AT A RUSSIAN COMPUTER INSTITUTE.  HOPE
THAT YOUR RELATIONSHIP WITH YOUR LANDLORD DEVELOPS
INTO AN EMOTIONAL, MUTUALLY BENEFICIAL WEB OF
FRIENDSHIP, BARTER, DEAL-MAKING, AND SHARING.

16.  CREATING A COMPLETELY WESTERN-STYLE OFFICE IN
RUSSIA IS FRUSTRATING, COSTLY, PROBABLY
IMPOSSIBLE, AND ULTIMATELY POINTLESS.  WESTERN
COMPANIES SOMETIMES SPEND SO MUCH TIME TRYING TO
SET UP A WESTERN-STYLE OFFICE THAT THEY NEGLECT
THEIR PRIMARY FUNCTION -- TO DO BUSINESS.  IF YOU
ARE JUST STARTING, CONSIDER THE OPTION OF RENTING
SPACE IN AN EXISTING RUSSIAN OR AMERICAN OFFICE.
(OUTSIDE MOSCOW, CONSIDER SPACE IN AN ABC). UNLESS
YOUR OFFICE'S LOOK WILL DETERMINE YOUR SALES,
CONSIDER SIMPLY PUTTING COMPUTER AND
COMMUNICATIONS EQUIPMENT INTO AN EXISTING
FURNISHED RUSSIAN OFFICE -- WITHOUT MAJOR CHANGE.
MAJOR RENOVATION WILL PROVE DISRUPTIVE, COSTLY AND
LENGTHY.

FINDING AN APARTMENT.

17.  YOU WILL WANT A COMFORTABLE, SAFE APARTMENT.
HAVING A FEW WESTERN NEIGHBORS DOES MUCH TO HELP
YOUR SECURITY AND SANITY.  CHECK BUILDING SECURITY
CAREFULLY.  IS THERE A GUARD?  HOW IS ACCESS
CONTROLLED?  WHAT IS THE NEIGHBORHOOD LIKE?  GET A
SECURITY DOOR.  THE APARTMENT SEARCH WILL RESEMBLE
THE OFFICE SEARCH.  ONCE AGAIN, WORK WITH YOUR
REAL ESTATE AGENT AND SECURITY FIRM.  A WESTERN-
STYLE THREE-BEDROOM APARTMENT NEAR THE CITY CENTER
CAN COST AS MUCH AS 5,000 USD PER MONTH.  WE HAVE
HEARD REPORTS OF LARGE DACHAS OUTSIDE MOSCOW
RENTING FOR 250,000 USD PER YEAR.  AT THE SAME
TIME, YOUNG AMERICANS HAVE FOUND SMALL APARTMENTS
IN OLD BUILDINGS OUTSIDE THE CENTER FOR AS LITTLE
AS 200 USD PER MONTH.  OUTSIDE MOSCOW AND ST.
PETERSBURG, ONCE AGAIN, PRICES ARE LOWER, BUT SO
IS QUALITY.

RUNNING THE OFFICE.

18.  THE LOGISTICS OF RUNNING AN OFFICE IN RUSSIA
CAN BE OVERWHELMING.  FORTUNE 100 GENERAL MANAGERS
HERE OFTEN COMPLAIN THAT THEY SPEND MUCH TIME
GETTING COPIER PAPER AND FIXING THE COMPUTERS.
MANY OFFICES ARE UNDER NEAR CONSTANT RENOVATION,
AND OTHERS MIGRATE FROM PLACE TO PLACE FLEEING
LANDLORD DISPUTES.  THE SHEER DIFFICULTY OF THE
TRIVIAL, THE TENDENCY OF BRAND-NEW EQUIPMENT TO
STOP WORKING ONCE ITS REACHES RUSSIA, AND THE
INCREDIBLE EFFORT NEEDED TO GET ANYTHING REPAIRED
CAN TURN THE CALMEST OFFICE DIRECTORS INTO SURLY
TYRANTS WITHIN A FEW MONTHS.  WE SUGGEST EMPLOYING
THE RUSSIAN METHOD -- DUPLICATION OF RESOURCES.
GET EXTRA COPIERS, COMPUTERS, AND FAX MACHINES;
AND HIRE AT LEAST ONE PERSON WHOSE SOLE JOB IS TO
KEEP THE OFFICE GOING.  CONSIDER BUYING LOCALLY,
BECAUSE DUTIES AND CUSTOMS HASSLES CAN BE
EXPENSIVE AND TIME-CONSUMING.  MOST BUSINESS
EQUIPMENT IS AVAILABLE IN MOSCOW, THOUGH PRICES
MAY BE HIGHER AND SELECTION LOWER THAN IN THE
WEST.  (RUSSIAN APPLIANCES OPERATE ON EUROPEAN,
NOT AMERICAN VOLTAGES; ANOTHER REASON NOT TO BRING
THINGS FROM HOME.)

