Henry Kirby in London -

UK businesses were encouraged to look beyond geopolitical tensions and toward potential investment opportunities at the Roadshow of Russian Regions in London on March 18.

The event, hosted at London’s Royal Garden Hotel by the Russo-British Chamber of Commerce and Russia’s Agency for Strategic Initiatives, brought together government representatives from a number of Russian regions and UK businesses leaders in a series of presentations and meetings.

In an opening address, the Russian trade representative to the UK, Boris Abramov, admitted that: “last year Russian-British trade and investment became hostage of geopolitical situations and a domestic economic slowdown – sanctions, lower oil prices, tight monetary policy and capital outflow all negatively affected it.”

“However, excellent government support can and will provide British businesses with real benefits when investing in Russia,” Abramov added, citing “tremendous growth potential, consumer market capacity, human capital, vast natural resources, unique geographical position, and an attractive taxation system” as proof of this.

Indeed, a common theme across all the Russian regions’ presentations was the variety of generous tax cuts for foreign investors, such as the Leningrad region’s corporate tax reduction from 18% to 13.5%, and 0% property tax for foreign investment projects.

The vice-governor of the Leningrad region, Dmitry Yalov, appealed to UK businesses to consider operations in Russia: “We are counting on continued cooperation with UK investors, we will do everything at the federal and regional level to make them feel welcome.”

Abramov singled out the telecommunications sector as one that “has shown strong development in recent years and is expected to grow further”. With the auctioning of Russia’s high-speed 4G mobile data spectrum set to be announced in first quarter of 2015, the sector could prove to be an attractive proposition for foreign investors.

The scope for UK involvement in the Russian market was highlighted by Abramov, who observed that: “the UK lags behind other European countries in terms of [investment] market share. Germany, for example, has about 6,000 companies in Russia compared to the UK’s 600.”

Roger Munnings, chairman of the board of directors at the Russo-British Chamber of Commerce, urged UK businesses to take advantage of current circumstances by “starting to build relationships and exploring opportunities”.

“There is never a better time to start than when things are extremely difficult, and you will find that the time you invest now, even if you don’t invest funds, will pay dividends when things improve in the future, as they surely will,” he said.