More used to giving seminars in Germany, France and the USA he has come to London because “There are several reasons why Russia is attractive for British investors. There is little benefit in investing in the U.S. market, since there the local capital is cheaper and more competitive. Most European countries are experiencing a recession, so the British are reluctant to invest in the EU either. Furthermore, they are cautious about investing in China and Southeast Asia, since the trends in the Asian economies are not favourable and prospects are unpredictable. South and Central America look too exotic for more conservative Europeans. This leaves only India, Eastern Europe and Russia, Russia being the country of choice because of the decrease in the price of assets due to the uncertain political situation as well as because of the relatively low inflation rate. With an excellent risk premium, after the new government has been formed and its political course defined, foreign investors, including British ones, will look at Russia with a lot more confidence. "
His seminar entitled "Investment activity in Russia: practical steps for foreign investors to achieve positive results” was attended by businessmen from around the UK, representing trading, manufacturing and IT companies, all of whom are looking to work in Russia.
Mr. Gagarin talked with the audience about the most effective ways starting a business in Russia for foreign investors and how to manage and minimize the legal, administrative, fiscal, financial and market risks. The expert briefed foreign businessmen on the specifics of reporting systems by Russian companies with foreign participation. The chairman of Gradient Alpha also reviewed the work of foreign investors in Special Economic Zones of Russia and gave many practical recommendations on the basis of his personal experience.
While he minced no words in detailing the risks that could befall unwary foreign investors he said that despite all these negative aspects he was able to hold out the prospects for sound returns on one to three years investment.
He praised Russia’s Special Economic Zones for offering real benefits to foreign manufacturers but said they offered no real benefits to Russian companies. He advised foreign investors to eschew the Russian stock market in favour of direct investments.
He advised businessmen concerned over intellectual property rights to register their patents abroad – the UK or USA and then apply for patents in Russia.
Asked if he could find Russian investors for projects a majority-owned by foreigners he pointed to the 30% local participation Gradiant Alpha had sourced for a $200 mn cement plant in Kolomno, but cautioned that while it was possible it was not simple.
In sort, while Russia offers good prospects for UK investors, proceed with caution and take professional advice.