– Mr Thompson, how did you come to be appointed Director of the Russo-British Chamber of Commerce?
– Before I was offered the opportunity of proving myself in this post, I was head of the marketing department of a certain British company. It could be said that I started from nothing. But I have always aimed to find the best use for my capabilities. I have been in Russia for 14 years. I had achieved all I wanted to in that company and had hit the glass ceiling, as they say. I wanted to try my hand at something new. The more so since I had formed a regular circle of business partners and had many contacts with business people. And not least thanks to my charitable work in the Scottish St. Andrew’s Society. I wanted to make broader use of this network of acquaintances in my day-to-day work.
About Alan Thompson
He came to Russia in 1999. He worked in a wide variety of fields – agriculture, insurance and advertising. He was involved with delivering disinfectants and hygiene products to hotels in Russia and Eastern Europe. He held the posts of Deputy Director in Yellow Pages and Marketing Director in a major international company. He took up the post of Director of the Russo-British Chamber of Commerce (RBCC) in April 2012. He heads the RBCC offices in Moscow and St. Petersburg, but he usually works in Moscow.
– Were you not put off by the fact that everything is so complicated in Russia?
– Not in the least. When I first came here in 1999, I immediately wanted to know how business is done here. Unlike those in some foreign companies, I realised that you should not dictate your terms, but seek mutually beneficial projects. Business models must always take account of the local specifics, including the previous experience of 70 years of communism. Yes indeed, let no-one be in any doubt about that! Only then will the business model be effective.
You should not blindly import Western business models to Russian soil – adaptation is essential.
Like many foreigners coming to Russia for the first time, I started by teaching English in Moscow. Then I went to a consultancy firm, where I dealt with finances and auditing. I was the only foreigner there and that helped me greatly in acquiring that unique experience of conducting business in Russia which is so lacking in many foreign companies entering this market. You should not blindly import Western business models to Russian soil – adaptation is essential.
– As I understand it, this is just what you teach foreign businessmen within the framework of the Russo-British Chamber of Commerce, is it not?
About the Russo-British Chamber of Commerce
The RBCC is a non-commercial organisation, founded in 1916. Since then, the Chamber has been working to strengthen business relations between Russia and Great Britain, helping companies in both countries to find partners, and representing their interests at an international level. The RBCC is independent of the governments of the two countries, and exists on its income from members’ subscriptions, sponsor support for events, and advertising. Thanks to its experienced staff and wide range of contacts in commercial organisations, and its connections in national, federal and regional administrations, diplomatic circles and business associations, the RBCC helps its partners to open up new opportunities for their businesses, and also to develop and support their existing operations in Russia and Great Britain.The RBCC has three offices – in London, Moscow and St. Petersburg. Its members include major trans-national corporations, and small and medium businesses working in a wide variety of sectors of the economy. The RBCC is managed by a Board of Directors, which includes high-ranking business people with many years’ experience of work in Russia and Great Britain. The Board is helped in its work by the Consultation Council, which also consists of leading figures in business from both countries.
– To some extent, yes. But in my view, the RBCC should act more like a marketing agency, because it exists due to its members’ subscriptions. Consequently, to attract new members, we have to offer them something of value, something they just can’t get anywhere else. The thing of value that the RBCC can offer is the opportunity to make business contacts, and to hold dialogues with the necessary people, including with state officials. All this is important for foreign business people. Therefore, the number of companies belonging to the Chamber is increasing all the time. At the time I came to the RBCC, there were about 200 members representing Russia, and now this number has almost doubled. Britain is represented by about 250 companies.
– What projects have you succeeded in implementing during your time in Russia, and particularly here in Moscow?
