Market Entry FAST TRACK
Are you interested in increasing your business in the Eurasian Economic Union, Ukraine, and Poland but not ready to make big investments? Then we can offer you an ideal solution to enter the market within a few days.
Market entry – fast and simple
SCHNEIDER GROUP supports you with entering a new market within just a few days and without the hassle of company registration via our office-in-office solution!
We hire your employees and take care of personnel management, including payroll. Fully furnished working desks, secretarial services, a business address, and conference rooms are all available. In addition, we issue invitations for business visas and support you with our import / DDP services.
You will receive a comprehensive package and, due to our expertise and high standards, will avoid many problems which appear when entering new markets.
SCHNEIDER GROUP – Your global, local partner
With our experienced professionals, SCHNEIDER GROUP can help with all facets of entering a new market. Our legal department can register your legal entity and, with our Interim Management service, can appoint one of our competent General Directors. These directors act as a general director for your company, under your authority. The general director can be changed to a permanent figure and business can continue as usual whenever necessary.
Since we have over a decade of experience in the local markets, we can solve any of the potential issues that may arise during your business operations in Armenia, Belarus, Kazakhstan, Poland, Russia, Ukraine, and Uzbekistan. Our clients receive the same unrivalled quality services across all locations. In order to increase the efficiency and profits of our clients, we are constantly developing and implementing modern technology and improving our processes and workflows.
Our Market Entry FAST TRACK service package contains:
- Search for suitable candidates
- Outstaffing: we hire your employees
- Fully furnished and ready-to-use working space
- Business address with a separate telephone number
- Secretarial services through a personally assigned coordinator
- Use of conference rooms in our professional conference center
- Invitation for business visas
- Import / DDP services
- Fast and simple market testing with minimal risk
- Turn-key solution for immediate market presence
- Accelerated start without the hassle of company registration
- Concentration on core business without administrative overhead
- Simple transition to a subsidiary at any time
- One invoice only for all monthly expenses
Feedback from satisfied clients: Outstaffing is the perfect solution for a fast and target-oriented market entry. Since I am the only employee, it was the best way for us, and we are now able to export without having to register a company. Michael Konon, Logistics Manager
Russia is the world’s largest country and has an immense diversity and quantity of natural resources. The total population is more than 142 million, approximately one fourth of whom live in one of 15 major cities, including Moscow, St. Petersburg, and Ekaterinburg. Russia’s major industries are machinery construction, chemicals, energy (oil and gas), and agriculture. The Russian economy’s main imports have, in recent times, been consumer goods, pharmaceutical products, cars, semi-finished products, meat, fruits and nuts, and optical and medical instruments. Russia’s economic strength comes from the export of goods, mostly from the primary sector (natural gas, oil, metals, wood, and chemicals). Meanwhile, a broad range of government incentive programs have been developed with the aim of attracting investors to Russia. While the northwestern part of Russia is the hub for the logistics and pharmaceutical industries, the central region around Moscow is famous for its automotive and mechanical engineering clusters.
With a market of more than 40 million consumers, Ukraine offers many business opportunities. It has an excellent geographical location, European cultural traditions, visa-free entry for citizens of many countries, and a clear plan for modernization to align with Western values. Some additional positive qualities of Ukraine as a good country for investment are the Association Agreement with the EU, a good education system, multiple reforms in all sectors, and simplified taxation for small businesses and private entrepreneurs. Property, labor, and services have become extremely price competitive as a result of the ongoing crisis, significantly reducing the costs of market entry. For agricultural businesses, Ukraine offers some of the best soil in the world and is well-known as the “bread basket” of Europe. Ukraine has also recently become Europe’s #1 IT outsourcing and software development powerhouse.
Belarus is located in the heart of Europe at the crossroads of trade routes from West to the East, covering a total of 207,600 sq. km. It borders Lithuania and Latvia to the north, Ukraine to the south, Russia to the east, and Poland to the west. Minsk, the capital, is located on the same latitude as cities like Hamburg and Dublin and is only two time zones ahead of London. The costs of living, education, and various cultural events are lower than in the majority of European countries. The advantageous economic and geographical location, developed transportation, logistics, and manufacturing system of the country, along with its membership in Eurasian Economic Union of Belarus, Russia, Armenia, Kazakhstan, and Kyrgyzstan (EEU), creates unique opportunities for companies willing to develop business relationships in the Eurasian region.
