Geographically, Russia is the largest country in the world with the area of about 17 million sq. km (6.5 million sq. mi.) - about 1.8 times the size of the United States – and with the population of about 145 million people. But with a population density of about 22 persons per square mile (9 per sq. km.), it is sparsely populated, and most of its residents live in urban areas. The largest cities are Moscow, the Russian Federation capital, with a population of 8.3 million, St. Petersburg (4.6 million), Novosibirsk (1.4 million), Nizhniy Novgorod (1.3 million), etc. At present, Moscow and St. Petersburg are political, economic, educational and cultural centers of Russia, which also serve as a principal magnet for foreign investments and business presence.

Today, along with China, Brazil and India, Russia is one of the most dynamic and rapidly growing markets in the world. It is now the world's top oil and gas producer and the second largest oil exporter after Saudi Arabia. Of course, the recent strength of Russia’s economy is a result of high prices for mineral resources and of international efforts to make use of oil supplies outside the Middle East. However, practically all sectors of the Russian economy including oil and gas, domestic trade, construction, manufacturing, finance and banking, telecommunications, and information technology have witnessed significant growth for the past few years (overall GDP growth by 6.4% in 2005, 7.2% in 2004) whilst only in 2005 foreign direct investments (FDI) have doubled reaching $26.1 bln ($12.5 bln in 2004). According to UNCTAD, last year Russia became the largest FDI recipient in South East Europe and the CIS. In the first half of 2006, FDI in Russia have gone up to $8,789 bln which is a 46.0% increase in comparison with the same period of 2005. Fitch rating agency forecast that Russian GDP may reach $1 trillion in 2007.

The raising of Russia’s credit rating to ВВВ+ (Fitch, July 25, 2006), to Ваа2 (Moody’s, May 25, 2006), to ВВВ (Standard & Poor's, June 2, 2006) has improved Russian business climate even more. The gold and currency deposits of Russia amounted to $262.9 bln (Bank of Russia, July 21, 2006) – third place in the world after China and Japan. Besides, the Russian Government has lifted all barriers in transfer of capital into and out of Russia starting from July 2006. This will contribute to bring more foreign and Russian-root investors to Russia. And still, although the vast majority of foreign investors are succeeding in terms of sales, profits and implementation of their business plans in Russia, the outside perception of Russia is considerably more negative than the reality. According to various researches, the majority of analysts cite unpredictability, bureaucracy and corruption as the main obstacles to doing business in Russia. However, most of the companies with a foreign capital are quite satisfied with the obtained results and plan to expand their operations in this country. Thus, all those negative factors are not something that could really prevent investors from using incredible potential and real opportunities of such a huge growing market as Russia, especially in such sectors as: 

• oil and gas (up-, mid- and downstream, equipment and services)
• petrochemical and chemical industries
• real estate
• construction (equipment and services)
• telecommunications (equipment and services, especially wireless)
• power (equipment and services)
• machinery (equipment and services)
• autos and spare parts
• computer hardware and software
• cosmetics and toiletries
• healthcare (medical equipment)
• pharmaceuticals.

Actually, many foreign businessmen active in Russia agree that the wealth of opportunities, incredible natural resources, impressive human capital and around 145 million potential consumers along with healthy profit margins are those factors that keep them in this country (although they still have to deal with red tape, corruption and unpredictability). For private foreign investors willing to do business in Russia there are great opportunities at regional and municipal levels that can be discerned through an objective marketing analysis. Russia remains to be a major, fast-moving and growing economy offering enormous opportunities and serious challenges in equal measure. While the economy is producing increasingly positive results, the country is still a complex place to do business probably requiring professional advice from experienced consultants.