Russia In The Outsourcing Race
India and China still hold the lead, but Russia, is raising the stakes with attractive incentives.
Jan 25, 2006
Despite its ample supply of sophisticated engineers and scientists, Russia didn't embrace outsourcing until about a year ago. That's when President Vladimir Putin made an official visit to Bangalore, India, and returned singing the praises of IT services and programming-for-hire.
Since then, the government has trotted out a new policy aimed at beefing up Russia's appeal. It has approved legislation and funding to create "technoparks" in St. Petersburg, Novosibirsk, Nizhny Novgorod, and Dubna, near Moscow. Each will receive government funding of $80 million to $100 million.
The government is also implementing more favorable tax treatment for the IT industry. Under tax amendments set to kick in this year, IT companies will be able to pay a lower rate of social security tax - just 14%, vs. the norm of 30% - and they'll be exempted from value-added taxes on exports.
All these changes are warmly embraced by Russoft, the association of Russian software and IT-services companies, which tries to promote Russian outsourcing through conferences and events such as the annual U.S.-Russia Technology Symposium and U.S-Russian IT-Season.
Note: Materials of Business Week were used in the publication.
Since then, the government has trotted out a new policy aimed at beefing up Russia's appeal. It has approved legislation and funding to create "technoparks" in St. Petersburg, Novosibirsk, Nizhny Novgorod, and Dubna, near Moscow. Each will receive government funding of $80 million to $100 million.
The government is also implementing more favorable tax treatment for the IT industry. Under tax amendments set to kick in this year, IT companies will be able to pay a lower rate of social security tax - just 14%, vs. the norm of 30% - and they'll be exempted from value-added taxes on exports.
All these changes are warmly embraced by Russoft, the association of Russian software and IT-services companies, which tries to promote Russian outsourcing through conferences and events such as the annual U.S.-Russia Technology Symposium and U.S-Russian IT-Season.
Note: Materials of Business Week were used in the publication.