Belarus strives to create open and favourable conditions for business. It is currently working to further increase economic efficiency and develop beneficial relationships with strategic investors. It has already selected approaches for step-by-step privatization and has elaborated a number of market entry and localization related incentives. Priority sectors for investment and localzation are IT outsourcing and software development, green and renewable energy, transportation and logistics, machinery and equipment, agriculture and food production, and infrastructure. Today the country is the leader in legislation improvement, confirmed by the World Bank’s surveys.
Similar to neighboring Belarus, Poland’s economy is poised for an improved economic outlook, albeit for somewhat different reasons. Poland’s population of 38 million is evenly distributed throughout many midsized cities. The capitol and largest city is Warsaw, with almost 2 million inhabitants, followed by Krakow, Lodz, and Wroclaw, each with around 600,000 people. These cities have implemented policies that have attracted a large amount of foreign investment over the years, and continue to do so. In only the first four months of 2016, the Polish Agency for Information and Foreign Investment reported that foreign investment contributed to more than 4,200 new jobs with a total value of 139 million euros. The distribution of the Polish population throughout the country, as well as the possibility for regions to adapt their legislation to the needs of specific industries, have rendered the regions very attractive to foreign investment. The strength of the economy lies also in its great diversification as it does not rely upon any one export or industry. It produces a large array of services and products, from financial services to machinery, furniture, and food.
Kazakhstan is the world’s largest landlocked country and ranks 6th in the world in natural resources reserves. It is the largest and strongest performing economy in Central Asia. GDP grew by about 8% per year before suffering a strong slowdown after 2014.
The unique geographic location of Kazakhstan, at the crossroads of Europe and Asia, guarantees huge traffic through the country from the significant European and Asian markets. Since ancient times, the Silk Road running through Kazakhstan fostered the exchange of goods, products, culture, and knowledge between the continents.
Nowadays, echoing the past, Kazakhstan positions itself as a logistics hub between the producing markets in Asia and the primary consuming markets in Europe. As a result of a political strategy to provide equal rights and equal opportunities regardless of nationality, Kazakhstan has managed to provide political stability and create clear and transparent conditions for foreign investment. The improved political and economic climate is a big reason why Kazakhstan ranked 35th in the World Bank “Ease of Doing Business Report” in 2017 after being ranked 51st in 2016.
Armenia is a country rich in culture and centuries of history. The country borders Azerbaijan, Georgia, Iran, and Turkey, which makes it a great gateway not only to the Caucasuses and Russia, but also to the Middle East.
Currently, the country is experiencing significant GDP growth. In 2017 it outperformed expectations, rising 7.5% versus a relatively flat 2016. Armenia offers a range of opportunities for business development.
Armenia benefits from the EU’s Generalised Scheme of Preferences plus (GSP+) arrangement, with advantageous access to the EU market and reduced export taxes. Furthermore, the Comprehensive and Enhanced Partnership Agreement was signed between Armenia and the EU in 2018, which significantly extends and simplifies cooperation and trade with the EU.
Besides being a significant partner of the EU in the Caucasus region, the country is a solid member of the Eurasian Economic Union, which grants it duty-free trade with Kazakhstan, Russia, Belarus, and Kyrgyzstan.
In 2018, Armenia ranked 44th in the index of economic freedom issued by The Heritage Foundation, which is the best ranking among the other members of the EAEU. In the World Bank’s ‘’Ease of Doing Business’’ report, Armenia ranked 41st. A high degree of economic freedom makes Armenia a safe partner in the EAEU market.
SCHNEIDER GROUP has recently opened an office in Yerevan, Armenia. If you’re interested in doing business in Armenia, our professional experts with decades of experience in supporting companies’ expansion in the CIS are at your service.
