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Authors: Alexandra Bretschneider, Vice President & Cyber Practice Leader at Johnson, Kendall & JohnsonEd Ventham, Cyber & Fintech insurance specialist It seems like every day there is news of another major cyber security incident in the press, followed by the latest statistics on the rise in ransomware attacks and extortion demands.Then every couple of months there is a new Cyber security or Privacy law passed by a government body requiring a new wave of compliance. Some governments are also beginning to debate whether they should outlaw the right to pay a ransom to a criminal at all (see article), but cybercrime which is often perpetrated by nation-state actors, will continue to flourish despite the regulatory and legal action taken against the malicious actors.And long gone are the days when only the big companies were the targets for their money or information. In today’s world, no business is immune to being the target of an attack as hackers seek the easiest and most economical means to earn quick cash. Although the ‘spray and pray’ techniques are perhaps not as successful as they once were (the level of company security is undoubtedly rising to counter such obvious cyber threats through the use of antivirus, firewalls, and Multi-Factor Authentication), the sophistication and frequency of cyber attacks and incidents have demonstrated clearly that no one is 100% safe.What was once considered an “IT issue” – now has the attention of the C-Suite and shareholders/board members – it is a companywide problem, from the most senior leader down to the most junior employee.Is there a solution for this dynamic security risk?Cyber risk management requires a broader and holistic focus; it is not solved with only the purchase of the latest and greatest technology, or only a cyber insurance policy. It requires investment in talent, education, training, and a review of internal processes and operations on a regular basis. Cyber risk management is ultimately accomplished through a combination of People, Processes, and Technology.People and Sensitive DataEmployees are the gatekeepers to our organisation. The responsibility for data security should be written into our employees’ job descriptions and understood as part of their duties. Furthermore, organisations should invest time and money into frequent and engaging training tools. Conducting phishing tests periodically can assess the efficacy of a training programme and identify users in need of a refresher course. Consider assigning an in-house cybersecurity director, responsible for the data security oversight of the organisation.ProcessA business should start with a self-assessment, going through the process of identifying what type of data and sensitive information you have, and who should vs. does have access to it. Developing solid processes around managing access, deploying patches, acting on alerts and notifications of a potential incident should be a consistent practice. Businesses should spend time developing cyber-specific incident response policies as a subset of their broader business continuity/disaster recovery planning, and these plans should be tested via tabletop exercises. Process should include supply chain/vendor management: taking a look at vendors and partners to question what type of access to or sensitive information they have about your organisation, and how it is managed. Ultimately, what is your ‘vendor management protocol’ – how do you choose them, and what due diligence do you do to ensure your reliance on their support is not crippled in the event of an incident which is indirectly going to affect your company’s integrity and operation? This is critically important if you are reliant on a managed-service provider for your IT infrastructure and support but still applies to non-IT/operational vendors.Computer Systems and TechnologyOf course – when we think of cyber we often think of technology. The technologies of today that a business should be considering include Intrusion Detection Systems, sophisticated spam filters and firewalls, next-generation antivirus software, Endpoint Detection, and Response systems. Multi-factor authentication has become a must-have tool in the eyes of insurance companies for them to consider offering coverage, which can be centralised through a password management software.But, to err is human. And as much as we invest in the prevention of a cyber attack, human error still leads to the majority of cyber incidents today. The goal of your cyber risk management programme is not to reach a state of being entirely cyber secure (because no such state exists). Instead, your goal is to reach a state of cyber resilience in which your organisation can sustain and recover from an attack.Cyber Security InsuranceOnce a luxury purchase, Cyber insurance has become a must-have for businesses everywhere to ensure the survival of your organisation after an attack. Insurance is a form of risk transfer and is meant to provide a backstop when the preventative controls of an organisation have failed or proven inadequate. Cyber insurance provides the key components of incident response, in the form of attorneys/lawyers, IT forensics, criminal negotiators, public relations, and compliance with the various privacy laws. Coverage is designed to respond to and provide the defense during a regulatory investigation, and cover fines and penalties assessed to you, as long as they are