19.  COMMUNICATION IS A PERPETUAL PROBLEM IN
RUSSIA.  THE POSTAL SERVICE IS SLOW AND
UNRELIABLE, AND THE TELEPHONE SYSTEM WILL
EVENTUALLY REDUCE YOU TO TEARS.  CONSIDER BUYING
CELLULAR PHONES  -- LOCALLY.  THESE ARE ESPECIALLY
USEFUL WHEN YOU ARE LOST ON THE WAY TO A MEETING.
CONSIDER A SATELLITE PHONE AND FAX TO HELP WITH
INTERNATIONAL COMMUNICATION.  ELECTRONIC MAIL IS
ONE OF THE BEST COMMUNICATION METHODS IN RUSSIA
TODAY, PARTLY BECAUSE ELECTRONIC MAIL ENABLES YOU
TO BYPASS THE CONFUSED RECEPTIONIST WHO SO OFTEN
PICKS UP THE PHONE IN A RUSSIAN OFFICE.  GET AN E-
MAIL ADDRESS AND MAKE SURE IT IS PRINTED ON YOUR
CARDS.  MOSCOW AND ST. PETERSBURG HAVE A NUMBER OF
U.S. TELECOMMUNICATION FIRMS THAT CAN ARRANGE
COMMUNICATION FOR YOUR COMPANY.

20.  HIRE A LOCAL DRIVER WITH HIS OR HER OWN CAR.
FOREIGN-MADE CARS (ESPECIALLY WITH FOREIGN LICENSE
PLATES) ATTRACT MUCH UNWANTED ATTENTION FROM BOTH
CRIMINALS AND THE BRIBE-HUNGRY LOCAL MILITIA.  A
LOCAL DRIVER WHO KNOWS THE ROADS AND THE TRAFFIC
LAWS, AND CAN MAINTAIN HIS OWN VEHICLE, WILL SAVE
YOU THE HASSLES OF LEARNING ROADS AND TRAFFIC
LAWS, AND MAINTAINING YOUR OWN VEHICLE.

HIRING EMPLOYEES.

21.  THE RUSSIANS ARE A LITERATE AND CULTURED
PEOPLE.  RUSSIANS, TYPICALLY, READ WIDELY AND HAVE
A BROAD RANGE OF INTERESTS AND ABILITIES.  RUSSIAN
EMPLOYEES USUALLY HAVE GOOD TECHNICAL EXPERTISE
AND EXCELLENT RESEARCH ABILITIES;  THEY ARE OFTEN
VERY GOOD AT WORKING IN ENGLISH, AND OTHER
LANGUAGES AS WELL.  WHEN MOTIVATED, THEY PRODUCE
WORK OF ASTOUNDING PRECISION AND QUALITY.
RUSSIANS CAN BE ADEPT AT IMPROVISING, AND FINDING
QUICK SOLUTIONS IN A CRISIS.  (RUSSIANS ALSO MAY
LET THINGS BECOME CRISES BEFORE ACTING.)  YOU WILL
NEED RUSSIAN EMPLOYEES FOR THEIR ABILITY TO
ACCOMPLISH THINGS IN RUSSIA, AND TO EXPLAIN THE
COUNTRY TO YOU.

