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Doing business in St. Petersburg 2 Enterprise Europe Network - , Module A Regional Center – St. Petersburg | www.doingbusiness.ru

Doing business in St. Petersburg Enterprise Europe Network - Russia, Module A Regional Center – St. Petersburg | www.doingbusiness.ru 3

Doing business in St. Petersburg Guide for exporters, investors and start-ups Current publication was developed by and under supervision of the Enterprise Europe Network - Russia, Gate2Rubin Consortium, Module A Regional Center – St. Petersburg operated by St. Petersburg Foundation for SME Development with the assistance of the relevant legal, human resources, certification, research and real estate firms.

© 2012 The Enterprise Europe Network - Russia, Gate2Rubin Consortium, Module A Regional Center – St. Petersburg operated by St. Petersburg Foundation for SME Development. All rights reserved. International copyright. Any use of materials of this publication is possible only after written agreement of St. Petersburg Foundation for SME Development and relevant contributing firms.

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Table of contents Welcome to St. Petersburg ...... 7 1. The city ...... 8 1.1. Geography ...... 8 1.2. Public holidays and business hours ...... 9 1.3. Population ...... 9 1.4. Political system ...... 10 1.5. Economy ...... 13 1.6. Foreign trade ...... 15 1.7. Foreign investments ...... 17 2. Key business sectors ...... 19 2.1. Overview of St. Petersburg’s industry ...... 19 2.2. Automotive industry ...... 22 2.3. Food and beverage production ...... 25 2.4. Information and communication technology (ICT) ...... 30 2.5. Pharmaceutical industry ...... 37 2.6. Shipbuilding industry ...... 42 2.7. Transport and logistics ...... 46 3. Business solutions ...... 55 3.1. Headquarters ...... 56 3.2. Research & Development ...... 58 3.3. Production сenter ...... 61 3.4. Distribution сenter ...... 68 3.5. Test market ...... 70 4. Doing business ...... 72 4.1. Establishing a legal presence ...... 72 4.2. Foreign investments ...... 80 4.3. Taxation ...... 85 4.4. Contracts ...... 92 4.5. Employment ...... 95 4.6. Product conformity assurance in Russia ...... 102 4.7. Intellectual property rights and franchising ...... 108 4.8. Special economic zones (“SEZ”) in St. Petersburg ...... 114 4.9. Public private partnerships and infrastructure development ...... 116 4.10. Obtaining rights to state-owned land in St. Petersburg ...... 120 4.11. Buyout of land plots in St. Petersburg...... 129 4.12. Regulatory issues. Antimonopoly compliance ...... 133 5. Costs of doing business ...... 142 5.1. Costs of starting a company ...... 142 5.2. Human resources ...... 144 5.3. Office, retail and warehouse market ...... 148 5.4. Communication ...... 154 5.5. Utilities ...... 155

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6. SME support ...... 157 6.1. Overview ...... 157 6.2. Definition of SME – EU vs. Russia ...... 157 6.3. Statistics ...... 158 6.4. SME support and development programs ...... 160 7. Contacts of the business support infrastructure ...... 164 7.1. Overview of the business support infrastructure in St. Petersburg ...... 164 7.2. Authorities ...... 164 7.3. Investment support ...... 166 7.4. SME business cooperation support ...... 167 7.5. SME support ...... 168 7.6. Financial support ...... 170 7.7. Techno parks and business incubators ...... 172 7.8. Educational programs and internships ...... 174 7.9. Chambers of commerce and industry ...... 175 7.10. Business associations ...... 175 7.11. Audit, tax and consulting firms ...... 176 7.12. Banks ...... 177 7.13. Certification and testing ...... 177 7.14. Exhibitions ...... 178 7.15. Law firms ...... 178 7.16. Real estate ...... 179 7.17. Recruitment ...... 179 7.18. Transport and logistics ...... 180 8. Authors and contributors ...... 182