– The RBCC’s aim is actively to support British and Russian companies in solving questions of commerce and investment. Therefore, our projects comprise a continuous calendar of events. The biggest of these is the investment forum RussiaTalk, which is traditionally held in Moscow in the autumn. The last forum, last October, was attended by His Highness Prince Michael of Kent, who is the Chamber’s patron. At such events, a very wide range of questions can be discussed and well qualified answers obtained. This is also a real opportunity for both the Russian and the British authorities to make themselves known and to announce their intentions. Incidentally, a similar business forum was held in London in June. We invited the governors of Kaluga and Penza oblasts to it. They told us about the investment potential of their regions, what opportunities for British companies are opening up here, and what needs to be done to enter the Russian market.
Our projects comprise a continuous calendar of events. The biggest of these is the investment forum which is traditionally held in Moscow in the autumn.
– What was of greatest interest to potential British investors?
– The British public here can be divided into two categories. One is concerned with more advanced matters, because these people have been working in Russia for a long time, from five to 10 years or more. Such matters include taxation, the expansion of their activities, and various aspects of Russian law. The other half is interested in elementary information: how to register a company, how to select staff, where to obtain various certificates, how wide the sales market is – such things could be called “instructions for use”. But this is understandable, because business people are interested in potential profit. All the answers were given at the forums, including the prospects for the development of production sites within the free economic zones. Russian Federation Chamber of Commerce and Industry representatives explained how a company could open its own office here, and solve various organisational and legal questions.
– Do you find that the somewhat cooler relations between Moscow and London have affected the RBCC’s activities?
– The pendulum has now swung back, and relations between our countries have improved recently. This stimulates the interest of business people. The disagreements at the political level which were in evidence two or three years ago led to some British companies in Russia keeping their heads down. As a minimum, they did not want to advertise their British roots. Now the situation has changed. As soon as the tendency towards warmer relations became evident, business became more active. Entrepreneurs are taking every opportunity to communicate. Even at the international sambo competitions in London at the beginning of June, which were sponsored by Russian and British businesses, this sort of informal contact took place. This is always the way: after a certain period of stagnation in relations, the mutual attraction becomes stronger.
The British display particular interest in matters of developing business in the Moscow region.
– The British display particular interest in matters of developing business in the Moscow region. Moscow is not only the capital, it is also a major financial and commercial centre. Everyone wants to become established here first. Although until recently, certain British business people had a prejudiced attitude. In such people’s opinion, everyone knew how Moscow officials behaved, it was wrong to harbour any illusions about it. But it seems to me that changes are in evidence here too. The Moscow administration wants to attract foreign investors into transparent projects. The emphasis here is on medium and small consumer-orientated businesses. Here is just one example. The representatives of a small British firm producing exclusive silk ties recently approached us. They had come to Moscow to learn about the market situation. And although far fewer men wear ties here than in London, there is a demand. Not for nothing are the Italians already active in this sector of the Moscow market. But the Britons think their product is of much better quality and competitive in price. Furthermore, their products are hand-made, not just computer graphics in silk. A real gentleman will be able to tell the difference.
– How many British companies altogether are now operating in Moscow?
– I have heard the figure 600 somewhere. But it is very arbitrary. Everyone has his own statistic. What is a British company in Russia? Is it a company registered in Great Britain and engaging in trade or investment here? But there is a trend for Russians to register a company with us and to conduct their activities on Russian territory. What do you call it in such a case? Also, more and more Britons are coming to Moscow to work in Russian companies.
– When will there be as many British businessmen in Moscow as there are Russian ones in London today?
– If you put together all the Russian businessmen who came to England in the nineties, and Britons conducting business in Russia, maybe the figures are comparable. Although they do say that there are about 250,000 Russians in London alone now. And those who keep count of these matters include those from the whole of the former USSR as Russians.In any case, the number of British entrepreneurs in Moscow and in Russia as a whole is increasing. The RBCC finances its activities by giving some value in return for membership subscriptions. Obviously it is easier to do this for small and medium businesses than for big ones. However, this does not mean that there are no big companies in the RBCC. Big business simply could not exist properly without a certain number of small and medium businesses. The growing number of small and medium enterprises is proof that the market is taking on a more and more healthy shape, that all the conditions for the normal conduct of business are being created.