22.  REMEMBER THAT RUSSIANS WERE BROUGHT UP IN A
COMMAND ECONOMY, WHERE THE GOVERNMENT AND THE BOSS
MADE MOST MAJOR DECISIONS.  THE SYSTEM DID NOT
REWARD -- AND OFTEN PUNISHED -- INDIVIDUAL
INITIATIVE AND INDEPENDENT JUDGEMENT.  NEWLY HIRED
RUSSIANS WILL NEED SEVERAL MONTHS TO ADAPT TO THE
MORE FREE-WHEELING AMERICAN STYLE.  DURING THE
FIRST FEW MONTHS, YOU MAY BE OVERWHELMED BY
REQUESTS FOR DIRECTION ON THE MOST MUNDANE
DECISIONS.  YOU MAY NOTICE THAT YOUR NEW EMPLOYEES
RESPOND VERY QUICKLY TO DIRECT INSTRUCTION, YET
STOP COMPLETELY WITHOUT IT, AND OFTEN FAIL TO
FOLLOW UP.  NEW RUSSIAN EMPLOYEES WILL LACK A
SENSE OF HOW A WESTERN BUSINESS OPERATES, AND THE
SOVIET SYSTEM WAS ANYTHING BUT CUSTOMER-FRIENDLY.

23.  BE WARY OF RUSSIAN EMPLOYEES WITH MIXED
LOYALTIES.  WHILE MOST RUSSIAN EMPLOYEES WILL
REWARD YOU WITH OUTSTANDING LOYALTY, A FEW WILL BE
UNABLE TO BREAK OLD HABITS OF RUNNING SEPARATE,
COVERT BUSINESSES ON THE SIDE.  A NEW RUSSIAN
MANAGER MAY SOMETIMES BECOME MORE "LEADER OF THE
WORKERS' COLLECTIVE" THAN LOYAL SUBORDINATE.  BE
CLEAR THAT YOU EXPECT LOYALTY AND INTEGRITY.  BE
PREPARED TO FIRE ANYONE UNSCRUPULOUS.  (IF YOU
AREN'T FIRM AT FIRST, THE TROUBLE SPREADS.)

24.  EXPECT THAT EACH NEW EMPLOYEE WILL NEED A
FOUR-MONTH ADJUSTMENT PERIOD.  COMMUNICATE YOUR
EXPECTATIONS, AND EXPLAIN AMERICAN WAYS OF DOING
BUSINESS.  ALSO, LISTEN TO YOUR RUSSIAN EMPLOYEES
AND LEARN ABOUT RUSSIAN WAYS.  INVEST IN TRAINING,
ESPECIALLY ON U.S. BUSINESS AND OFFICE PRACTICES.
CONSIDER SENDING KEY EMPLOYEES TO AMERICA TO
OBSERVE HOW THE HOME OFFICE OPERATES.

25.  WAGES AND PRICES IN RUSSIA ARE SUBJECT TO
WIDE VARIATION AND UNCERTAINTY.  RUSSIA IS NOT YET
A MODERN ECONOMY WITH FREE-FLOWING GOODS,
SERVICES, AND INFORMATION.  WAGES ARE HIGHEST IN
MOSCOW, ST. PETERSBURG, THE OIL PRODUCING REGIONS
IN SIBERIA AND THE FAR EAST; THEY ARE LOWEST IN
RUSSIA'S RURAL AREAS AND DEPRESSED INDUSTRIAL
CITIES.  A PENZA FACTORY WORKER MAY MAKE USD 25
PER MONTH AND BE HAPPY TO BE PAID;  A BILINGUAL
ACCOUNTANT IN MOSCOW CAN MAKE OVER USD 25,000
ANNUALLY.  DESPITE OCCASIONAL PLEADINGS FOR
DOLLARS FROM YOUR RUSSIAN EMPLOYEES, YOU SHOULD
PAY IN RUBLES AND FILE APPROPRIATE DOCUMENTS WITH
THE GOVERNMENT.  BE SURE TO WORK WITH YOUR
ACCOUNTANT TO FILE ALL NECESSARY TAX AND SOCIAL
SECURITY FORMS FOR YOUR EMPLOYEES.  MOST HIRING IN
RUSSIA IS DONE THROUGH PERSONAL REFERRALS.  IN
MOSCOW AND ST. PETERSBURG, A NUMBER OF PERSONNEL
AGENCIES CAN HELP YOU FIND TEMPORARY AND PERMANENT
HELP.