insurable by law.Cyber-crime coverage offers indemnification for insureds who have suffered social engineering, funds transfer fraud, and phishing attacks. With the explosion of ransomware during the global pandemic, the coverage for the extortion demands offered by standard cyber insurance policies proved critical to the recovery process.Coverage for revenue loss related to a cyber incident can be found in a comprehensive cyber insurance policy, both during the time your network is down, and/or after you are back up and operable but have then lost prospective revenue as a result of an adverse media event.As quickly as the cyber risk evolves and grows, cyber insurance carriers are constantly trying to keep up. With the increase in both frequency and severity of attacks, profitability on insurance premiums historically has waned and the insurance markets are being forced to increase rates in order to keep up with the increased losses. In order to minimise their exposures, insurance markets are modifying policy terms and conditions, restricting coverages that were once broadly written, like extortion, with sub-limits and coinsurance penalties. Ensuring you have a comprehensive cyber policy is just one issue – but obtaining coverage at all is becoming problematic for organisations that are falling behind the curve in their cybersecurity controls. Without multi-factor authentication on email access, administrator accounts, and remote access are becoming a prerequisite to obtaining coverage. Segregated backups, encryption, firewalls, incident response planning, employee training and more are becoming preferred controls securing a better premium rating.TakeawaysBusinesses should start the conversation now with their broker partner about what is needed to be insurable and to obtain optimal insurance terms. With cyber insurance continuing to serve as the lifeblood for organisations to recover from cyber-attacks, obtaining and retaining coverage is crucial as part of broader cyber risk management and resilience programming.

Why the Netherlands? This is a very often asked question. That’s not so surprising, given that the Netherlands is an attractive country for foreign entrepreneurs due to its strategic location and good infrastructure.It is not for nothing that many non-European companies choose the Netherlands as their first choice of a European base. In the past, American companies often chose the UK as the starting point for their European operations. Now that the UK has left the EU, the Netherlands is a logical alternative.The Netherlands as a European baseThe Netherlands attracts many international companies as a European base. It is a country known for its open trade culture and its hospitality to foreign entrepreneurs. It lends itself as the perfect base for your European activities. It offers:a tax treaty with more than 80 countriesan attractive tax environment for foreign companiesperfect IT infrastructure (fibre optic network)local people who speak English to a good standarda stable economy and stable public financesa high level of education of residentsfew labour disputes and strikesCountry and GovernmentThe Netherlands has a total population of 17.5 million (June 2021). It is a parliamentary democracy with a monarch as head of state. Government ministers are the people’s representatives with respect to the actions of the government.The monarch has no political power and cannot therefore be held politically accountable by parliament. The Netherlands is divided into 12 provinces, each with its own local authorities.Tax environmentThe Netherlands is known for its favourable tax climate for foreign companies. The participation exemption – a measure that prevents double taxation of company profits — can be included in the corporate income tax assessment. Whilst the law does impose a number of conditions, the application of the participation exemption is still a plus point for the Dutch business climate.Corporate income tax is low with 15% over the first € 245 000 profit  and 25% over the additional profit. By splitting a concern into several limited companies the average tax rate can be reduced. There is also a VAT advantage for trading companies. A company established in the Netherlands can make use of the import licence referred to in Article 23 of the Dutch Turnover Tax Act. In concrete terms, this means no pre-financing of VAT when importing goods.ExpatsThe Netherlands is also an attractive country for expats. The country’s second language is English. The Netherlands is also seen internationally as an open and tolerant country, so that employees and employers alike feel at home here. There are many complimentary reports from expats about the Netherlands posted on YouTube. (Search: ‘expats — living in the Netherlands’.)Furthermore, expats benefit from the ‘30% ruling’. This helps compensate for the extra costs incurred by an expat working abroad, whereby 30% of their income is exempt from income tax. There are, of course, some conditions that must be met.Structuring profit streamsWhen doing business internationally, it is often (fiscally) interesting to look at how the profit streams of the Dutch and international activities are arranged. This limits the risks to your business. Furthermore, you can take advantage of various tax schemes and benefits in the different countries where you operate. Of course, it is necessary to comply with the EU regulations on Base Erosion and Profit Shifting (BEPS).
