Northern Ireland companies are missing out on huge export opportunities to Russia and the Former Soviet Union countries, according to tax and legal specialists on a visit to Belfast.
They said firms in energy, machinery, healthcare, sports, IT and other sectors will find a willing market for products in the region and while legal and tax-related barriers to entry remain, doing business between the UK and Russia has simplified substantially over the last few years.
“Every competent company director in Europe needs to have a policy on Russia, Ukraine and the Former Soviet Union (FSU),” Yuri Botiuk, head of Russia at Pinsent Masons in London said.
“Russia is the closest Bric (Brazil, Russia, India and China) to Europe and has the resources required by the two biggest BRIC nations.”
Speaking in Queen’s University’s Riddell Hall at a Doing Business In Russia seminar organised by Grant Thorton and Pinsent Masons, the lawyer said that aside from the obvious markets of Moscow, Kiev and St Petersburg, there are also big opportunities in further afield regions.
“There are great swathes of the FSU that need to be redeveloped through root and branch restructuring, both physical and corporate,” he said. “There are over $500bn of infrastructure projects in the FSU going forward in the next 10 years.”
Olga Bondar, a tax manager at Grant Thornton’s London office, said that by joining the World Trade Organisation in August, import duties on many products to the region will be gradually |reduced and open up trade opportunities for Northern Ireland businesses. But she warned that imported goods to Russia will be subject to value added tax while importers will need to have obtained relevant documentation.
In addition, any business operating in Russia should hire specialists familiar with the region’s tax system, she said.
Northern Ireland currently exported £38m worth of goods and services to Russia in 2012 but is targeting exports of £42.9m a year by 2015 in the Programme for Government, according to Maurice Patterson from Invest NI who was also speaking at the event.
That’s already well up on the £26.8m which was exported in 2011 and the Mr Patterson said the region is a key target for agency which is running a trade mission to Moscow and St Petersburg at the start of June.