26.  BEING THE ONLY WESTERNER IN AN ALL-RUSSIAN
OFFICE CAN BE STRESSFUL AND LONELY, AND HIRING A
SECOND AMERICAN CAN MAKE THE OFFICE DIRECTOR'S JOB
MUCH EASIER.  WITH A SECOND AMERICAN STAFFER, THE
AMERICAN OFFICE DIRECTOR CAN LEAVE THE OFFICE TO
RETURN TO THE STATES OR TO EXPLORE NEW RUSSIAN
REGIONS WITH MORE CONFIDENCE THAT BUSINESS WILL BE
CARRIED ON AS USUAL IN HIS OR HER ABSENCE.
CONSIDER HIRING A RUSSIAN-SPEAKING AMERICAN FROM
THE LOCAL WESTERN COMMUNITY.

WHAT THE HOME OFFICE SHOULD EXPECT.

27.  HOME OFFICE EXPECTATIONS ARE OFTEN VERY HIGH.
THE RUSSIAN MARKET IS INDEED LUCRATIVE, BUT IT
USUALLY TAKES THE OFFICE DIRECTOR ABOUT SIX MONTHS
TO GAIN THE CONTACTS AND EXPERIENCE TO OPERATE
HERE.  AS THE EX-PAT OFFICE DIRECTOR GAINS
EXPERIENCE, THERE MAY BE INCREASED CONFLICT WITH
THE HOME OFFICE.  TYPICALLY, THE HOME OFFICE
DEMANDS TOO MUCH, TOO FAST; OFTEN, THE OFFICE DOES
NOT UNDERSTAND HOW DIFFICULT A SIMPLE REQUEST
(LIKE DELIVERING A LETTER TO ROSTOV) CAN BE.  TO
SUCCEED IN RUSSIA REQUIRES INTENSE FOCUS -- ON
SELLING AND DELIVERING PRODUCT -- AND THE OFFICE
DIRECTOR MUST FIGHT OFF DISTRACTING SIDE VENTURES
AND PROJECTS.  THE HOME OFFICE SHOULD RESPECT THIS
LOCAL JUDGEMENT, EVEN IF NORMS AT HOME ARE
DIFFERENT.

LIVING IN RUSSIA.

28.  MANY THOUSANDS OF AMERICANS HAVE GROWN TO
LOVE LIVING IN RUSSIA.  RUSSIA IS FULL OF
FRIENDLY, HOSPITABLE PEOPLE; MAJESTIC FORESTS AND
CHARMING VILLAGES; MAJESTIC CATHEDRALS AND
KREMLINS AND ASTONISHING MUSEUMS;  AND SUPERB
BALLET, OPERA, AND THEATER COMPANIES.  MOREOVER,
TO LIVE IN RUSSIA TODAY IS TO BE A PART OF
HISTORY.  MANY ARE ATTRACTED TO THE EXCITEMENT OF
PENING UP NEW MARKETS, INTRODUCING NEW IDEAS AND
TECHNIQUES, AND BUILDING NEW FRIENDSHIPS WITH A
ONCE DISTANT PEOPLE.  WHILE RUSSIA HAS ITS
HARDSHIPS, THESE ARE MORE THAN OFFSET BY THE
ATTRACTIONS.

29.  LIVING IN MOSCOW IS SIMULTANEOUSLY VERY
EXPENSIVE AND VERY CHEAP.  EXPECT TO PAY MAINLY IN
RUBLES; SOMETIMES WITH CREDIT CARDS; AND NEVER IN
DOLLARS (ITS A CRIME).  WESTERN IMPORTS WILL COST
MUCH MORE THAN IN THE UNITED STATES.  LOCAL GOODS
CAN BE QUITE INEXPENSIVE.  IN A JOINT VENTURE
SUPERMARKET, EXPECT TO PAY 3 USD FOR A CAN OF CAT
FOOD (OR 15 USD FOR AN ARTICHOKE).  SEVERAL BLOCKS
AWAY, YOU CAN BUY GOOD BANANAS IN A RUSSIAN
FARMER'S MARKET FOR 2 USD A BUNCH, OR BREAD FROM A
RUSSIAN BAKERY FOR AS LITTLE AS 25 CENTS A LOAF.
CONSIDER PAYING FOR THE SHIPMENT OF PERSONAL
ITEMS, AND PERHAPS 1000 POUNDS OF BOXED OR CANNED
FOOD.  ALTHOUGH MOST WESTERN CONSUMER PRODUCTS ARE
AVAILABLE IN MOSCOW, IT MAY TAKE HOURS TO FIND
THEM;  AND, AFTER A TOUGH DAY AT WORK, YOU WON'T
WANT TO STRUGGLE TO FIND DINNER.  EXPATRIATES
EMPLOYEES SHOULD PAY RUSSIAN INCOME TAXES, WHICH
ARE ROUGHLY COMPARABLE TO AMERICAN INCOME TAXES.
DO NOT ATTEMPT TO DO THIS WITHOUT CONSULTING AN
ACCOUNTANT WITH EXPERIENCE IN RUSSIAN TAX LAW.