An advantage of the Netherlands is the ease and openness of communications with the tax authorities. It is possible to consult on this subject in advance and reach agreements (APAs). In other EU countries, this is often not possible and there can be long periods of uncertainty about, for example, applied intercompany prices.EmploymentIn the Netherlands, labour matters are regulated slightly differently than in other countries. In America, for example, Dutch labour law is regarded as being complex. Much has changed in recent years, although the complexity remains. However, the current system is good to work with and flexible if you manage it well.The Netherlands now has a labour potential of more than one million self-employed workers. This makes flexible business easy.The Netherlands as a distribution countryThe port of Rotterdam is the largest port in Europe; Amsterdam Airport is one of the larger European hubs for goods and people. The Netherlands is a strategic choice geographically. 95% of Europe’s most lucrative markets are just 24 hours’ drive away from Amsterdam or Rotterdam.The storage facilities for all kinds of goods are enormous. The Netherlands has few natural resources and is forced to earn its income by trading.Some factsThe Netherlands is ranked as the most competitive economy in Europe and fourth in the world according to the World Economic Forum, the fourth most competitive nation in the 2020 IMD rankings; and fifth in the 2020 Global Innovations Index.The EU Innovation Scoreboard 2020 ranked the Netherlands as the fourth-best nation for innovators. These are impressive figures for a small nation.Founding your own businessThe most common legal form is a private limited liability company (‘BV’). Incorporating a company is straightforward and can be done within one week if you have all the documents in place. Opening a bank account has become more difficult over the last few years, but this is a development occurring right across Europe.Interested in the Netherlands?For more information on doing business in The Netherlands, we have launched a new platform - Centuro Connect, that dives into blueprint specifics helping you do your research all in one place. It is the ultimate tool for understanding market entry options, HR, Immigration, Legal Requirements, Tax & Accounting, and much more.

We recently had the privilege of speaking with Executive Vice President and Group CEO of Verizon Consumer, Ronan Dunne. In this exclusive interview, Ronan provides key insights into how 5G is transforming our lives, and the impact it has had on Verizon.How is 5G transforming Verizon / our lives?Ronan Dunne: Whenever a new generation of technology comes out, we’re always prone to saying, “So what’s the new – new?” 5G has significantly enhanced existing capabilities, including:- The use of mobile edge computing: the ability to push a computer off an individual device and to be on the edge of the network and rely on the low latency of the 5G network – means that industrial robots, which usually cost around 100 000 dollars, can now be built for 25 000 dollars as there is less hardware which needs to be inserted.- The ability of the 5G network to support 10 times as many connected devices are actually the reality of AR / VR reality. Instead of a headset that typically requires you to be wired to it, we’re talking about a clip on the side of your designer sunglasses, which is giving you an augmented reality capability, and practically speaking we’re about 12-18 months away from those products being commercially available.- Across all of these considerations, there is much to be excited about with 5G aiding a lot of what we dreamt of real in a short period.Is 5G currently available globally or only in the US?Ronan Dunne: In all fairness, mobile edge computing is very much in its infancy in relation to 5G. 5G capability is being deployed across all the world currently. It is mostly deployed in the mid-band regions, where a capacity of 3.5 gigahertz can be the sweet spot. In the UK, you can already enjoy 5G on your handset. There is massive capacity, for example, a download speed of 10Gigs, not 10 megs on a mobile device. This is coming out everywhere, however requires some of the standards to be upgraded and “SA standalone core” to be uploaded to the 5G networks.We’re talking about a 12-18 month cycle to deliver commercial-grade capabilities in the US and maybe 18 months behind that in Europe.As the current market leader, how does Verizon stay ahead and lead its market share?Ronan Dunne: The trick as a leader is not to do what is expected and to do the unexpected. Essentially divorce the industry and rewrite the rules of the game. My big passion is that actually, we’re not in the technology business at all. In my experience most consumers don’t buy tech, they buy the experience that tech enables.I see us as an experienced company. So my focus over the last few years has been turning the network in the service of the experience and outcomes. Rather than perhaps how Verizon was previously seen, as an engineering-led and network organisation.This has allowed us to evolve to the situation now, where much of what we do is around quality, choice, and experience. We partner with Disney, Apple Music, Google, etc. to create a platform that allows the most creative people across a wide range of industries to have access to the best tech that creates outcomes for customers. We have a well-executed platform strategy.What tips do you have as to how entrepreneurs could differentiate themselves?Ronan Dunne: At Verizon, we’re actually a service company, a subscriptions business, not a product. Typically, many think of us as a product business but the product is actually an Apple or a Samsung handset or device. The service is the ability to use that to do multiple things.  