Roberto D’Agostino: Ekaterinburg Honorary Consul on the future of Russian investments in Italy.

Edoardo Bonatti
7 maggio 2018


Roberto D’Agostino has been Honorary Consul for Italy in Ekaterinburg since March 2013, responsible for the regions of Sverdlovsk, Kurgan, Tumen, Orenburg, Perm, the independent district of Khanty-Mansy, the Republic of Bashkortostan and the Republic of Udmurt.

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The interview Mr. D’Agostino, you come from a long experience in the private sector in foreign business relations, and particularly with Russia. Has this come about because of the duties included in your position or has there been influence from other factors?

D’Agostino: First of all, I would like to thank you for your interest in the work being done in the Honorary Consulate of Italy in Ekaterinburg. It is always a pleasure to talk about our work, especially because I think that there is a positive future for relations between Russia and Italy. Russia is a country that has a wide range of opportunities, for Italians looking for work but also for those who want to visit as tourists. I came to Russia mainly for work-related reasons, but once I got here I understood that the country potential is not restricted to business opportunities. The opportunities for growth presented to the visitor or expat are very diverse and encompass a multitude of spheres.

Ekaterinburg is the capital of Oblast in Sverdlovsk, and it is the main industrial and cultural centre in the Urals region. Italy is present in this territory with an Honorary Consulate which aims towards communication, as can be seen from social media – Facebook and Vkontakte, which is the most important Russian social network. Which are the most outstanding results obtained from this kind of web activity? Who are the main visitors, Russians or Italians?

There is no doubt that social networks are a powerful instrument of communication. Facebook and Vkontakte are not used just for business and cultural events, but we offer assistance and consultancy to those who need our help. For example, sometimes Russian citizens who want to live and study in Italy write us asking for information on procedures for obtaining an entry visa or residence permit. In addition to the specific information, we try to give some advice on how to integrate, which is needed to overcome the cultural barriers one can find in another country. Initially, our work in the Consulate concerned mostly Russian citizens, but the number of Italians increases every year. Of course, as we are in Russia, we mostly deal with Russians. However, it is difficult to say from whom we receive the higher number of requests. I would say that now it is about the same, from Russians as well as Italians.

Speaking of Italians, how many are there in the Region? What are their main activities and their level of integration?

Today about 50 Italians work or study in the Federal District of the Urals. The social integration progresses without any particular problems, and when some do come up, they are easily solved.

Back to the Consulate, which are the sectors that you deal with mostly?

We do not have any specific economic or cultural objectives. However, we do try to cover everything that deals with Italy. We try to meet the needs and interests of Russians in culture, art, history and of course in business relations.

The volume of commercial exchange between the Russian Federation and Italy is still feeling the effects of the economic crisis of 2014 to 2015, and the effects of sanctions and counter-sanctions. In 2016, commercial exchange reached 17.4 billion euro compared to the 21 billion in 2015, a 23.9% decrease. Nonetheless, estimates for 2017 seem to be better, and Italy is still the second commercial partner from Europe in the Federation, after Germany. Is it the same in the Urals region?

Russia has always been and continues to be an important partner, despite sanctions and other problems our cooperation endures. Thanks to this cooperation, relations between Italy and the Sverdlovsk region have lasted more than 25 years.

The Russian economic system is characterized by big oligarchs that have sizeable fortunes mostly made from the use of natural resources which of the country is rich. Apart from this category, what is the typical profile of a Russian businessman/investor, or those that operate in your area?

Russian businessmen have a distinct sense of responsibility, and those who operate in the Urals region are involved with a wide range of sectors. Many of those businessmen live and work in Ekaterinburg. It is not easy to say which sector is prevalent. Here in the city, businesses range from the press to tailoring, to construction and metal industries. I can say that entrepreneurs are very involved themselves, have a clear talent for recognizing business opportunities, and for organizing their company in a way that permits everyone to collaborate and work in synch.

In terms of stock and flows, Russia is definitely active on the Italian market, probably more than Italy in Russia. Are Russian investors still interested in Italy, even if the political situation is not very stable at the moment, do they prefer Italy to other emerging markets such as the oriental ones?

The dialogue between Russia and Italy continues, in spite of the political situation, and sanctions have not compromised it. After all, Italy and Russia are not only connected by the economy, but an important part of relations lies in the shared politics and business.

Looking at the near future, with upcoming elections in both countries, it is not easy to make any forecast on the development of political relations between the two countries. Is there any uncertainty on the Russian side, and if there is, how could this influence the decisions made by Russian investors in the meantime?

Russian investors make investments in Italy that are totally above board, but profitable. Working with Italians is, first of all, a matter of profit, not a matter of politics or presentability. Bilateral relations are important for Russia as well as Italy and investors from both countries know this.

Of course, Russian tourists are still today a very important resource for the Italian market. According to estimates from Banca d’Italia in 2016, Russian visitors in Italy were 876 thousand, a 5.3% increase over the previous year. Tourists are usually very happy with their visit. Is this flow, jointly with the Russian population in Italy (36,361 individuals on 1 January 2017), a potential attraction for investors in Italy?

Of course, tourism favours work. After visiting a country and seeing how it works, one may want to use contacts made for business purposes. I would like to point out that this is one of the main objectives the Honorary Consulate of Italy pursues.

In addition to the new visa for investors Italy now offers an advantageous tax regime consisting in a one-off payment of 100,000 euro per year to those who move their fiscal residence to Italy; for family members, the one-off amount is 25,000 euro per year. Do these conditions give a further incentive to Russian businessmen or does the Russian tax regime remain a stronger attraction?

Naturally, these advantages will significantly facilitate relations, as more business will be able to collaborate. However, we must emphasize that business is business and understandably the choice of country in which to invest will fall on to the one that offers better conditions. So, tax breaks can certainly be another good reason for choosing to invest in Italy.