Uzbekistan is an industrially oriented state, with various kinds industry accounting for more than 50% of GDP. The largest industries are agriculture, construction, freight and passenger transportation, and trade and services.
The country is rich in mineral resources with large deposits of oil and natural gas, uranium, gold, coal, silver, tungsten, and many other minerals. Because of this, Uzbekistan has a well-developed mining and oil refining industry, non-ferrous and ferrous metallurgy, and gold mining and processing industries.
In recent years, a number of government policies have been enacted to promote small business development, as it plays a key role in the development of the economy as a whole. Rapid economic growth, a great amount of resources, and human potential invariably attract foreign business to Uzbekistan. The volume of investments is growing every year, not only due to the dynamically developing economy but also to the favorable investment climate created by the state for foreign business. The main export items are cotton and cotton products, gold, uranium ore, fertilizers, metals, textile and food products, and cars. Uzbekistan’s largest foreign trade partners are Russia, China, and Kazakhstan, with Russia accounting for almost 30% of the total foreign trade turnover.
Exporting directly to the final client
If a company has an existing client base within Russia and the CIS, they may choose to export directly to these clients, which can be beneficial compared with exporting via distributor.
While this business model avoids registering a legal entity, business cannot always be developed to its full potential via this method. Pure export of goods to Russian clients can restrict business due to the import obligations of the final client: according to local laws, only a local LLC can import goods into Russia/the CIS. This gives the final client the obligation to take care of the import themselves, and all of the responsibilities that come with it, such as registering with the customs authorities and acting as importer of record.
Not only does this discourage potential clients from buying the goods, but also excludes clients looking to purchase small quantities, as the price of the import process renders the deal economically unviable.
In Russia, for example, not all companies are willing to take on this formal import responsibility, and the only alternative for the client would be to use the services of a broker or agent. All of these options frequently involve communication and documentation difficulties.
An alternative is to find a provider of DDP import services: a company willing and able to purchase the goods from the foreign exporter, taking on all import responsibilities, coordinating the entire process and selling the goods on to the final customer.
Exporting via a Distributor
One of the possibilities of doing business without a local entity is by operating via a distributor. There are certain advantages of cooperating with a distributor in Russia and the CIS, including providing a single contact point rather than communicating with each customer individually, providing a warehouse, inventory management, customs clearance, logistical support, and instant access to a wide range of customers.
However, working with a local distributor has several restrictions and disadvantages, including the following:
- Without a direct presence on the local market, the foreign company and their sales figures are highly dependent on the distributor.
- It can be difficult to control the pricing or marketing activities of the distributor.
- The distributor may be involved in grey import schemes (causing tax risks and the possible blacklisting of the foreign exporter’s product).
- The foreign company has no direct contact with final the customer.
- The foreign company may experience difficulties terminating contracts.
- Risk of false invoices and other irregularities
- Bad marketing policies of the distributor:
- Low or no promotion
- Distributors who are not motivated or dedicated.
- Competing products in the distributor’s portfolio.
To avoid these problems, the main alternative is to register a company and take on the import responsibilities, but this also is not as easy as it sounds.
Barriers to registering a company
Many companies think of establishing an LLC, representative, or branch office right away, however the obligations and burdens which come with this decision with are often underestimated.
From a financial perspective, a company must consider the registration fees and costs of setting up a legal entity, the funds and work required to keep the business running, and adherence to local accounting standards and their onerous documentation.
The time to register a company with the state authorities can, on paper, be quite quick in post CIS countries. However, in reality, it takes a lot of time and effort to gather all necessary documents for the registration application, opening a bank account, recruiting and employing the general director or head of a representative office, organizing a legal address, and obtaining work visas (if employing foreign workers). The amount of resources required can be difficult to predict accurately.
Companies must go through this entire setup process in order to get just one marketing or sales manager on the ground and test the market – a significant investment for an uncertain outcome.
Market Entry FAST TRACK – The Concept
SCHNEIDER GROUP has come up with a solution that enables foreign companies to try out or expand within the markets in which we operate, benefiting from a fully established local presence and full import capabilities, but without the need to register a legal entity or make any large investments.