Depending on whether you’re in a product or service organisation, will determine the approach you need to take.Within a service organisation, two things I would say is:1. The service industry isn’t a homogeneous market – we focus on detail segmentation – we use segmentation as an acquisition tool. On the other hand, there’s value-based marketing, which is used as a retention tool.Once a customer joins Verizon, we build a profile of that customer, based on their engagement with us and the services we offer. So we then attribute that to build a capability, meaning that with every touchpoint that customer has with us, whether it’s the network itself or a retail store or elsewhere, we show up how the customer expects.  We use that rich insight, to know and recognise our customers.That’s really the key, to deliver personalised service and experience.2. We want to ensure that we go from the synergy of scale to the beauty of a personal relationship. We are the largest telecommunications company on the planet; we have 100 million consumers every day and 130 million customers overall between consumer and business. But every one of them is an individual and our ability to personalise is an essential ingredient as to how we differentiate.I think in any business, whether it’s service or product if you at least have that mindset you will be focused on what the customer truly values, not what you believe is important.To discover more about this insightful interview, watch the full episode here:

We are delighted to share with you our third edition of the Centuro Connect magazine. Things over at Centuro Global have been so busy, with many new milestones being achieved and our team growing in size and capabilities.We hope that the content in this magazine helps to reflects our appetite for risk and trendsetting. Our goal is to change the status quo of traditional tested methods of business and push ourselves beyond the normal boundaries.  Some of the key topics include in this edition will cover:-Latest update and summary of Centuro Connect -Insights and dedicated features related to Legal, Insurance, Marketing, Immigration and Tax -Events -Quick ReadsAs we head into the Autumn, we are excited about our upcoming plans, growing our community, and increasing the deal flow in the network. This issue provides updates and insights into the last quarter, and we hope you enjoy reading the content.To access the full magazine, please click HERE.  

2021 saw the 75th anniversary of the general ban of games of chance in Brazil1. The last roulette spin was played in the casino of the iconic Copacabana Palace Hotel on the night of 30th April 1946, when President Dutra issued a Decree-Law confirming the prohibition. Ever since, such general ban has been embedded in the controversial article 50 of the Criminal Contraventions Law, which defines games of chance as those where the result of the games relies exclusively or predominantly on luck and does not authorize them to be conducted in public venues or those accessible by the public, whether an entry is required or not. In the context of the foregoing, considering the internet as a public venue or one accessible by the public has attracted a lot of discussions, especially since hundreds of foreign online gaming and betting operators currently access the Brazilian market and accept bets from Brazilian punters. A conservative interpretation of the Criminal Contraventions Law would indeed consider the internet as satisfying the requirements for being deemed a public venue or one accessible by the public, especially as from 4th August 2015, when Federal Law No. 13,155/2015 amended paragraph 2 of Article 50 of the Brazilian Criminal Contraventions Law to specify that players betting online are equally subject to the payment of a fine. Currently, the only legal forms of authorised gambling in Brazil are:State-run lottery (both at Federal and State level), including scratch cards;Horse race betting at authorised racetracks;Online or land-based fixed-odds sports betting (pending regulation to be issued in 2021, as promised by the Federal Government, subject to licensing). Horse race betting is allowed at authorised race tracks in Brazil It follows from the above that the deciding factor in ascertaining whether a game is considered to be one of chance in Brazil is the extent to which winning or losing depends on luck or skill. Whenever the outcome depends predominantly on skill (even if luck is a factor in the result), the game will not be considered gambling and, hence, will not be