The Moscow Times

The Crisis: Electricity Providers Face Bankruptcy
Electricity suppliers across the country are cracking down as the number of delinquent private and corporate customers surges, as the dilapidated industry is mired in debt linked to unpaid consumer bills and the multibillion-dollar investment programs that investors signed onto during the privatization of Unified Energy System, which wrapped up just weeks before the financial crisis struck.

The Moscow Times » Business For Business

Issue 4034 | 19 Nov 2008

"I Have a Bad Feeling About This" - How to Discern that You Are Staring Redundancy in the Face
By Material courtesy of www.rb.ru / Special to The Moscow Times It is still unknown whether staff reduction is becoming inevitable, which sectors it will touch and which it will pass over. Such uncertainty does not contribute to calm and confidence in the future, but the coming dismissals come with certain signs.

Issue 4029 | 12 Nov 2008

Tough Lessons for Generation Y
By Tremayne Elson, Managing Director of Antal International Russia Recruitment Company / In Russia, most progressive companies are populated with younger people and the reaction of Generation Y employees to the current economic environment has been fascinating.

Issue 4025 | 6 Nov 2008

The World Bank RFP for Building Strategic Management Capacity in Kazan City
The International Bank for Reconstruction and Development (the World Bank) invites proposals for firms interested in building Strategic Management Capacity of the Higher Education System in Kazan City.

Issue 4024 | 5 Nov 2008

Woman at Work in Russia: Is It a Man's World?
By Olga Popova, Anna-Stefaniya Chepik / While some employers may prefer male workers, the shortage of highly-skilled employees of either gender is keenly felt on the Russian labor market.

Issue 4020 | 29 Oct 2008

Candidate Requirements
By Liubov Bolbina, Consultant, Vizavi Consult / The first step in formulating a vacancy by a company is defining strict requirements towards the future employee.

Cool Heads and Creativity Key Attributes of Downturn Leaders
By Moscow, Mirka Straathof, Managing Consultant, Hay Group, Russia / If you're in an alligator-infested swamp, you need people who can see the high ground and get you to it, fast. Team behavior is crucial when times are hard. How do you set your leaders up to be heroes in tough times, yet team players too?

Issue 4015 | 22 Oct 2008

Personal Data Under Russian Employment Law: Some Aspects
By Pepeliaev, Goltsblat Partners, Ilya Makartsev Attorney / Employee personal data is a very recent concept to appear in Russian labor law. It was initially introduced in 2001 to the Labor Code of the Russian Federation.

Issue 4011 | 16 Oct 2008

Non-Compete Clause in Russia: Do the Laws Compete?
By Pepeliaev, Goltsblat Partners, Yury Ivanov, Junior Attorney / A non-compete clause or covenant not to compete is a term used in contract law meaning that one party (usually an employee) agrees not to pursue a similar profession or trade in competition with another party (usually the employer).

Employment of a General Director: What a Company Needs to Know
By Salans, Associate, Maria Landau, Alexandra Bludyan / Employing a general director (president, general manager etc.) as a company's sole executive body is a complicated matter of particular concern to today's corporate owners and the authorized officials charged with the due maintenance of personnel documentation (i.e. HR specialists, accountants).

Fare Thee Well, but Not Forever... Layoffs in the Time of Troubles
By Partner, Evgeny Reyzman, Baker McKenzie / The times of trouble has come to Russia. Businesses, mostly in the investment and banking sectors, will have to resort to material staff layoffs in the near future. This article is an attempt to suggest some basic strategic recommendations to employers, rather than to reiterate again the description of legal technicalities.

Issue 4006 | 9 Oct 2008

New Ways of Interacting With Students
By Alexandra Evstigneeva / Special to The Moscow Times It’s not a secret that the labor market is slightly overheated at the moment and the demand for personnel, especially in such big cities as Moscow, St. Petersburg, Yekaterinburg and Novosibirsk, exceeds the number of people available for employment.

Educating Future GMs
By Anna-Stefaniya Chepik / Special to The Moscow Times In the supercharged environment of the red-hot Russian labor market, the
battle for talent is gaining in intensity by the day. In addition to the shortage of qualified managers, Russian legislation makes the life of HR managers even more complicated by prohibiting any noncompetition agreements with employees.
In this situation, employee training becomes a vital instrument for fostering future top managers for the company and for retaining staff.

Issue 3999 | 30 Sep 2008

English Law in Russian M&A - What to Expect
By Elizabeth Walters / Partner, DLA Piper UK LLP For the foreseeable future the common practice of using English law to govern Russian M&A transactions is likely to continue. This is because English concepts have long been established and interpreted by the judicial system and give investors confidence as to the effectiveness, predictability and enforceability of documents. However, the Russian environment is quite different from the UK and there are some issues that investors should consider.