We try to ensure that the vast majority of the members of our Chamber are small and medium businesses.
– Moscow is constantly proclaiming that it is open for foreign investors. Do you feel that this is true in practice?
– You would do better to ask the entrepreneurs about that. But I think they would answer positively. For example, all foreigners start their acquaintance with Russia at the Federal Migration Service (FMS). This was a total mystery to me in 1999. I didn’t understand anything! When I lost my visa insert, it took six months to replace it. You could write a book about that story. In 2010 my brother came to me as a guest on a few days leave. And it just happened to be when the Eyjafjallajökull volcano disrupted air traffic in Europe! He only had a visa for three or four days, but he couldn’t fly back. All he could do was apply to the FMS, of which I had so many negative recollections. But to our surprise, they sorted everything out in no time. It’s a different Russia now! Many things are much easier to solve now, without bureaucratic delays. This also applies to the Federal Registration Chamber and many other state authorities. They are much more predictable and considerate now.
– But all the same, what problems do British entrepreneurs encounter in Moscow?
– There are problems everywhere, not only in Moscow. For example, if I stay in Russia for more than 183 days in any one year, then in theory, I automatically become a tax resident. But how do you explain this? There are a vast number of interpretations of the concepts “resident” and “non-resident”. For Russian banks, when transferring assets, it turns out that I am a non-resident of the Russian Federation, although I settled here long ago and have been working here a long time. I don’t yet have a permanent residence permit. I have only now begun to deal with this question, which is also not the simplest of processes. However, a British entrepreneur who has worked in Moscow for a long time recently told me that he found it much easier to start a company here than in England.
– The British have a reputation for being conservative. Does this help or hinder for business in Moscow?
– Britons do of course have a tendency to keep to the rules in all they do. But sometimes, when observing the rules, they want to prove themselves right at any price, this hinders the process. There is a well-known Russian saying about this: moderation in everything. This includes observing the rules. Conservatism too should be moderate and rational. By keeping to this rule, conservatism becomes an advantage, regardless of the scale of the business. For example, the chemical cleaning and laundry company Contrast cleaners has more than once been named as one of the best consumer services enterprises in Moscow. It now has many branches here. And it all began with one Briton coming here and opening a business. This chemical cleaning company has been so well assimilated by Muscovites that they have no idea that it is of foreign origin or who owns the business. My fellow countryman simply persistently and consistently got on with the job of bringing his company to an exemplary condition. His conservatism about quality of service and his approach to his staff and clients brought results. And although the prices in this chemical cleaners may not be the cheapest, people are prepared to pay “a surcharge for conservatism”. By the way, I prefer to have my silk ties cleaned there rather than anywhere else.
– What other fields are attractive for investments in Moscow?
– It’s not just consumer services. Moscow is becoming an important financial centre. This takes the form of insurance, banking and consultancy businesses. However, the Russian capital still has to create a number of important institutions. Because London has tremendous experience in this respect, a broad field for cooperation is opening up here, both within the framework of the Russo-British Chamber of Commerce and in other directions.
Moscow is becoming an important financial centre. This takes the form of insurance, banking and consultancy businesses.
Apart from this, the British could give Moscow a vast amount of help in developing its parks. This is just what Sergei Sobyanin’s team is actively engaged in right now. British firms have already participated in landscaping work at Gorky Park, the best park in Moscow. A great many of our business people are ready to facilitate the development of health services in the Russian capital. And that’s not all by a long way.
– You are a member of the Moscow Whisky Tasting Club. Have you taught your Russian partners the right way to use this drink?.
– It’s more a matter of them teaching me than me teaching them! Our club provides an opportunity to spend a pleasant evening in conversation and dining. And to taste Scotch at the same time. And it’s as good in Moscow as in Scotland.