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Welcome to St. Petersburg

I would like to welcome you to St. Petersburg - the city of enormous business opportunities and development potential. It is the second largest economic, transport, academic, cultural, and tourism center in Russia as well as a growing economy with a thriving private sector and an attractive business environment. Whether you want to start your business or invest in Russia, St. Petersburg is the best place to do it. Favorable economic and geographical location in the European part of Russia, developed infrastructure, extensive scientific, research and educational potential, highly skilled workforce as well as broad market and competitive operating costs facilitate the development of efficient, safe and stable business. St. Petersburg is an attractive location for business and trade which has an established and effectively operating system aimed at supporting investment activity in the city. The Government of St. Petersburg takes every measure to make St. Petersburg a business-friendly environment by reducing administrative barriers and simplifying the procedures required for business and investment activities, including issuance of building permits and registration of property rights. During the recent years many international companies have already implemented investment projects in St. Petersburg, including such leading companies as Coca-Cola, Pepsi, Gillett, Wrigley, British American Tobacco, Bosch Siemens, General Motors, Hyundai and many others. All of them considered St. Petersburg an ideal location for their business needs, whether it is an R&D center, test market, production center or distribution hub. Foreign businesses can benefit from government investment incentives aimed at boosting the local economy. This publication was developed by Enterprise Europe Network (EEN) - St. Petersburg in collaboration of professional legal, human resources, certification, research and real estate firms with the aim of providing start-ups, potential exporters and investors with the relevant information on starting and running business in St. Petersburg. The EEN branch in St. Petersburg focuses on providing business support to Russian companies and provides free services to foreign companies to foster small business cooperation. In 2011 Enterprise Europe Network (EEN) - St. Petersburg processed about 200 foreign requests and provided information on about 1,000 potential partners from St. Petersburg. Exporters, investors and businesses are also encouraged to use a special online tool – portal “Doing business in St. Petersburg” (www.doingbusiness.ru) which contains extensive interactive information in English on advantages and key issues of pursuing business in St. Petersburg as well as a regularly updated database of cooperation profiles and export products from St. Petersburg. Deputy chairman

Committee for Economic Development, Industrial Policy and Trade Kirill Soloveychik Government of St. Petersburg

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1. The city

1.1. Geography

Coordinates: Latitude: 59° 57' North Longitude: 30° 19' East Area: 1,439 sq.km. Climate: Maritime, with warm damp summers and moderately cold long winters Average temperature: July: + 25 C January: - 2 C Time: MSK ( UTC+4) Dialing codes: International country code: + 7 (Russia) Area code: 812

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1.2. Public holidays and business hours

Official holidays:  January 1-5 - New Year holidays  January 7 – Russian Orthodox Christmas  February 23 - Armed Forces Day  March 8 - Women’s Day  May 1 - International Labor Day  May 9 - Victory Day  June 12 - Day of Russia  November 4 - National Unity Day Business hours:  Offices: Mondays through Fridays - 9.00-18.00 (9 a.m. till 6 p.m.), lunch break – 13.00-14.00 (1 p.m. till 2 p.m.)  Banks: Mondays through Fridays - 9.00-18.00 (9 a.m. till 6 p.m.)  Stores: Mondays through Saturdays - 10.00-19.00 (10 a.m. till 7 p.m.), most stores are also open on Sundays  Restaurants: Mondays through Sundays – 12.00-23.00 (12 p.m. till 11 p.m.), many restaurants and cafes are open 24 hours

1.3. Population

Population 4,868,500 people (2011): Labor force (2010): 2,660,500 people

Unemployment rate 0.6% (2010):

Population density 3,288.3 per sq. km. (2010): Gender ratio male: 44.8% (2011): female: 55.2% Population age Male and female (0-15) Male (16-59); Male composition: female (16-54) (60 and above); (2010): female (55 and above) 12.9% 61.6% 25.5% Median age Total: 41.3 years Male: 38.2 years (2010): Female: 43.9 years Birth rate 12.1 (per 1,000 people, 2010): Death rate 14.2 (per 1,000 people, 2010): Ethnic groups Russian (84.7%), Ukrainian (1.9%), Belarus (1.17%), unspecified (7.89%) (2002 Census): Official language: Russian

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1.4. Political system

City day: May 27. The city was founded on May 27, 1703 City name:  Conventional long form: Saint-Petersburg  Conventional short form: St. Petersburg  Local long form: Sankt-Peterburg | Санкт-Петербург  Local short form: С.-Петербург | Петербург  Former names: St. -Petersburg (1703-1914), Petrograd (1914- 1924), Leningrad (1924-1991), St.-Petersburg (1991 till present)

Administrative division: While the city is divided into 18 districts (rayons), each district is divided into municipal formations. At the moment there are 111 municipal formations (munitsipalnye obrazovaniya).

1. Admiralteysky District 10. 2. 11. Moskovsky District 3. Vyborgsky District 12. 4. Kalininsky District 13. 5. Kirovsky District 14. Petrodvortsovy District 6. Kolpinsky District 15. Primorsky District 7. Krasnogvardeysky District 16. Pavlovsky and Pushkinsky Districts 8. Krasnoselsky District 17. Frunzensky District 9. Kronshtadsky District 18. Central District

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