subject to the restrictions of the Criminal Contraventions Law.Recognition of the distinction between games of skill and games of chance is increasingly present in Brazil nowadays. Skill games are generally referred to as “mind sports” (esportes da mente, in Portuguese). In this regard, the Brazilian Federal Government recently approved the Brazilian Chess Association for the Visually Impaired, the Confederation of Texas Hold’em, and the Brazilian Bridge Federation, recognizing that such games are sports. The Brazilian Federal Government recognizes Chess as a sport.In the context of the above, there are two main bills seeking to legalize all forms of gambling in Brazil, one proposed in the Senate and the other in the House of Representatives. Neither bill has yet been approved by the house where they have been respectively proposed:House of Representatives Bill of Law No. 442/1991Seeks to legalize various forms of gambling, both online and land-based.Registry for gambling addicts will be put into place and an individual will be included either by choice or judicial order. Such persons cannot gamble.Licensed entities must be:Incorporated under Brazilian law, with headquarters and management in the country;Technically capable of conducting the activity; and Financially and economically credible.Shareholders/managers must also provide documents such as income tax returns and clearance certificates, have no criminal precedents, etc.Servers for online gaming operators must be located in Brazil.Land-based casinos: the number of establishments per state varies between one and three and is based on the number of inhabitants of each state. Based on the current population of each State:São Paulo could have up to 3 casinos.Rio de Janeiro, Minas Gerais and Bahia could have up to 2 casinos each.Other Brazilian states could have 1 casino each.This limit would not apply to hydro-mineral resorts where casinos have previously been operated (i.e., certain cities in the State of Minas Gerais).No group may be granted two licenses in the same state, nor more than 5 licenses in the country. Licenses will be granted for 30 years, renewable for another 30 years.Senate Bill of Law No. 186/2014Seeks to legalize various forms of gambling, both online and land-based.Providers must comply with Central Bank rules regarding:Identification of players.Communication of financial transactions.Keeping of records.The first concrete development towards the legalization of gaming and betting came at the end of 2018, with the enactment of Federal Law No. 13,756/2018, legalizing fixed-odds sports betting, both land-based and online. The law defines fixed-odds sports betting as a lottery modality consisting of a betting system related to real sports-themed events (and, therefore, in principle, not to electronic sporting events), in which how much the punter can win if his/her prediction is correct is defined at the time the bet is placed. At the end of 2020, the Brazilian regulator (SECAP – a division of the Ministry of the Economy) announced plans to roll out regulations for fixed-odds sports betting by July 2021, a promise which was not honoured.In its latest draft decree released last year, SECAP opted for the concession licensing model out of the three possible approaches (being the other two approaches: authorization licensing [which would entail an unlimited number of licenses] or monopoly licensing). Under the concession model, operators will have to bid competitively against each other to "win" one of the few licenses limited in number. Initially, it was expected that no more than 30 operators would be able to function in Brazil at any one time. However, the latest rumors indicate that the total of available licenses should be between 50 and 100. But considering that approximately 500 foreign sportsbooks are believed to be currently operating in Brazil's market, even this increased number of licenses may not be sufficient. However, there is still hope this wind may change direction. Sixty-six companies responded to a recent Request for Information issued by Brazil’s National Economic and Social Development Bank (BNDES) and thirty-eight were selected to receive a Request for Proposal to select a company or consortium of companies to assist BNDES in structuring the industry for fixed-odds sports betting in Brazil, which would include working with SECAP in defining the most appropriate business model and legal framework. The news is that the qualifying applicants had not yet received such RFPs by mid-July and this is the reason why SECAP could not honor its promise to roll out the regulations. This may now happen in the months to come.Besides not defining the licensing model for fixed-odds sports betting in Brazil, Law No. 13,756/2018 was also greatly criticized by the industry for contemplating a turnover tax (3% for online operations and 6% for land-based operations), in addition to the taxes usually paid by companies operating in Brazil.Fortunately, this changed in July 2021 when Law No. 13,756/2018, by means of an Amendment to Provisional Measure No. 1,034/2021, which was converted into Law No. 14,183/2021, whereby Gross Gaming Revenue (GGR), rather than total revenue/turnover, became the basis for calculating the additional tax paid by licensed operators.ARTICLE CONTINUED HERE