It is a quick, effective, and low risk solution that can be implemented within a few weeks. The central point to this concept is the overlooked and often unknown option of outstaffing.
We call it the Market Entry FAST TRACK service.
Market Entry FAST TRACK combines outstaffing and a number of key supporting services to put someone in any of our offices to work for the client company full-time. It is the ideal solution for companies that:
- Are new to the market and wish to ‘test the waters’ without committing to large investments.
- Have existing clients in Russia/the CIS but wish to expand their customer base locally without making significant investments.
- Work locally via distributors, but wish to either increase sales by implementing business development and marketing campaigns, or who wish to bypass the distributor altogether.
- Are planning to register a company but wish to initiate the sales and marketing processes during company registration.
- Already have an office and wish to hire more employees, but have strict corporate headcounts.
- Are exiting the market or liquidating their company, but have key clients locally they wish to keep working with.
The key elements to this service package are:
- Business Address
- Coordinator/Secretarial Services
- Business Visa support
- Use of conference rooms
- DDP Import Services
All aspects of the service are billed in a single monthly invoice for convenience.
As your outsourcing company, SCHNEIDER GROUP will hire your personnel and can help to find candidates who best meet your requirements. SCHNEIDER GROUP concludes a labor agreement with the employee, but they effectively work for your company.
As part of our Outstaffing service:
- We pay the employee’s salary, social and payroll taxes, and take care of all administrative, HR, and insurance matters.
- We carry out all statutory reporting to the authorities.
- For additional activities or expenses, (e.g. business trips), we do the administrative work, salary calculations, and pay-out via our company.
- We take formal responsibility of your outsourced personnel according to Russian labour law, while you focus on your staff’s performance and tasks.
Fully equipped workplace
SCHNEIDER GROUP’s fully equipped workplace service provides your employee with a modern, comfortable workplace, and all the equipment that will be needed. In line with our slogan “simple structures, simply success”, your dedicated contact will take care of all your needs regarding your office space. This is an efficient alternative to traditional office spaces, and we will provide you with all your employees will need to start working immediately, including:
- Office fully equipped with furniture, telephones, and cupboards.
- Your own external phone numbers, including unlimited local and international calls.
- An additional internal phone number.
- An internet connection with unlimited traffic.
- Usage of color and black and white printer, A4/A3-Xerox and scanner, including consumables.
- Cleaning service and general office management.
- Toilet and small kitchen on the same floor as well as the whole common office area.
- Access control at security, located at the entrance of the building.
As part of the package, you will also benefit from the use of our business address. This gives you a professional point of contact and an excellent central location.
Our business address package includes:
- Your company’s name plate in the entrance area of our office
- Mailbox/address: we inform you immediately about your incoming correspondence
- Information hub: install your information desk and banners and we will provide information about your business to potential clients and partners and welcome your visitors into our office.
Coordinator / secretarial services
You will also benefit from our Secretarial Service. We will provide you with one point of contact who will be your personal assistant, supporting you on all issues you may face. With our multilingual employees, you can be sure that you’re supported by a team of experienced professionals.
Typical tasks that would be taken over by our personal assistant include:
- Administrative support, such as: office-management, fixing or scheduling appointments, typing and printing documents, making phone calls, and planning business trips
- Translations, including presence at meetings or exhibitions
One business visa per quarter
If you plan to visit during the course of the project, we can organize all the documents that must be prepared for the application for a business visa, including the necessary business visa invitation.
Conference room’s usage
When meeting with potential clients and business partners, you and your employees will benefit from the use of our conference rooms.
This includes all the required equipment: a Wi-Fi connection, projectors, and speaker phones, as well as tea, coffee, and water.
DDP (Delivered Duty Paid) Import Services
This service allows our clients to get their goods into the Eurasian Economic Union without using a distributor or broker, or registering a company.
