[yardie]

By trying to undermine his opinion you only ended up reinforcing it. 1) 20% "business tax" or knowing the right people. Can be interpreted as paying someone 20% of X to put me in contact with the right people. The point is getting business done should be transparent and only the buyer and seller need to exchange any money. Paying 10 guys in between is not how normal business gets done.

2) I feel very strongly about police corruption. Even if it is only a small powerful minority. The fact is the rest of them know there is a problem but won't do anything to stop it. Which means they are part of the problem. And if they are overshadowing then it is institutional corruption. And once they are that embedded than numbers don't matter because every part of it is rotten.

[ruslan]

I hear about this 20% tax from people who never ever been to Russia. What the fuck ? Where did you get this data from ? What 20% FSB business tax are you talking about ? I'm Russian, I live here in Russia and doing business for three years, I pay 13% flat tax, nothing more. One can even choose to pay 6% off the gross income.

Taxation complexities may become effective when you start making more than $1.5MM in annual revenue or if you are doing some business with natural resources (oil, gas). Till then you are treated as small business. I believe this a regular business rule for almost every western country.

I don't deny existance of curruption in Russia. It really is and very huge. But as long as you are within the averages it does not reach you. I never paid any bribes, I don't want to get caught on doing this and lose everything.

[rjurney]

I got the data from people operating businesses on a large scale, that span Russia. It might have been 15%, actually. Its been six years. But I've spent eight months in Russian, learning my terrible Russian. I'm not just making this up.

Do you know anyone like that? This was Moscow, and this was payment to the FSB for 'protection.' Nobody much argued with this at the time, it seemed. It was better to be able to pay the FSB than to have to decide which Krysha to pay.

I'm surprised you find this strange or controversial. How much business have you done at a high level there?

That being said, it sounds like things have improved dramatically. Thats great, and shows how disconnected I am.

[ruslan]

Paying "protection" fees to Krysha (as you named it) was common in mid 90th when government was weak and criminals ruled Russia. Now criminals pay to gov if they don't want to follow Khadarkovsky/Ukos story (thank mr. Putin). I'm not in Moscow (yet do visit it regularily), but I still cannot imagine paying to FSB or to Militia or whatever if you are doing legal business. The thing is most multi-billion businesses started in Russia in 90th are still being ruled by criminals and one way or another are illegal or involved in money washing.

I have friends who are doing business for more than 10 years (mostly in telecommunication and software industry), no one pays for "protection".

The others most corrupted spheres in Russia, beside natural resources, are land estate and development business, mostly because there are huge money rolling around. Avoid this three and nobody will "care" about you or your business :)

[ii]

Criminal "protection" "taxes" were common 15 years ago and even then it was nothing like "20%" for everybody, it varied greatly from place to place and from business to business and depended on who you know and where are you from.

Small-to-medium businesses are free from anything like that by now AFAIK.

To conduct a "serious" business in most fields you still have to know the right people though, if you don't want it to be taken from you.

[rjurney]

Not everybody, I was talking about people operating large enterprises. When you talk about knowing the right people, I think you are describing this 'tax.'

As to variance: it was my understanding that the FSB was much more even in its pricing than the chaos and gangs before it.

[ii]

Most big companies I know just hire a right person who knows a few FSB generals and create their very own "defense" departments to solve these problems. They pay only salaries to people who know what to do. No bribes or "taxes" whatsoever.

[cousin_it]

The fact is the rest of them know there is a problem but won't do anything to stop it. Which means they are part of the problem.

Spot on, thank you. I'm Russian and somehow this formulation never once occurred to me. This says something about me. :-(