30.  TRANSPORTATION WITHIN RUSSIA REMAINS FAIRLY
INEXPENSIVE.  YOU CAN FLY ANYWHERE IN THE COUNTRY
FOR UNDER 500 USD.  TRAIN FARES, EVEN FOR FIRST
CLASS CABINS AND FOR VERY LONG DISTANCES, REMAIN
REASONABLE.  TWO FIRST CLASS BERTHS FOR A 20-HOUR
TRIP TO SAMARA COST ONLY 20 USD.  RUSSIAN AIRLINES
SOMETIMES CHARGE DIFFERENT PEOPLE DIFFERENT PRICES
-- AND THE LOGIC IS NOT ALWAYS CLEAR.  FOR ONE
TWO-HOUR FLIGHT TO THE URALS, FOUR PEOPLE IN A
U.S. GOVERNMENT DELEGATION WERE CHARGED THREE
DIFFERENT PRICES -- RANGING FROM 30 USD TO 120
USD.  INCREASING COMPETITION HAS BROUGHT MORE
REASONABLE RESTAURANT PRICES IN MOSCOW AND ST.
PETERSBURG.  WHERE ONCE PATRONS HAD TO CHOOSE
BETWEEN THE OUTRAGEOUSLY EXPENSIVE WESTERN-STYLE
(A 70 USD BRUNCH) AND THE CHEAP, THOUGH AWFUL
SOVIET-STYLE (LESS THAN A DOLLAR FOR A MAIN COURSE
AT A STALOVAYA), NOW A MIDDLE RANGE HAS EMERGED.
A WESTERN ENTREPRENEUR HAS INTRODUCED A DOZEN
REASONABLY PRICED RESTAURANTS TO THE CAPITAL.
RUSSIAN ENTREPRENEURS HAVE FOLLOWED SUIT, AND NOW
YOU CAN GET A 10 USD PIZZA ON OLD ARBAT, AND A 3
USD CAPPUCINO.  OTHER RUSSIAN CITIES STILL AWAIT
THEIR RESTAURANT ENTREPRENEURS.

31.  DO NOT LET MEDIA STORIES ABOUT CRIME DETER
YOU.  RUSSIAN CITIES ARE STILL SAFER THAN MANY
U.S. CITIES.  KEEP A LOW PROFILE;  AVOID SEEDY
NIGHTCLUBS;  LOCK YOUR DOORS;  DO NOT TAKE
UNMARKED TAXIS AFTER DARK; AND YOU SHOULD BE
REASONABLY SAFE.  WHEN OUTSIDE YOUR APARTMENT,
CARRY EMERGENCY NUMBERS IN YOUR WALLET.  ALWAYS
KEEP A PROPYSK OR PASSPORT WITH YOU, AND A COPY OF
YOUR PASSPORT IN YOUR APARTMENT OR OFFICE.

BEATING CULTURE SHOCK.
32.  CULTURE SHOCK IS THE STRESS CAUSED BY RAPID
EXPOSURE TO A DIFFERENT CULTURE.  UNDER THIS
STRESS, PEOPLE THINK DARK THOUGHTS.  MINOR
INCONVENIENCE BECOMES HUGE ANNOYANCE.  SLIGHT
CONCERN BECOMES OBSESSIVE PARANOIA.  PEOPLE
SUFFERING FROM CULTURE SHOCK IN RUSSIA DECIDE THAT
MOST AEROFLOT FLIGHTS CRASH, THAT NEARLY EVERYONE
GETS GASSED ON TRAINS, THAT MOST RUSSIANS ARE
STARVING OR MAFIA, AND THAT ALL THE VEGETABLES ARE
RADIOACTIVE.  (THEY AREN'T.  WE CHECKED.)  MUCH OF
OUR POPULAR WISDOM ABOUT RUSSIA IS REALLY JUST
CULTURE SHOCK.  RECOGNIZE CULTURE SHOCK FOR WHAT
IT IS.  YOUR MORE EXTREME THOUGHTS ABOUT RUSSIA
(MOST OF THEM, AT LEAST) ARE REALLY SYMPTOMS OF
IT.  ADJUSTING FROM ONE CULTURE TO ANOTHER IS
STRESSFUL.  YOU WILL FEEL DEPRESSED, FRUSTRATED,
OVERWHELMED, AND SURROUNDED.  (OTHER TIMES, THIS
ISN'T CULTURE SHOCK;  YOU'RE JUST HAVING A BAD
WEEK.)