Essentially, SCHNEIDER GROUP provides the services of a general importer, purchasing and importing goods on behalf of our clients via a purchase agreement, and then re-selling them to the final customer within the Eurasian Customs Union.
It provides for a transparent import process, allowing you to stay in complete control of all costs and the final price at which the goods are sold to your final client.
Our service includes:
- purchase and import of goods in our name
- complete handling of logistics including warehousing, conformity documents, certificates, etc.
- drafting contracts, payments, and other necessary documents
Our Import Service guarantees 100% transparent and legal import of goods to member countries of the Eurasian Economic Union.
Successful case studies
As well as the more obvious use for our Market Entry FAST TRACK service, i.e. testing out a market without registering a company, there are some more unusually uses too. Below we also look at two such cases; when corporate headcounts are an issue, and when companies decide to leave the market but wish to maintain a certain level of business activities. Following are three real examples from our Moscow office.
Getting Past Headcount Restrictions
An American company specialising in the production of printers, when entering the Russian market in 2010, was given a defined headcount limit from Headquarters. They were therefore unable to hire many specialists that were essential for business, but were not allowed by the HQ. The solution – outstaffing.
The company had cooperated with SCHNEIDER GROUP previously: we had provided them with our legal address service during the company registration, our interim management and accounting outsourcing services, and rented office space on their behalf. We took on their first outstaffer in 2013 by concluding a labour contract directly with us. The employee was provided with everything he needed, and the solution proved so effective that by 2014 we already had five more of their employees as outstaffers in our Moscow office.
Outstaffing solved another issue for the American company. Concluding a labour contract directly with the Russian subsidiary proved to be a very slow process for the highly qualified specialists. The prospective employees didn’t want to wait for this tedious process to be completed, and for the company it was important to get people on the ground and working as quickly as possible to start on a new project. By concluding a labour agreement with us and starting work under our roof as outstaffers, the company and their specialists found a quick and effective solution.
As it turned out, two of the six outstaffers were not suitable long-term, and upon expiration their contracts were not renewed. This demonstrates outstaffing’s effective use as a probation period and for assessing employees’ suitability for the role. Of the four remaining outstaffers, two have been transfered directly to the Russian subsidiary and two still remain in our office.
Exiting the Market
There are many reasons to enter a local market, and also many reasons to exit. Acknowledging that a foreign market is not economically viable for maintaining a legal entity does not mean that the entire business automatically dries up. There needs to be something between a full legal entity and a zero presence.
In this case, companies can choose to employ several people to continue providing services to current clients, purusing attractive sales leads, and promoting and marketing new products which will eventually be sold by HQ.
An American IT firm that provided solutions with mobile applications closely linked to ERP systems decided that it was not economically viable to keep and maintain a full legal entity and decided to close it down. Considering the nature of their business, however, it was necessary to continue to provide maintenance and troubleshooting services to the clients in the local market.
As such, they decided to employ IT system analysts to keep the critical support structure in place, but to remove everything else from the legal entity. It was a streamlined and convenient solution.
This also highlights another benefit of outstaffing: it does not necessarily have to be a short-term solution. In this particular case, it is completely open-ended how long the company will keep these employees in place. The idea is for outstaffing to be flexible – which is how the concept has been designed.
The next stage
For our clients, the Market Entry FAST TRACK service has proved to be a successful way of starting their business in Russia and the CIS. The obvious next step, in order to increase business and establish a more comprehensive local presence, is the registration of a legal entity. This process can prove to be difficult, not only due to the bureaucracy, but also the uncertain timescale that makes planning critical.
The choice and structure of the legal entity is an important not only from a business operations standpoint but also from a tax perspective. Investors must think carefully about the optimal level of charter capital and the double taxation treaties that exist between the target and home country of the founders. SCHNEIDER GROUP’s tax, legal, and business set up services help companies to quickly and transparently set up a local legal entity. After starting the local legal entity is formed, SCHNEIDER GROUP offers a range of support services, from accounting and transfer pricing compliance to a full interim director service.