Issue 3998 | 29 Sep 2008

Foreign Investment in Russia's Strategic and Defense Sectors
By Partner, Glenn Kolleeny, Salans Moscow, St. Petersburg / and Randy Bregman, Partner, Salans New York Russia, as a sovereign state, has the right and even the duty to protect its strategic assets and safeguard its national defense and security.

Preparation and Maintenance of Purchase and Sale Transactions
By Alexander Ermolenko / Head of corporate practice, FBK-Legal Quite often, even before the due diligence procedure, the investor already knows (or thinks he knows) how the transaction related to the purchase of a business will be structured or what the most material assets are.

Emerging Realities in the Global M&A Market
By Tom Blackwell / Senior Vice President, The PBN Company Last year, some of the most substantial acquisitions in the world were made by Russian companies. These acquisitions were part of a new trend that has seen Russian investment abroad catching up with foreign investments in Russia.

Issue 3996 | 25 Sep 2008

SPAC -- New Gateway for Russian Companies to Global Capital Markets
By Mr Holger Hirschberg / Special to The Moscow Times In the wake of a poor global IPO market, so-called special purpose acquisition companies (SPACs) are becoming more popular with investors in American and European markets.

Legal Aspects of IPOs in Russia in 2008
By Alexander Klochkov / Special to The Moscow Times A dark cloud hangs over the international debt and equity markets from the credit crunch and recent political developments, but many Russian companies are still considering an IPO as one of their strategic goals.

Russian IPO Market Horizons
By Elena Khisamova / Special to The Moscow Times Against the gloomy backdrop of the situation in the world's financial markets, which has been amplified by the sad news of more banks facing tough times, the Russian economy still gives cause for optimism to both domestic and international investors.

London Calling
By Paul Salmon, Alican Babalioglu / The London Stock Exchange (LSE) allows companies to raise capital from the Main Market and the Alternative Investment Market. Investors may raise capital in these markets through listing shares, debt or depository receipts.

Challenges for Russian Companies Seeking International Listing
By Stuart Leasor / Special to The Moscow Times What a difference a year makes. A year ago I would have written about how Russian companies had closed the valuation gap with their Western peers and how there was a relentless appetite for Russian stocks.

Issue 3995 | 24 Sep 2008

What is employment discrimination?
By Alexander Konovalov / Attorney, Pepeliaev, Goltsblat & Partners Everyone should have equal opportunities to exercise their labour rights. Nobody may be subject to restrictions in their labour rights and liberties or gain any advantages, irrespective of sex, race, colour, nationality, language, origins, property, family, social status or occupational position, age, place of residence, attitude to religion, political views, affiliation or failure to affiliate with public associations, or other circumstances not pertaining to the professional features of the employee.

What Is Employment Discrimination?
By Alexander Konovalov / Special to The Moscow Times Everyone should have equal opportunities to exercise their labor rights.

Issue 3990 | 17 Sep 2008

The Ins and Outs of Outsourcing
By Inna Kachalova / Attorney, Pepeliaev, Goltsblat & Partners The international outsourcing world has existed for a long time and is spreading, complex and diverse.

Issue 3986 | 11 Sep 2008

Black Diamond
By Elena Verkhovskaya / Special to The Moscow Times Inga and I agreed to meet at the Coffeehouse near the Belorusskaya metro station. I was a little late and flew into the cafe, not noticing amid the hurrying pedestrians the pretty, young pregnant girl standing near the entrance. Then she called me, and we finally found each other.

Seryozhka
By Marina Gardamshina / Special to The Moscow Times This story begins on Oct. 3, 1997, in a small northern town when her first child was born -- a son. The mother and father anxiously awaited his birth, made plans, and dreamed about what he would become.

Create Yourself
By The Moscow Times, Elena Verkhovskaya Marketing, Business Development Director / The Moscow Times together with the Charities Aid Foundation, of CAF, began the charitable creative program ""Create Yourself"" to benefit children with disabilities in May. Thanks to the help of our partners and friends, many people have learned about the program, which aims to provide art therapy to needy children.

Building Business With an Open Heart
By Marina Glushkova / Rolf Group Without question, Russia's rapidly expanding economy rewards the most active and responsive people.

Teaching to Give
Interview with Maria Chertok, director of Charities Aid Foundation Russia

Issue 3985 | 10 Sep 2008

Some Practical Aspects of Hiring Foreign Citizens in Russia
By Maria Landau / Associate Salans, Moscow Hiring foreign citizens has become a real challenge.