33.  BEATING CULTURE SHOCK IN RUSSIA IS LIKE
GETTING OVER A LARGE STONE WALL.  YOU GET BRAVE
AND CLIMB OVER THE WALL;  OR YOU REMAIN CAUTIOUS
AND KEEP SLAMMING INTO IT.  THERE ARE TWO TYPES OF
U.S. BUSINESSPEOPLE HERE: ONE TYPE FIGURES THE
SYSTEM OUT, THE OTHER TYPE DOESN'T.  THE FIRST
TYPE, VERY QUIETLY, MAKES GOOD RUSSIAN CONTACTS,
AND STARTS TO MAKE A LOT OF MONEY.  THE SECOND
TYPE NEVER UNDERSTANDS THE PLACE, SPENDS A LOT OF
TIME IN A VERY WESTERN OFFICE AND WESTERN HOTEL
WHINING ABOUT HOW AWFUL RUSSIA IS, AND FINALLY
GOES HOME, FRUSTRATED, TELLING EVERYONE ELSE THE
RUSSIANS ARE IMPOSSIBLE.

34.  COPE WITH CULTURE SHOCK THE SAME WAY YOU
WOULD COPE WITH STRESS IN THE UNITED STATES.  TALK
TO PEOPLE ABOUT THE PROBLEMS.  GET OUT OF RUSSIA
EVERY FOUR MONTHS TO TAKE A BREAK.  GET REGULAR
EXERCISE.  FOCUS MORE THAN USUAL ON GETTING GOOD
THINGS TO EAT AND ENOUGH SLEEP.  DON'T DO 100-HOUR
WEEKS HERE;  THEY WILL PUT YOU IN A HOSPITAL, AND
A RUSSIAN HOSPITAL IS NOT A GOOD PLACE TO BE.
ABOVE ALL, HAVE A SENSE OF HUMOR, AND FOCUS ON THE
POSITIVE.

35.  PUSH YOURSELF INTO RUSSIA LITTLE BY LITTLE.
START WITH A VISIT TO THE BALLET, THEN TRY AN
OPERA.  GO SEE THE KREMLIN AND THE HERMITAGE.
TAKE A TOUR OF A ANOTHER CITY.  TRY OUT RUSSIAN OR
GEORGIAN RESTAURANT.  RIDE A BOAT DOWN THE MOSCOW
RIVER OR A ST. PETERSBURG CANAL.

WELCOME TO RUSSIA.

36.  THOUGH RUSSIA IS A TOUGH PLACE TO DO
BUSINESS, IT CAN BE DONE, AND IT IS BEING DONE.
MORE THAN 700 U.S. FIRMS, LARGE AND SMALL, ARE
OPERATING IN RUSSIA TODAY.  THE LOCAL AMERICAN
CHAMBER OF COMMERCE HAS OVER 300 MEMBERS, AND IS
ONE OF THE FASTEST GROWING CHAMBER OF COMMERCE IN
THE WORLD.  ONCE AGAIN, IF YOU ARE CONSIDERING
OPENING AN OFFICE IN RUSSIA, CONTACT YOUR LOCAL
U.S. COMMERCIAL SERVICE DISTRICT OFFICE.  ONCE YOU
ARRIVE IN RUSSIA, PLEASE MAKE ONE OF THE U.S.
COMMERCIAL SERVICE OFFICES (IN MOSCOW, ST.
PETERSBURG, VLADIVOSTOK, OR YEKATERINBURG) YOUR
FIRST POINT OF CALL.
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