International Business Opportunities

Russia’s Prime Minister Mikhail Fradkov said Thursday that major Russian insurance companies could be taken over by foreign investors following the country’s accession to the World Trade Organization (WTO).[…]
Only three to five Russian insurance companies may be capable of competing with foreign insurers following Russia’s accession to the WTO, he said.[…]

Currently, foreign insurers cannot set up direct branches operating under foreign law in Russia and are only allowed to set up subsidiaries that comply with Russian legislation. However, last year Russia agreed to allow foreign insurers set up branches in Russia nine years after it accedes to the WTO. The agreement was part of a landmark WTO deal with the U.S.

At present, foreign investors are allowed to hold a combined stake of up to 35% in Russia’s insurance industry. In November 2006, the Economic Development and Trade Ministry said that Russia would be able to increase the limit to 50% after its accession to the WTO.
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In Russia, a bill expected to be approved Friday by the Federation Council, would give authorities the power to dictate how the land is developed. The legislation would allow authorities to reserve land for their own use.

An option of up to 7 years could be taken out on land leased or owned by individuals or companies, while an option of up to 20 years could be taken out on unoccupied land. The bill also says landowners and leasers may not be compensated for construction or any other improvements on reserved land. […]

The real estate community is buzzing with worries that the legislation will harm construction and open the door to corruption.
Although Western countries also have laws that allow the government to seize land in certain circumstances, land ownership is a touchy issue in Russia after 70 years of Soviet state ownership. Also, Western countries do not face the same challenges with corruption as Russia.
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557 government corporations and 573 federal state unitary enterprises will be privatized in Russia in 2008. That, according to the draft program for privatizing federal property.

The involved sectors are: fuel-energy, energy-building, construction, lumber, civil aviation, healthcare, chemical, petrochemical, polygraphic industry, geology, fishery, poultry farming, crop growing, cattle breeding, medical industry, and machine-building.

The privatization will also concern enterprises of automobile transport, road facilities, oil-gas and fuel sectors, sea and river transport. (source)

The protocol signed last March 26, by the heads of the Russian and Chinese customs on the “organisation of experimental exchange of information in mutual trade“, will also reduce the costs for exporters. The Protocol regulates the electronic exchange of information on goods and means of transport when goods are being imported into each country.

This information should, at least in theory, allow for an easier and quicker control of the veracity of exporters’ customs declarations.

Thus, the Protocol aims to speed up customs registration at border points of control.
It should be underlined that the electronic exchange of such information also aims to result in a reduction of the costs being incurred by exporters. Indeed, as the information on exported goods will be electronically available for the customs authorities of the country of importation, the exporter is likely to bear to a lesser extent the heavy administrative burden of filling in all the necessary documents.
(source)

A report released yesterday over the attractiveness to investment of cellular communications markets in different countries, shows a high potential for growth in Asia and in the CIS countries (former Soviet Union).

The ten countries with the highest levels of attractiveness to investment include seven countries in South and Southeast Asia (Bangladesh, China, India, Indonesia, The Philippines, Sri Lanka, and Pakistan) and three from the CIS (Russia in 5th place, Ukraine in 7th, and Uzbekistan in 9th). […]

Central and Eastern Europe have lost much of their investment potential over the last two years as they have become increasingly saturated in terms of cellular network coverage. So European countries are offering increasingly few opportunities for investors, as the U.S. and Canada are still considered good targets for investment.

The report was carried out by a group of experts from the London Business School, Cambridge University, and the Russian School of Economics. (source: kommersant)