Company formation in Russia consists of several standard actions, such as drafting the articles of association, the specimen signatures and some other special forms provided bythe company registration office in Russia. Documents must be translated in Russian before submitted with the Russian Trade Register.
Company incorporation in Russia also requires a registered office, a bank account and a local accountant. All these activities must be completed in order to set up a company in Russia.
We invite you to watch a short video about company registration in Russia:
Types of business entities in Russia
Incorporating an OOO (limited liability company). The most popular form of business in Russia is the limited liability company (OOO-Obshchestvo s ogranichennoy otvetstvennostyu) established by maximum 50 shareholders, with a minimum share capital of 10.000rubles. If desired, a half of the share capital must be paid at registration and the other half in maximum three months from the incorporation.
The consent of the shareholders is not necessary when one of them wants to leave the entity. The general meeting of the Russian limited liability company is taking the major decisions, while the daily decisions are taken by the general director and, in certain cases, by a board of directors and an executive committee may be appointed.
For major investments, the Russian commercial law is stipulating that two forms of joint stock companies are available - the Russian open joint stock company (the shares are freely transferable to the public and the minimum share capital requested is 100.000 rubles) or the closed joint stock company (the shares are transferable only between the shareholders in the company and the requested minimum share capital is 10.000 rubles).
The major management decisions are taken by the general meeting and the general director and by the board of directors, if the company has more than 50 shareholders. The board of directors can be watched by a supervisory board also appointed by the general meeting of the shareholders.
For individuals.The sole ownership (individualnyi predprinimatel) doesn’t require a minimum share capital and it is the basic form of business in Russia. The founder is taking all the decisions necessary to the good function of the entity and can use the profits after submitting the personal tax income declaration to the tax authorities. A disadvantage of this business is the fact that, in case of liquidation, the personal assets of the owner can be used to cover the outstanding claims.
A general partnership in Russia is a form of business established between two or more corporate bodies or individuals with equal rights and liabilities in the entity. This form of business is based on a partnership agreement. In case of liquidation, the personal assets of the individuals can be used to cover the claims (when there are not sufficient funds to cover the claims from the entity’s goods). The capital of such business is declared in the entity’s agreement of incorporation and at least half of it must be paid by the time of contribution, while the other half must be paid by the time specified in the foundation agreement.
Another form of partnership is the limited partnership formed by two types of partners: general and limited. The general partner is fully liable for the company’s debts and profits, while the silent partner has the liability limited by its contributions to the partnership’s capital. During the partnership meetings, the major decisions are taken by the general partners.
Incorporation procedure in Russia
Preliminary actions.The first step of company registration in Russia consists in preparing the company’s documents of incorporation and notarizing the signature made in the registration application, process which takes around one week. The minimum share capital must be deposited in a bank account and a proof of deposit is obtained from the bank, necessary for the future steps of registration. Also a registration fee is paid and a receipt is received by the applicant.
After that, the applicant must deliver all the relevant documents to the unified register of the Federal Tax Service on the local level, in order to obtain the number of tax registration (identification number of taxpayer, INN) and the single number of state registration process which takes around seven days.
The last steps of company registration in Russia consists in notarizing the bank signature card, making a company seal (necessary for all the future transactions) and ask for opening a permanent bank account.
The whole process of company incorporation in Russia takes around 18 days, so the help from a specialized individual is advisable.
Economy overview in Russia
Russia is a powerful economy in Europe, but the crisis determined the foreign investments to drop here too. Anyhow, the Russian government encourages foreign investments and entrepreneurs who want to start a company in Russia. In 2008, the statistics of the Russian Economic Report from the World Bank showed that Russia received 18.9 billion EUR from foreign investments.
Things started to look up at the beginning of 2011, when the capital from foreign investors started to increase. Numerous projects and new companies began their activities and the gross domestic product is estimated to have been reached better numbers than the previous year. The main reason seems to be the increasing oil price.
Switzerland, Cyprus, UK and the Netherlands used to be high investors in Russia during the past years. The main industries that are quite attractive in Russia are services and industry from oil, gas, timber, machinery, chemicals, metals and farming to food, textile, furniture and energy production. Overall, Russia is one of the most important trading partners for all countries in Europe.
As far as the jobs are concerned, foreign companies started in Russia create on average 100-200 jobs per company. The employees are chosen among the Russian candidates or the foreign applicants. It is important to know that foreign employees must obtain a work permit before being hired in a Russian company.
For more information about opening of a company in Russia, you may contactour agents and our local lawyers. We can help you register companies in other countries, such as Turkey, and offer a wide range of legal services.
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As a BridgeWest client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Russia.