GAMING AND BETTING IN BRAZIL CONTINUED...As the law now stands, payout (without limitation) and the corresponding withholding income tax (levied at the rate of 30%) will be deducted from the operator’s total revenue to form the tax basis. The gaming tax now applicable can be broken down as follows: Allocation of proceeds Law No. 13,756/2018 Law No. 14,183/2021 (which amended Law No. 13,756/2018)   Land-based operators Online operators Land-based operators Online operators Social security, subject to the provisions of article 26 of Law No. 8,212 of 24th July 1991 0.5% 0.25% 0.10% 0.05% Entities and units of the public, elementary, and high school units that have achieved the goals established for the results of the national basic education evaluations, as per the norms of the Ministry of Education 1% 0.75% 0.82% 0.82% National Public Security Fund 2.5% 1% 2.55% 2.55% Soccer entities that assign the rights of use of their names, trademarks, emblems, anthems,  symbols, and other similar signs for advertising and conduction of the lottery 2% 1% 1.63% 1.63% Payout and withholding income tax Min. 80% Min. 89% 95% 95% Gross gaming revenue Max. 14% Max. 8% As far as enforcement actions are concerned, these have so far focused only on local operators and money laundering issues. Since Brazilian credit card companies are subject to controls established in the Brazilian Anti-Money Laundering Law (Law No. 9,613/1998, as subsequently amended), which deems money laundering to be a crime when the monies laundered derive from any illegal activities (therefore, not only from crimes but also from criminal contraventions), some of them do not authorize clients to use their credit cards on gaming and betting websites. Brazilian credit card companies are subject to controls.Once fixed-odds sports betting is regulated and licenses start being issued, it is likely that enforcement against offshore operators that are not licensed locally will increase significantly.  Besides the legislative front, gaming and betting in Brazil have also been impacted by judicial decisions, especially those emanating from the Supreme Court (STF). In this regard, the courts of the State of Rio Grande do Sul are generally of the opinion that the Federal Constitution, which was enacted after the Criminal Contravention Law (which prohibits games of chance), revoked such law. Accordingly, such courts have issued decisions allowing establishments that exploit games of chance to remain open in such States (with certain restrictions until this is definitively ruled upon). The matter has been taken to the STF and has been deemed to be of “general repercussion”, which means that the ruling will be binding on all Brazilian courts. All lower court cases are suspended until this leading case is ruled upon. If the STF rules that the restriction on gambling is indeed unconstitutional, all forms of gambling could, potentially, be legalized without regulation.  The STF case and the bills of law mentioned in this column have been under review for a long time and are deemed extremely controversial. A ruling by STF, which may lift all restrictions on games of chances in Brazil, was expected for 7th April 2021and was then postponed for an indefinite date. In the light of the disruptions caused by the outbreak of the Covid-19 pandemic, it is uncertain whether there will be major progress in these matters within the next months.  Another important STF decision issued towards the end of last year and which unanimously ruled the end of the Union's monopoly on the exploitation of lottery modalities has also had a great impact not only on the lottery industry but also on fixed-odds sports betting. In its decision the STF recognized the Federal Union’s authority, embedded in clause XX of article 22 of the Federal Constitution of 1988, to legislate on consortia and draws (including lotteries), but that such authority does not preclude the States’ authority to exploit and regulate lotteries. Following this decision, several Brazilian states have taken the necessary steps to launch their own lotteries. However, the federal government wants to limit bets in state lotteries. In this regard, it is expected that SECAP will publish in the near future an ordinance establishing rules for the creation of lotteries and sports betting systems at the state level. One of them is the adoption of mechanisms that prevent bets from other states of the Federation. One of SECAP's goals is to prevent the creation of state lotteries from emptying federal concessions for the sector, but the measure can be challenged and end up in court. Several Brazilian states have taken the necessary steps to launch their own lotteries.  Moreover, the STF decision, not only an important victory for Brazilian states which have been exploiting their own lotteries, but may also potentially impact the regulation and exploitation of fixed-odds sports betting in Brazil, since, as previously mentioned, they have been deemed by law as a lottery modality. This means that, at least in theory, while Brazilian states will be in a position, following the STF ruling, to exploit any form of lottery already in existence at the federal level, and given that fixed-odds sports betting is a form of lottery, Brazilian states may be able to impact the federal licensing program by granting licenses to operators at State level.  