Russia is considered one of the most influent economic powers of the world, and for this reason, there are many foreign companies which choose to open subsidiaries here. A
subsidiary established in Russia is a
Russian company where a majority of capital or shares with voting rights are owned by a foreign legal entity. The liability of the shareholders of this type of business is limited by the contribution to the capital. For a proper perception of how a
subsidiary can be established in Russia, we invite you to contact our
team of company formation agents in Russia. We can manage the
registration process of your company in Russia, regardless of the chosen structure.
Incentives for Russian subsidiaries
Numerous incentives are offered for the subsidiaries, especially financial exemptions, due to the vast network of treaties signed by Russia over the years. For example, the withholding taxes on dividends, interests or royalties paid to a company from a country with a signed treaty are minimized or abolished. The profits are taxed only in the country of origin or, if they are paid, the amount is refunded. The main regulations of the subsidiaries opened in Russia are given by the Civil Code of the Russian Federation. Also, we are at your disposal with information and assistance about how to establish a subsidiary in Russia.
How can I open a subsidiary in Russia?
A
foreign investor can incorporate a
subsidiary in Russia in the form of a
private limited liability company and the
public limited liability company, open or closed. The
limited liability company can be founded by one or more shareholders (maximum 50), with a minimum share capital of RUB 10,000. Half of the minimum share capital must be deposited in a bank account before the registration is done, and the other half in a maximum of three months from the date of incorporation. You should also consider the following steps in a
subsidiary formation in Russia:
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• the management is assured by a board of directors and an executive committee, appointed by the general meeting of the shareholders;
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• the capital of such company is divided into non-transferable shares;
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• the liability of the shareholders is determined by their contribution to the capital;
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•
a
subsidiary needs to be registered with the
tax authorities in Russia.
Subsidiaries registered as joint stock companies in Russia
There are two types of joint stock companies that can be registered in Russia: open - when the shares are freely transferable to the public, or closed - when the shares are transferable only between the shareholders in the company. An opened joint stock company is based on a minimum share capital of RUB 100,000 while RUB 10,000 represents the minimum share capital which must be deposited by the closed joint stock company. The management is assured by the general manager, but if the company has more than 50 shareholders, a board of directors must be appointed. Also, a supervisory board can be appointed, but it’s not mandatory.
How is the registration process of a subsidiary in Russia?
- • notarizing the foundation deeds, and depositing the minimum share capital in a bank account;
- • registering for the single number of state registration and the number of tax identification from the Federal Tax Service;
- • notarizing the bank signature card and making a seal for opening the permanent bank account;
- • informing the Federal Tax Service regarding the opening of the bank account;
- • registering at the Moscow Center of Quotation of Work Places.
Only if the above steps are taken, the company may do business in Russia.
Who can open subsidiaries in Russia?
All medium and large companies from overseas can easily
establish subsidiaries in Russia, in respect with the
Company Act and other business-related sets of laws in this country. We remind that foreigners have the same business rights as the Russians and can also benefit from a series of incentives provided by the government.
What are the necessary documents for opening a subsidiary in Russia?
With complete support offered by our
team of company incorporation consultants in Russia, a
subsidiary is registered with documents like the Articles of Association (in a notarized form), the declaration provided by the foreign company which intends to
open a subsidiary in Russia, statutory documents, and the registration application form. The
Russian Trade Register is in charge of
subsidiary incorporation in Russia.
Choosing between subsidiaries and branches in Russia
Both domestic and international entrepreneurs have the same business rights in Russia, however, they need to choose the proper entity that suits most their needs and activities they want to develop. In this case, it is recommended to understand in the first place the differences, the
advantages and disadvantages of branches and subsidiaries in Russia. For example, a branch will completely depend on the parent company, compared to the subsidiary which is 100% independent. In matters of registration costs, branches are more expensive compared to subsidiaries. Also, there are restrictions when it comes to licenses and permits, meaning that branches cannot perform specific operations, a matter where subsidiaries are advantageous. A branch will only have to develop the specific activities as established by the foreign company, while the
subsidiary in Russia is free to change the operations or add new ones if it is the case. As for the taxation of these entities, the profits of subsidiaries are protected by the
double taxation treaties signed by Russia with countries worldwide, while branches will only pay the taxes imposed on the incomes registered in Russia. Subsidiaries are flexible business forms with lots of benefits, and the possibility of activating in numerous industries in Russia. The incorporation is not complex and it can be done with the help of a single shareholder or more. Do not hesitate to ask for more details about each entity, if you need recommendations in terms of business and
company registration of a branch or a subsidiary in Russia. Our support can be immediately offered to foreign investors, alongside legal advice provided by our local team of attorneys in Russia.
Accounting services for subsidiaries in Russia
Subsidiaries might seem complicated from a taxation point of view, but instead of dealing with such aspects, you can decide on the services of an
accounting firm in Russia. This is in many cases the ideal choice of foreign entrepreneurs in Russia instead of creating a whole new accounting department. Tax registration and reporting, tax planning, payroll services, audits, annual financial statements, tax management and tax minimization methods are part of the accounting services we can provide for your
subsidiary in Russia, if you decide on hiring us.
Foreign companies can easily establish their operations in Russia, but above all, it is highly recommended to align with the requirements in terms of taxation and reporting. This is where the support of our experts will play a major role in all financial aspects of the firm, organizing a professional tax reporting and accounting in respect with the applicable laws.
The advantages of subsidiaries in Russia
Subsidiaries in Russia are separate legal entities and are not limited in matters of business licenses and can apply in agreement with the applicable laws. The double taxation treaties signed by Russia with different countries worldwide apply to all subsidiaries in Russia in terms of taxation. It is good to know that the registration process of a subsidiary in Russia is not time-consuming or bureaucratic, letting the foreign companies establish their operations rapidly.
Why choose us for opening a subsidiary in Russia
Our company formation specialists in Russia have enough experience to support international investors on their way of settling the activities from abroad. Many entrepreneurs from abroad have chosen our services and relied on the complete support for company registration with the entitled authorities. A foreign businessman might not be familiarized with the local rules and regulations in matters of company formation and incorporation which is why the assistance and the help of our company formation representatives in Russia might be crucial. Instead of dealing with all sorts of errors or misapprehensions when opening a subsidiary or any business structure in Russia, international investors can rely on the assistance, experience, knowledge and correct approach provided by our team of consultants. Our company formation services in Russia are varied and at the disposal of anyone wanting to open a subsidiary in Russia with fewer formalities or stress in terms of incorporation.
Those who want to know more about the
investments and business in Russia might find interesting the following information:
- UK, the Netherlands, Ireland, Bermuda and Cyprus are the main investors of Russia.
- Approximately $13,332 million represent the FDI flow registered in Russia last year.
- Russia ranks 31st out of 190 worldwide economies, according to the “2019 Doing Business Report”.
- Oil, gas and metals are Russia’s main resources which can be exploited by international companies.
- Mining and manufacturing are the main industries where the international investments are directed.
- More than 70% of the costs in the research and development sector can be deductible in Russia.
There are no complicated bureaucracies when
setting up a company in Russia, whether a
branch or a subsidiary. If you want to
register a subsidiary in Russia, you may
contact our
Russian company formation agents who will provide you with all the information you need and will help you with the registration procedure.