The Law 1999 on Foreign Investments regulates the establishment and operations of the branches in Russia.
The Russian branches
are chosen by the companies which prospect the Russian market before taking the decision of opening a limited liability company or a public limited liability company
. The liability for the branch
’s actions belongs to the foreign company and the branch
can take very few decisions without the consent of it. One of our company formation agents in Russia
can give complete support and assistance for opening a branch in Russia
All the documents must be notarized and legalized in the country of origin and accompanied by a notarized Russian translation. After accreditation, the Russian branch must register with the Tax authorities, State Committee for Statistics, pension fund, social security fund and Obligatory Medical Insurance fund. No minimal share capital is requested for establishing a branch in Russia. The initial capital is delivered by the foreign company along with the assets. The management of a Russian branch is assured by a representative vested by the foreign company with powers granted by the power of attorney.
Post branch registration formalities in Russia
Once the branch registration process
has been completed, the company owner receives a series of certificates (PSRN, TIN, etc.), a notice of registration issued by the Pension Fund in Russia
and one from the Social Insurance Fund, plus an information letter from the Chief Interregional Center of the Federal State Statistics Service in Russia. The company seal, the decision of minutes, plus other documents will be delivered at the time the branch is established in Russia. All the formalities for branch registration in Russia
can be handled by one of our company formation specialists in Russia
Who can establish branches in Russia in 2021?
Foreign company owners interested in doing business in Russia
in 2021 can think of establishing their operations under the rules of a branch. We remind that for having a branch in Russia
, a limited liability company needs to be registered. The minimum share capital for opening an OOO or LTD in Russia
is set at RUB 10,000 which needs to be deposited in a local bank account. It is good to know that at least one shareholder can open a limited liability company in Russia
Business sectors for branches in Russia
The appealing business sectors of Russia allow foreign investors to set up any kind of operations as long as they respect the applicable laws. Most of the branches in Russia are found in the banking sector, IT, insurance, logistics, mining, agriculture, import & export, and many more. For more details about the types of investments in Russia, you can talk to one of our specialists.
Advantages of branches in Russia
Even if branches do not benefit from a level of independence as it is the case of subsidiaries, there are other kinds of benefits. For instance, Russian branch offices pay taxes only for the incomes generated in the country of establishment. More than that, branches registered in Russia are protected by the provisions of the double taxation treaties signed by Russia with a large number of states.
Are there any office facilities for branches in Russia?
Yes, foreign entrepreneurs can choose between a traditional office and a virtual one for their branches in Russia
, depending on the business needs in this country, mentioning that a virtual office is a temporary solution. The difference between these two refers to the costs involved, meaning that a virtual office in Russia
is subject to low expenditures. As for the facilities of a virtual office in Russia, we mention a prestigious business address, mail collection, a virtual assistant, the use of meeting rooms, collection of bank statements and many more.
Differences between branches and subsidiaries in Russia
The main difference between branches and subsidiaries in Russia
is the level of independence of each entity. Branches are completely dependent on the parent company, while a subsidiary has full independence that allows other activities too. In terms of taxation, subsidiaries are obliged to register for all tax purposes and submit the annual financial statements, while branches need to pay the taxes imposed only on the incomes generated in Russia. As for common advantages, both branches and subsidiaries are protected by the double taxation treaties signed by Russia
Tax requirements for branches in Russia in 2021
The Russian law clearly stipulates that branches in Russia must respect a series of accounting requirements, such as bookkeeping, the submission of the annual financial statements, audits, financial reporting and many more. If you consider externalizing the accounting services for your branch in Russia, feel free to talk to one of our specialists in Russia and ask for support. Feel free to discuss all the aspects about opening branches in Russia in 2021 with our specialists.
Why make investments in Russia
Russia is a representative business destination and a very appreciated financial center among international players. The legislation related to foreign investments in Russia
is extremely favorable to overseas investors who enjoy the same regime and business advantages as the domestic ones. Except for the mining activities, the military sector, and the aerospace field in Russia, all industries are open to foreign investments. The real estate sector, the automotive, the manufacturing field, the pharmaceutical sector, construction and IT are among the preferred fields for foreign investors. Here are some interesting facts and figures about the economy and business in Russia
- The total FDI stock for 2019 was around USD 464 billion;
- Russia ranked 28th out of 190 economies in the world, according to the 2020 Doing Business report;
- The Netherlands, Cyprus, Ireland, Bermuda, and the Bahamas are the main investors in Russia;
- Most of the FDIs are directed to the extractive industry, energy, manufacturing, insurance, and real estate.