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Types of Russian Companies

Updated on Wednesday 22nd July 2020

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If a foreign investor decides to set up a company in Russia, he/she must choose between the types of companies available in Russia the proper entity for his/her business and interests. According to the Russian Company Law, there are several options when it comes to the available types of companies that can be set up in Russia. For each type of company in Russia, our company formation agents in Russia are at your disposal with in-depth information and assistance at the time of registration. We can handle the requirements in this sense, therefore, you may address your inquiries to our team of advisors.
 

How can I register a Russian limited liability company?

 
According to the legislation in Russia, at least one individual or legal entity needs to contribute to this type of company in Russia. If there are more than 50 shareholders, the Russian limited liability company must be transformed into an open joint stock company or a production cooperative. The minimum share capital needed for setting up a limited liability company is RUB 10,000. The capital is divided into participation interests that are not registered with the Russian Federal Securities Service.
 

How can I set up a Russian double liability company?

 
One or more persons can form this type of company in Russia. The liability is divided between the participants who bear in common the responsibility for the company’s obligations. When a shareholder is suspect of bankruptcy, his liability is distributed among the other members to the extent of their own contributions. Here is an infographic that explains more:
 
Main types of Russian companies 2.png
 

Opening a Russian joint stock company

 
In order to set up this type of company in Russia, it is necessary for the founders to provide a minimum share capital of  RUB 100,000. This capital is divided into shares. Open joint stock companies allow the shares to be transferred freely and can have an unlimited number of shareholders, while closed joint stock companies can only have their shares distributed among the members of the company.
 

Russian general partnership

 
In case two or more partners decide to set up a company that is co-owned, they will create a partnership. General partnerships have general partners who can be involved in the complete management of the company. They are all equally liable for the company’s obligations and are obliged by the actions of all the other partners involved.
 

What is a Russian limited partnership?

 
As opposed to the general partnership, this type of company in Russia must have at least one general partner with the right to manage the company and with full liability to the extent of his contribution. There must also be at least one limited partner who is not liable for the company’s obligations. Both types of partnerships are created on the foundation of an agreement signed by partners, where all rights and obligations of the partners are mentioned.
 
 

How can I set up a subsidiary in Russia?

 
A subsidiary in Russia can operate under the rules of the limited liability company, one of the most popular business structures among local and foreign entrepreneurs. The incorporation procedure of this type of company in Russia is a simple process which respects the regulations of the Civil Code and the Company Act in Russia. Among these, we mention the minimum share capital of RUB 10,000 which needs to be deposited in a Russian bank account. We remind that the registration procedure of your subsidiary in Russia starts with the Russian Company Registry.
 

Establishing a branch in Russia

 
A branch in Russia can be controlled under the rules of a public limited liability company where the liabilities are strictly related to the parent company. The State Chamber of Trade and Commerce in Russia is the institution that provides the necessary accreditation and approvals for foreign companies willing to set up branches in Russia. It is good to know that there is no need for a minimum share capital, as the initial capital is submitted by the foreign company willing to set up a branch in Russia. Just like for all types of companies, a series of documents need to be prepared at the time a branch is registered in Russia. Among these, the certificate of registration, the decision of opening a branch, the foundation deeds, the certificate of good standing or an extract showing where the foreign company is incorporated are of high importance. A branch in Russia cannot be established without an appointed representative with a power of attorney and without notarizing all the above-mentioned documents. A branch in Russia is subject to varied taxes for which a tax identification number is necessary. The next step in establishing a branch in Russia is to register with the state pension fund, medical insurance fund, and social security.
 

What is the Russian Trade Register's mission?

 

The Trade Register in Russia is actually known as the State Registration Chamber. This institution falls under the regulations of the Ministry of Justice in Russia. The Russian Trade Register or State Registration Chamber deals with company registration of different types of companies in Russia. This procedure is mandatory for both Russian and foreign companies that are set up on the Russian territory. In some cases, an accreditation might be needed for starting the commercial activity. The State Registration Chamber in Russia has three headquarters.
 
The Administration and General Services Department manages the administrative issues of the Russian State Registration Chamber. The second sector is called the Organization and Supervision Department and it deals with personnel support in all matters regarding labor supervision and social security for employees of the Chamber. This department is also responsible for registration and safekeeping of documents that are received at the State Registration Chamber. As far as the third sector is concerned, the Accreditation and Visa Support Department handles the necessary documents for company incorporation in Russia. It also deals with the visas for foreign employees who come to work in Russia.
 