If when testing the market using outstaffing, te company realizes the opportunities are limited or identifies problems that deter them from entering the market, the exit costs are a fraction of what they would have been be had the company been fully established. The outstaffer can be transferred to the HQ, if necessary. The idea is for outstaffing to be flexible – which is how the concept has been designed.
Your questions – Our answers.
1. Do I have to set up a legal entity to sell my products in Russia, Kazakhstan, Belarus, or Ukraine?
One common approach used by foreign companies new to these markets, is finding a local distributor(s) to import and sell the goods on their behalf. This can be a quick an effective way of entering a new market, and proves effective for many foreign companies. It can, however, have drawbacks. For example, it is not always possible to have direct contact with your final clients, have control over the pricing structures of the distributor who may also have your competitors products in their portfolio, and, unfortunately, grey import schemes are still widespread which can lead to tax risks for the foreign exporter (as well as the potential blacklisting of their products).
The second option, which can be used alongside the first to try to minimize some of the potential negatives, would be to take an ‘Outstaffing’ approach. This entails finding a local company to employ staff on behalf of the foreign company, taking on all legal responsibilities (concluding labour contracts with the employees, paying their salary, social contributions, etc.) while the staff perform tasks as directed by the foreign entity. Finding a local partner to provide DDP import services (i.e. buying the product from the foreign entity, taking care of import, certification, customs matters, and selling the goods to the final client) can eliminate the need to use a distributor at all, if desired. In this way, companies can have employees on the ground in these markets with full import and sales of goods without the need to register a company. SCHNEIDER GROUP offers an entire service package for precisely this model, which we call our ‘Market Entry FAST TRACK service’.
Finally, foreign producers can also register a company in these markets and take care of all the above via their own legal entity. This can either be a next step after successfully operating via one or both of the above models, or can be implemented from the start. It is worth noting that registering a company, especially in the machinery industry, can bring with it several advantages. The final clients like to see that a foreign company has fully committed to the market and having a local office also gives a good, professional image. Finally, companies wishing to participate in state tenders in Russia may be prohibited from doing so unless they have their local company registered, due to recent changes in legislation regarding state procurement.
If you would like to know more about any of the above, or just wish to talk to one of our experts about our markets, please don’t hesitate to get in touch.
2. How can I find potential customers or partners in Russia, Ukraine, Belarus, or Kazakhstan?
For a company considering entering the Russian, Kazakh, Belarusian, Ukrainian, or Polish markets, we consider conducting a market analysis to be a good starting point. This gives our client the chance to evaluate all possible risks and opportunities for their company in the target market. We can provide information regarding their industry as a whole, their competitors, and the peculiarities of the country where they are planning their business.
The market analysis also includes a search for potential customers, distributors, or other business partners. We give a general overview of the potential partners with all key information, including contacts, and then can get in touch with them to assess their interest in forming a partnership or purchasing specific goods and services. If required, we can also perform a background check on such partners to assess any risks.
The whole process involves close contact with the client and a deep understanding of their business needs and products/services, which is combined with our extensive local knowledge to maximize the chances of success and minimize potential risks.
3. How difficult is import into the Eurasian Union and Ukraine?
Importing into Eurasian Union can cause some headaches due to the bureaucracy involved with the import procedure. As the customs tariff numbers in the EEU differ from the ones in Europe or the U.S. (10 digits instead of 6 or 8), the respective customs tariff numbers have to be determined for understanding how much has to be paid at customs and what conformity documents are required for the product. The certification procedure is also complex, as technical descriptions have to be prepared and submitted to the certification agencies. Certification can take from 2 weeks to several months. This is why having a reliable and experienced partner is highly recommended to ensure full and timely preparation.