It follows from the above that gaming, betting, and lottery industries are gaining greater momentum in Brazil. This may be incremented now that Senator Ciro Nogueira, who has in recent years spearheaded the legalization of all forms of gambling in Brazil, has been appointed by President Jair Bolsonaro as his Chief of Staff (Ministro da Casa Civil). We will have to wait and see. For more information on Brazil and doing business in the LATAM region, we have launched a new platform - Centuro Connect, that dives into blueprint specifics helping you do your research all in one place. It is the ultimate tool for understanding market entry options, HR, Immigration, Legal Requirements, Tax & Accounting, and much more. TAKE A LOOK AT THE PLATFORM 

The move towards AI-powered startups and mid-size businesses continues to grow rapidly, as companies leverage AI's capabilities. There seem to be two key streams of companies who appear well-positioned to explore AI and the impact on their business: startup ventures and multi-billion dollar giant corporations.  In a recent article by Harvard Business Review (HBR), they outline some of the ways in which AI ventures can help to support midsize companies.   If a midsize business wants to thrive in the AI era, it will need to evaluate the new ways in which it can become more competitive. This might include some options that have not yet been considered. Three examples HBR provides include:  1. Source cross pool data. By sourcing and organising data from multiple sources, mid-size companies are able to train and deploy machine learning (ML) algorithms for a variety of applications.   2. Source an in-house team of experts trained in AI to develop unique solutions. This is to help prevent putting long-term value creation.   3. Connect to an AI-focused CVC fund. This helps midsized firms to pool financial resources as well as technical and business expertise to scan and invest in the AI startup scene.  By offering access to an interconnected network of firms, rather than just a single firm, these joint ventures may also be more interesting partners for startups seeking financial and complementary resources.  READ THE FULL HBR ARTICLE ON HOW MID-SIZED COMPANIES CAN COMPETE IN AI HERE.

Russia remains one of the most interesting markets in Eastern Europe for foreign entrepreneurs because of its high market potential and low competition in many industries. On the other hand, speaking from the perspective of the Western world, Russia is a peculiar ecosystem in the economic and legal sense. Russia is not the EU, which means the rules for doing business are different.Saint Basil's Cathedral. Church in Red Square in Moscow, RussiaRussia exists under sanctions and pressure from the West. Russia has its own digital ecosystem - Google is not the main search engine, Facebook is not the main social network, and Amazon is not the main e-commerce platform. Despite this, we see that a significant number of global companies have expressed an interest in doing business both with Russia and with the entire Russian-speaking audience. And when you enter the Russian market (144 million people), your business automatically comes to the attention of 260 million Russian-speaking people around the world.Sales in Russia 2020The Economic Crisis and the consequences of the restrictions imposed in connection with the COVID-19 pandemic have had a significant impact on the development of trade in Russia:● Wholesale trade turnover increased by $3.6 billion in the Russian Federation in 2020 compared to 2019 and amounted to $1.1 trillion at the end of the year.● Retail turnover decreased by 4.1% in 2020 compared to 2019 and amounted to $454.8 billion. Retail sales of food products fell by 2.6% up to $222 billion, non - food products-by 5.2% up to $232.8 billion;● According to the Association of E-Commerce Companies, the volume of the Russian e-commerce market in 2020 increased by 58.5%, up to $43.3 billion, while its share in the total sales of the retail market amounted to 9.6%. Due to the pandemic, a drop of 25% was recorded in the cross-border model.Based on the results of 2020, e-commerce has become one of the most dynamic sectors in the Russian economy. It is worth mentioning that because of the pandemic and the imposition of restrictions in the Russian Federation, as well as around the world, different segments of the consumer market have been substantially transformed. In particular, the demand has dramatically transferred from physical stores to online merchants. The largest online hypermarkets and marketplaces have strengthened their leadership online, and many retailers have initiated active development within a multi-channel model of interaction with customers which were linked not only with the development of their own online stores and delivery, but also with the development of applications for mobile devices, cooperation