Issue 3961 | 7 Aug 2008

Dover Corporation, a large western diversified manufacturing company is coming to the Russian market.
Draft interview with Pavel Goldman for the first publication

September 2008 will see a unique event that will be of interest to the entire power-production community.
The Russian market is welcoming a major Western industrial conglomerate - the DOVER International Corporation.

Issue 3929 | 24 Jun 2008

The Legal Factor in the Investment Climate
By Andrey Goltsblat / Special to The Moscow Times Never before has the production sector of Russia's economy seen such high investment growth as nowadays. In particular, foreign direct investment totaled, according to the Russian government, $47 billion in 2007, meaning a growth of more than 20 percent against 2006.

The Russian Stock Market Is Better Than Is Assumed
By Nikolay Egorov / Special to The Moscow Times Two years ago, the ratio of domestic equities to Russian companies' depository receipts was at approximately 50-50. Today, it is 70 percent domestically traded compared with 30 percent internationally traded.

IR in Russia and the CIS: The Country Makes a Difference
By Mikhail Matovnikov / Special to The Moscow Times Interfax Business Service and Thomson Financial have for a second time made a study of the quality of investor relations (IR) in Russia based on a survey of the investment community. In the 2008 study, we have included IR specialists from two CIS countries -- Ukraine and Kazakhstan.

IR Officers Have Been Officially Recognized
By Olga Rink / Special to The Moscow Times On April 29, 2008, Order No. 200 of the Health and Social Development Ministry was issued including the profession of IR specialist in Russia's qualifications list.

Strategic Communication Management
By Juliana Slaschyova / Special to The Moscow Times In 2005 to 2007, the global financial scene saw an upsurge of Russian public placements -- some 50 domestic corporations raised more than $50 billion on foreign and local stock exchanges.

IR Management
By Sergey Solomakha / Special to The Moscow Times IR management, as well as many other professions demanding some special level of economic development, is rather young in Russia, which leads to a typical set of problems.

Issue 3921 | 10 Jun 2008

Russia's Leasing Market in a European Context
By Nikita Mashkov / Special to The Moscow Times Each year leasing in Russia strengthens its position and the last year was no exception. According to research by the Russian association of leasing companies, in 2007 the leasing market has shown unprecedented growth, more than in two times in comparison with 2006.

Leasing Market in 2008
By Roman Romanovsky / Special to The Moscow Times The leasing market has grown in 2007 by 2.6 times and totaled $39 billion. It failed to grow even higher due to the liquidity crisis, which also impacted the market balance of power.

Leasing Taxation in Russia. VAT Recovery Specifics
By Ludmila Batalova / Special to The Moscow Times Tax benefits represent a significant advantage of leasing activities as compared with rental or purchase and sale contracts. However, leasing deals are often considered by tax authorities as a means of taxation avoidance and illegal VAT recovery.

Automation of Leasing: National Peculiarities
By Dmitry Kurdomonov / Special to The Moscow Times When creating representative offices abroad, transnational leasing corporations solve the problem of automation at an early stage. It would seem that the simplest solution is to implement in affiliate companies the same information system as in the parent organization, but most international leasing companies take a different approach.

Issue 3905 | 20 May 2008

Are Things Really Getting Better?
By Sergei Pepeliaev / Special to The Moscow Times Arbitration court statistics for 2007 help form an objective impression of the way tax relations are tending to develop in our country, indicating that there are still considerable risks involved in unjustified actions on the part of the tax authorities. On the other hand, the state arbitration courts are finding the strength, on the whole, to stand up against breaches of the laws in tax relations.

13% Tax -- Does It Apply to You?
By Danara Sharp / Special to The Moscow Times The personal income tax rate in Russia is one of the most attractive in the world due to the comparatively low rate of 13 percent. There is however requirements that must be met in order to have a status of tax resident within Russia and to be applicable for the tax rate of 13 percent.

A New Order to Performing Tax Audits And Tax Control Measures
By Irma Nemshevich / Special to The Moscow Times The main changes in the articles of the Tax Code concerning tax control were made by Federal Law No. 137-FZ dated as of July 27, 2006, and were put in force from Jan. 1, 2007.

Are Tax-Free Dividends for Foreign Investors Possible?
By Evgeny Timofeev / Special to The Moscow Times As of this year, Russia alongside many countries with developed tax systems has a participation exemption enabling Russian (but not foreign) companies to receive dividends from Russian or foreign subsidiaries tax-free.

Breach of Procedure Leads to Refusal to Collect Taxes From the Taxpayer
By Galina Akchurina / Special to The Moscow Times The Tax Code pays much attention to the legal governing of both the procedure for calculation and payment of taxes as well as the procedure of tax administering.