SCHNEIDER GROUP supports international companies with the full import process. We specialize in complete handling of the logistics chain, product certification, and the preparation of export documents. Additionally, we provide registration with the customs office, electronic customs clearance, and the delivery of the goods to the final destination:
For foreign companies:
- Customs clearance
- Logistics coordination and warehousing
- Product certification
- DDP Import
For their Russian subsidiaries:
- Customs clearance for third parties via electronic signature or broker service
- Registration at customs
- Registration of the electronic signature
- Logistics coordination
- Development of supply chain and warehousing concepts
- Delivery of goods to the final client in Russia
- Preparation of the statistics form for deliveries within the EEU (Eurasian Economic Union)
4. How can I make sure that my pricing policy is applied by my distributors?
Many international companies initially work through distributors or a distributor network to tap into the Eurasian market. This has the advantage that the distributor completely takes care of the customs clearance and logistics and sells the goods on the Russian market. This allows foreign companies the opportunity to participate in this huge market with minimal effort.
However, there are potential drawbacks. The customer contact is almost exclusively though the distributors and they determine the selling price. In most cases, attempts are made to seek short-term profits instead of long-term market penetration. In the mid- to long-term, this can lead to market potential not being fully exploited for the products.
However, there are alternatives to the foreign distributors. We will gladly take the time to show you these possibilities. Please contact us at email@example.com
5. What possibilities are there for minimizing risks when entering the Russian, Belarusian, Kazakh, or Ukrainian markets?
Entering a new market always comes with certain risks, but there are several ways of minimizing them. Having your own local presence in Russia is an ideal solution to fully exploit the local opportunities. However, registering a company immediately involves a lot of bureaucratic and financial hurdles, and is often premature and the alternatives should be considered.
Entering the Russian, Belarussian, Kazakh, or Ukrainian markets without registering a company can significantly reduce potential risks, and is generally done in one of two ways:
1. Find a good distributor, who promotes and sells your products and services on the local market. In order to help with finding a distributor we can conduct a tailor-made market analysis, search for partners based on the results of the market analysis, and then contact and facilitate meetings and negotiations with the potential partners, distributors, or clients.
2. Have your own employees on ground via an outstaffing service provider. This gives you more control and influence over your business in the foreign market. Since we are a fully accredited outstaffing provider, we provide this as part of our Market Entry FAST TRACK service. We employ the candidates with a labour contract at our offices, pay their salary and all associated taxes, and provide them with the required infrastructure (fully equipped workplace, conference rooms, and more) while you have the full control over their day-to-day tasks.
It is possible to implement both options at the same time, with the distributor continuing to sell your product or service, and the employees on the ground boosting marketing and sales activities and strengthening your local presence.
Both options enable you to enter the local market with relatively minimal risk, and act as a great way to test them out without committing to substantial investments. If the market does not prove to be as fruitful as hoped, these approaches allow for a swift and efficient market exit. More often, they act as a stepping stone to registering a full legal entity in the market if business goes well.
Russia Briefing – Market Entry FAST TRACK
When expanding into any new market, companies are generally confronted with barriers to entry. For a foreign company entering a CIS country, the barriers to registering a legal entity, representative office, or branch office, can be significant. Even the simplest of tasks come with headaches.
A foreign company will need three to five months to establish a legal entity or representative office in Russia, and must prepare, translate, and notarise a mountain of documents in order to complete the process. Furthermore, a lot of time and effort is required to open a bank account, recruit and employ the general director or head of representative office, organize a legal address, and obtain work visas.
This large investment of time and resources often deters foreign investors from entering the market and making the most of the many investment opportunities. This is especially relevant today, considering the economic uncertainty surrounding the Russian and CIS markets.
In response, SCHNEIDER GROUP has come up with a solution that enables foreign companies to try out the local markets in which we operate, without the need to register a legal entity or make any large investments. The central point to this concept is the overlooked (and often unknown) option of outstaffing. We call it our Market Entry FAST-TRACK service.
Click on the image to download the Russia Briefing.
Discover a new market at minimal risk
Entering a new market can be a daunting task for any company going into unfamiliar territory. It may not always be clear which the best approach is, and companies must choose between registering an LLC, a representative or branch office, working via distributors, or other possible methods of market entry and market expansion.
The Market Entry FAST TRACK developed by SCHNEIDER GROUP for Russia, Ukraine, Belarus, Kazakhstan, and Poland is ‘hidden gem’ as an option for companies entering or expanding within our countries. Download the brochure to learn more.