City Guide: St. Petersburg

Peter the Great's window to the West has reopened for business. St. Petersburg, the former capital of the Russian empire, was envisaged as a major business center from its birth. Younger than New York, the city was founded in 1703 by Tsar Peter the Great as Russia’s “window to the West,” his intention being to provide his landlocked country with a maritime trading center to rival his beloved Amsterdam, the city upon which he modeled his new creation.

St. Petersburg’s opulent architecture, with its granite-fronted rivers and canals, palaces and mansions, is ample evidence of the success of the tsar’s grand design. The city thrived until the Bolshevik Revolution of 1917, and it remains the sixth-largest city in Europe by population. Seventy years of isolation behind the Iron Curtain, however, along with the shifting of the capital to Moscow, have done much to eradicate St. Petersburg’s status as a commercial powerhouse. Only since former president Gorbachev’s perestroika has the city begun to reestablish itself as a place to do business—that process greatly helped along by the overwhelming number of St. Petersburgers currently in the Russian government, including Prime Minister Vladimir Putin and President Dmitry Medvedev.

“St. Petersburg is now one of the most vibrant, active and investor-friendly cities in Russia,” says Heidi McCormack, a director at the American Chamber of Commerce in Russia (AmCham, amcham.ru) and the executive director of GM Russia, which recently completed the construction of a car plant in St. Petersburg. “If we look at the automotive industry, for example, St. Petersburg is the Detroit of the North—GM,Toyota, Ford and Nissan, just to name a few, have already opened plants here or are in the process of doing so.”

But all those decades of communist rule and the constraints of a planned economy can make the going tough. “Yes, it’s hard,” says Steve Wayne, a member of the executive committee of AmCham’s St. Petersburg branch and the CEO of Jensen Group, one of the city’s largest real estate firms, which he founded in 1991. And, he adds, it’s an expensive place: “It costs more to get a good lawyer, to get a good accountant; there is much less to choose from in the way of services.” Even so, he’s far from pessimistic about doing business in St. Petersburg. “You have to remember what this city has been through and how far it’s already come in the space of just a few years.”

Wayne is also keen to point out that many of the old stereotypes no longer hold true, such as the idea that dealmaking here involves the consumption of vast quantities of vodka. “You underestimate the sophistication of the Russians at your peril. There is still a certain amount of drinking,” he says, “but it’s not what it was.”

Glenn Kolleeny, senior partner in the St. Petersburg practice of international law firm Salans and a member of the executive committee of the St. Petersburg International Business Association (spiba.ru), concurs. A New Yorker who has lived in St. Petersburg for more than 10 years, having first visited as a student in 1975, Kolleeny has been ideally placed to see the business culture change. “Russian often do business over lunch, sometimes even dinner, but vodka drinking has decreased a lot, and it’s no longer common in business circles.”

In St. Petersburg, the harsh northern climate must be taken into account when it comes to business practices. Foreigners who work in the city note that, largely due to the darkness in the winter and the all-night sun in the summer, the workday tends to start very late, so you can expect work-related calls well into the evening. Unsurprisingly, locals tend to make the most of their short summer, so it can be difficult to get anything done during that season, particularly in August.

Kolleeny notes that the etiquette of doing business in St. Petersburg has also changed over the years. “Unfortunately, people are more and more likely to be late for meetings on a regular basis. There’s always a ready excuse: probki, the Russian word for a traffic jam, which [is] a real menace in the city.” McCormack agrees. “It’s not unheard-of for someone to be an hour late. Ten to 15 minutes isn’t even perceived as being late,” she says.

Like Wayne, McCormack stresses the advances that St. Petersburgers have made in their business culture since the fall of the Soviet Union. “It’s rare these days that you’ll have a ‘socialist’ or ‘Soviet’ experience where you run up against a wall of completely different cultures, goals and approaches. Russians are very savvy and relatively straightforward.”

Russia—particularly under the Soviets—has been known for its monumental, bribe-hungry bureaucracy. But even that aspect of life has changed, particularly in St. Petersburg, McCormack says. “St. Petersburg is part of Russia, and Russia is Russia,” she admits. “There is bureaucracy, and there are still hurdles and hoops to jump through, but the atmosphere has certainly improved steadily over the past few years, and the local government has made it a priority to turn the city into an easy and inviting place to do business.”

Kolleeny advises a tough approach. “The bureaucracy is very difficult to deal with. It’s important not to give in to requests for bribes and kickbacks—they will come back to haunt you.” He is also quick to dismiss another recurring myth about St. Petersburg, a city that was dubbed the Capital of Crime in the early 1990s after a series of high-profile contract killings. “There really is only very limited crime now, and if you avoid dealing with criminals in the business context, there is very little to worry about. That’s also true on a general day-to-day level—you can walk almost anywhere in the center at any time of the day or night, and the biggest risk is probably from pickpockets.”

Take some time out

Set on a network of waterways and islands in the delta of the Neva River, St. Petersburg is often referred to by locals as a “city-museum” or a “museum under the open sky.” Both nicknames highlight its stunning historic architecture and its wealth of museums. First and foremost among them is the State Hermitage Museum (hermitagemuseum.org), one of the world’s largest and oldest museums, founded in 1764 by Catherine the Great. It includes the Winter Palace (the former home of the Russian tsars) and five other buildings on the Palace Embankment. The museum’s spectacular imperial interiors are as much of an attraction as the exhibits themselves, but be warned: With three million–plus works on exhibit in its collection, this unique institution may well require more than one visit.

It’s well worth taking a stroll around the historic center of the city that surrounds the Hermitage. The incredible architecture and urban landscape here are distinguished by the relatively flat horizon. This is no accident: Local law prevents any construction higher than the gables of the Hermitage. This unusual city landscape makes stopping for coffee at one of the rooftop cafés or restaurants dotting the city very special.

During the summer, a boat trip along the multitude of rivers and canals that interlace St. Petersburg is highly recommended. Departure points can easily be found where the waterways intersect with the city’s main thoroughfare, Nevsky Prospect. Take a hydrofoil from in front of the Hermitage, out into the Finnish Gulf and across to Peterhof, Peter the Great’s former palatial country residence.

In the evening, look for the Mariinsky Theatre, formerly the Kirov (mariinsky.ru). Under the baton of its chief conductor and artistic director, Valery Gergiev, the Mariinsky is experiencing something of a renaissance, with its re-creations of classic pre-Revolutionary productions such as Swan Lake proving particularly popular.

TOBIN AUBER is the editor of the St. Petersburg Times, the city’s English-language newspaper.