The functions of the Register Chamber in Russia

 

The Trade Register handles the Register of Commercial Organizations for different types of companies in Russia with foreign investments, companies in the gas and energy domain and all foreign investments that exceed 100 million rubles. Its main functions are the following:
  • it offers accreditation to branch and representative offices in Russia. The accreditation is very useful when it comes to opening a bank account in Russia, the registration for taxes and with the customs authorities. The accreditation also authorizes the company to open an office in Russia.
  •  it preserves and updates the Uniform State Register of foreign entities;
  •  it records and updates Russian companies with investments abroad;
  •  it keeps records on international agreements and economic collaboration with foreign authorities;
  •  does research work in order to improve the database of the register;
  •  conducts publishing operations;
  •  makes sure all accreditations are given according to the legislation of the Russian Federation.
The Registration Chamber created a guide for investors called the Handbook of Foreign Investment, which serves as a guide through the Russian legislation and offers precious information on how to get a quick access to the Russian market. The handbook also offers pointers about the types of Russian companies, the documentation required to register a company and the taxes legal entities must pay. The handbook is written in both Russian and English.
 

Shelf companies in Russia

 
There are often cases in which a foreign investor decides to purchase a ready-made company instead of establishing a new one from scratch. In this case, a shelf company presents a series of advantages like no imposed formalities and starting the business in a fast manner, as soon as the ownership transfer was concluded. A ready-made company in Russia runs as a private joint stock company or as a limited liability company, the latter one being the most popular business structure in Russia. Once you decide for acquiring a shelf company in Russia you should expect to receive the seal of the company, the certificate of incorporation, documents showing the address of the firm and a license for your future operations on the market. We remind that you can talk to our specialists and find out all the details involved in purchasing a ready-made company in Russia.
 

What is a holding company in Russia?

 
A holding company in Russia has a single purpose and that is to control the assets and the management of other companies, in compliance with the part of the shares acquired. The operating holding companies and the pure holding companies in Russia are two entities often chosen by foreign investors. There are several attributes for each type of holding company, like owning the voting rights and shares in a company for business management, as a pure holding company. The same thing is available for operating holding companies, with the mention that this entity can also have its own business activity. Improved distribution of cash flow and receiving royalties by owning a company’s intellectual property rights are two important benefits of a holding company in Russia
 

Opening a SPV/SPE company in Russia

 
The special purpose vehicle/entity or SPV/SPE is the legal entity that addresses to those kinds of companies who want to activate on the Russian market as a subsidiary with the mention that this entity benefits from complete security regarding the assets. This means that the assets of an SPV/SPE are completely protected from the cases in which the parent company declares its bankruptcy. Just like a subsidiary, an SPV/SPE in Russia is established as a limited liability company or as a joint stock company where the Articles of Association and Foundation Deeds represent important documents at the time of registration with the authorities in charge. According to the Russian Securitization Law, an SPV/SPE can be established as a special purpose financial company or as a special purpose project financing company, the latter one being used for infrastructural bonds and long-term investments with a minimum of three years.
 
Establishing any type of company in Russia means taking advantage of a powerful economy and solid investment and financial center that competes with influential countries like China and USA. Regardless of the chosen entity for business in Russia, we suggest you address to our team of consultants and even solicit legal assistance from our local lawyers in Russia, in order to understand better the regulations for opening a company in Russia. Feel free to ask us about how to open a private limited liability company, a general partnership, a foundation or a sole proprietorship in Russia.
 

The Articles of Association for your company in Russia

 
No matter the type of company you want to register and develop in Russia, the Articles of Association will represent the main documents that comprise the following information:
 
  • • the name of the company, of the owners, and the business address;
  • • the purpose of the company is also mentioned in these important documents;
  • • the share capital and the contribution of each member are stipulated in the Articles of Association;
  • • information about the organization of the company (founders, managers, etc.) is found in this document.
 
For knowing better how these documents need to be prepared at the time of company formation in Russia, it is best to talk to one of our representatives in the chosen city for business. Also, if you need more information about the types of companies you can set up in Russia, you may contact our company formation agents in Russia.

 

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