with marketplaces, and development of joint projects with other retailers and service companies.E-commerce has become one of the most dynamic sectors in the Russian economy.Specificity of the Russian MarketRussia is ranked 28 in the Ease of Doing Business (The World Bank). The country holds a higher position in the following rating categories: Getting electricity (7), Registering property (12), Getting credit (25), Enforcing contracts (21), and Dealing with construction permits (26). Such conditions promote the development of entrepreneurship in Russia, including the influx of foreign trade operators.An important factor in the development of modern trade is the e-commerce segment. Russia holds the 25th position in The Inclusive Internet Index, having a positive impact on the e-commerce development in the country. In this regard, representatives of retail and wholesale sales should give special consideration to the company's presence on the Internet, in particular, to the adaptation of web resources into the Russian language.Hermitage, Palace Square, Saint Petersburg, RussiaRussia is a huge country, so logistics play a special role. Not only product delivery to the country should be considered, but also its transportation across Russia. In The Logistics Performance Index rating, Russia held only the 75th position, due to the low infrastructure quality assessment and complicated customs clearance, which is one of the barriers to foreign companies entering Russia. Another unfavorable factor is administrative barriers and complex legislation.Peculiarities of business promotion in RussiaThe first thing which should be considered to promote in the Russian market is the localization of advertising materials, web resources, and other content into the Russian language. It is not just the translation, but the processing of all materials in accordance with the Russian legislation, the peculiarities of the language, and the cultural characteristics of Russian consumers. For example, vulgarities, sex jokes, and the demonstration of losers in advertising are not relevant for a Russian consumer.Vulgarities, sex jokes, and the demonstration of losers in advertising are not relevant for a Russian consumer. Once I had a conversation with the Head of a New York representative office of a large network agency. He promoted Western FMCG products on the Russian market at the beginning of the ’90s. He noticed the high level of education of the Russian consumer. To increase sales of laundry powder in most developing countries, it is enough to show a funny dance and a happy family. The Russian consumer doesn’t believe such advertising messages. In Russia, commercials with tests and experiments, scientific facts proving the effectiveness of the product worked well.If you look at the whole world, you can distinguish four large digital ecosystems. The first one includes North and South America, Europe, and most of Asia: Google, Facebook, Apple, etc. Next, China, South Korea, and Russia stand apart with their own special ecosystems. The reasons for China are familiar to everyone - everything is blocked. The firewall simply keeps out Western media giants. There are no restrictions on Western services in Korea, but they are not popular there for political reasons. And only in Russia, there is real and fair competition between media giants. And, of course, this is because of the fundamental mathematical education (and as a result, a great many qualified programmers), that has been in Russia since the Soviet Union.Zhivopisnyy Most, Moscow, Russia In this connection, the second important factor to be taken into account when promoting is the Russian unique digital ecosystem, which includes Russian-language channels that are little known in foreign countries:● Yandex search engine and its services are the most popular in Russia (84.3 million users) and Google occupies the second position (82.4 million users in Russia, according to Mediascope research company for May 2021).● The most popular social network in Russia is VKontakte. More than 70 million Russian people use the social network every month. Another Russian social network, Odnoklassniki, with an audience of 42 million users is in the top three in Russia. Facebook ranks in only fifth position with an audience of 35.8 million users in Russia.Facebook ranks in only fifth position with an audience of 35.8 million users in Russia In the category of marketplaces in Russia, there are also players that are not represented in the world market. The top Russian trading platforms include AliExpress Russia, Yandex. Market, Ozon, Lamoda and Wildberries. The turnover of the largest companies on average increased by more than one and a half times over the year. Such growth has become a steady trend due to the increased competition and state policy aimed at business localization.For more information on doing business in Russia, we have launched a new platform - Centuro Connect, that dives into blueprint specifics helping you do your research all in one place. It is the ultimate tool for understanding market entry options, HR, Immigration, Legal Requirements, Tax & Accounting, and much more.EXPLORE THE PLATFORM