Coining it in on cross-border shopping
Sales and VAT exemption make shopping in Kirkenes a lucrative business for Russians living close to the border.
Season sales, special offers and the fact that Russians do not have to pay VAT on goods bought in Norway have made retail shopping in the border area soar. Some Russians have even made a living out of shopping in Norway, a new master’s thesis on cross-border trade show.
Harald Sørensen and Eivind Tvedt from Kirkenes have written the study on shopping in the border area at the University of Nordland.
“We met several Russians who said they earn so much on shopping in Kirkenes that they had quit their job. They travel to Kirkenes, shop for between 20.000 and 40.000 NOK on sales, get the VAT in refund and sell the goods through social media. The goods bought in Kirkenes are being sold all over Russia”, Tvedt says to Sør-Varanger Avis.
The most popular goods among Russian shoppers are coffee, tea, diapers, clothes and sportswear.
The softened visa regime between Norway and Russia has correspondingly been a treasure trove for shop owners on the Norwegian side of the border. Last year Russians shopped for some 130 million NOK (€15,4 million) on the Norwegian side of the border. And this is only retail sales. Russians stand for 15 percent of the retail shopping in Sør-Varanger municipality. In certain shops they account for as much as 60-70 percent.
Retail sales in Sør-Varanger municipality rose 20 percent from 2008 to 2012 - from 1 billion NOK to 1,2 billion NOK (from €118 to €141 million), according to numbers from Statistics Norway. This was the largest increase in the whole of Finnmark county.
According to Sørensen and Tvedt, Norwegians left some 12,5 million NOK (€1,5 million) in shops in Russia. This number will certainly rise when the new border crossing station is up and running, they believe.