Issue 3883 | 15 Apr 2008

More Opportunities for Russian Issuers in 2008
By Elena Khisamova / Special to The Moscow Times The positive dynamic of Russian ECM volumes over the past several years is a clear sign that the local market has entered a new phase of its development and become a stable source of long-term capital.

How to Sell the Future to Investors: The Role of Investor Relations Before, During and After the IPO
By John Rose / Special to The Moscow Times Investor relations should ideally begin years before a company registers to float its shares on a stock exchange. Unfortunately, companies often make little to no investment in investor relations until just before or even after the IPO -- sometimes ignoring shareholders, hiding from bankers and spending as little time as possible with fund managers and institutional investors.

IPO Trends in Russia
By Marchello Gelashvili, Galina Shilina / Despite the global credit crunch, 2007 was still a record-breaking year for IPOs, with 30 listings by CIS and Russian domiciled companies generating $34 billion. Investors continued to focus on large deals, with a median deal size of $614.2 million.

DD for IPO
By A.S. Yermolenko / Special to The Moscow Times The first of the abbreviations used in this headline was established in business vocabulary long ago. The procedure it denotes is popular in economic practice. The very phrase ""due diligence"" -- literally, ""due care"" or ""due attention"" -- is used to denote the overall audit of company activity, as well as separate audits of other components of business: legal, tax, financial, construction or corporate due diligence. In most cases, such an audit is conducted by the investor at the purchase of someone's business or when making a decision regarding participation in someone's business.

Russian IPO/SPO Market -- Key Trends and Outlook
By Igor Katusha / Special to The Moscow Times Negative trends in the international financial markets and fear of global recession caused by events in the U.S. mortgage credit market has created negative conditions for placements made in 2007. Despite complex market conditions, 2007 saw a record Russian IPOs and SPOs. The total volume of IPOs and SPOs by 28 Russian companies reached $31 billion, including 22 IPOs totaling $21 billion, twice as much as in 2006.

IPOs in Russia: Where and How Are They Offered?
By Vladislav Kvetinsky / Special to The Moscow Times Since 2003, the subject of IPOs has become unusually popular among business media, which have sometimes formed euphoric notions among Russian business managers and owners about this method of capital procurement, as if it is a magic wand capable making a business and its owners rich in a moment.

Issue 3863 | 18 Mar 2008

The Impact of EU Competition Law on Russian Business
By Joseph Hainz, Jorg Karenfort / The growing economic interaction between Russia and the European Union effectuates the increasing importance of EU competition law for Russian companies.

Transfer-Pricing Legislation -- When Will It Be Amended?
By Henrik Hansen / Special to The Moscow Times Transfer-pricing reform has been on the government's agenda for the past few years, and a number of bills have been presented to the public. One even made it to the State Duma. Despite this, no amendments have yet been made to the existing rules in Articles 20 and 40 of the Tax Code.

Due Diligence of Commercial Real Estate Objects in Russia
By Sergey Markov / Special to The Moscow Times Before acquiring any asset, an investor often needs to define the legal risks that such a transaction can cause.

Issue 3804 | 11 Dec 2007

Thin Cap -- Still an Issue?
By co-head of Russian tax practice, Partner, Evgeny Timofeev / Salans As most countries do, Russia protects its right to tax in a variety of ways. One of them is designed to fight erosion of the tax base of Russian entities by paying excessive amounts of interest to related parties.

Taxation of International Transactions: Why Foreigners Keep Overpaying VAT in Russia
By Anton Zykov, head of law practice, Attorney-at-law, Irma Nemshevich / HLB Vneshaudit As a general rule, sales of goods, works and services by Russian companies are subject to value-added tax. However, some cross-border services are exempt from VAT.

Tax Blackmail Through the Use of the Taxpayer's Personal Account Card
By Head of Group of Tax Dispute, Galina Akchurina / FBK-Legal All companies are registered with the tax authorities by means of special cards called taxpayer's personal account cards that keep payment records. They usually contain information about the taxpayer's settlements with the budget and the current tax due.

Issue 3799 | 4 Dec 2007

Innovations in Land Law on Acquisition of Rights to State and Municipal Land
By Inga Shakhnazarova, / Associate, Salans On Oct. 30, 2007, the new Federal Law No. 212-FZ came into force amending the Federal Law on the Introduction of the Land Code of the Russian Federation, or Introduction Law, and the RF Land Code in regard of the procedure for acquiring rights to state and municipal land.

The Parity of Cadastral and Market Values of Land Plots in Government Cadastral Appraisals
By Elena Kovalchuk / Head of the department of legal consulting on commercial use of lands, Estimating the value of assets is a worry for owners of practically every company. But the price valuation of land -- an important and fundamental resource -- is often the very foundation or platform for building a business.

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