How to start a business

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Business in Russia
How to start a business in Russia

Let us begin with the 1st case of open company in Russia – setting up a new legal entity. Current legislation allows foreigners to open a joint-stock company (JSC) or limited liability company (LLC) in Russia, besides, a foreigner may become a sole proprietor, and that results in a simplified taxation procedure. Among the crucial features of JSC and LLC is the following one: during the registration process (JSC or LLC) in Russia a foreigner may stay abroad, residence is not required, like for an individual. At that, a foreigner must have legal documents confirming residence in Russia.

Here is another crucial feature – first foreigners must get work permits in the Russian Federation if they intend to take the director positions in their own companies. No additional permissions are required if a director is from the EEU countries.

private entrepreneur and LLC also differ in terms of responsibility to partners and creditors, a private entrepreneur is responsible with personal assets, but as for a company – responsibility is limited with the amount of shares owned. Small and medium companies are also offered a simplified taxation system.

Those starting their own company in Russia should:

  • Ensure a legal address in the country;
  • Minimum authorized capital must be at least RUB 10,000;
  • Have an official director and accountant;
  • When a registration is completed, and a company is added to the State Register, a foreigner receives documents confirming the fact of registration.

When submitting documents for registration, it is crucial to add a certified translation of personal documents of foreign investors and statutory documents of a company from abroad, if this company acts as a founder.

The following actions have to be done to open a new company:

  • Fill out a standard application form for open a company;
  • Provide documents confirming your payment of a state fee for open a company;
  • Submit the copies of documents for shareholders (plus translation and notarization; official documents are to be legalized in the country of their issuance) for open a company.
  • Provide documents allowing the Russian residence (in case if a foreigner is a sole proprietor, or will be a director) for open a company.

Buying company shares or registering a joint venture in Russia

Those interested in  opening a company in Russia  have another option – to buy a stake in an existing company or to act as a co-founder (with local citizens). If a foreigner acts as a co-founder in a new company , the registration process goes same way as the registration of a new company described earlier. Here, one also needs a legal address , and collects the documents of all founders , pay a state fee , and provide the authorized capital for a new company .If the documents are in a foreign language, they must be translated into Russian and certified .

simplified taxation system is applied for those companies where the foreign capital is less than 24%.

The list of documents necessary to set up a JSC in the Russian Federation is the following:

  • completed application form , indicating the business legal status;
  • copies of documents of all founders and directors;
  • specified authorized capital ;
  • selected taxation system.

After completing the registration, a new company is added to the State Register in Russia .

Open a branch / representative office in Russia

Representative office or a branch is the final option of  opening company in Russia . Both these entities are local divisions of a parent company , but not individual companies. Thus, on behalf of a parent company , they can conduct business , sign contracts and receive profit , which can then be taken abroad (the scheme is much simpler than in the case of a separate LLC ). A representative office is a structure that can perform the same functions: advertising ,search for partners, work with potential clients , but a representative office is not involved in commercial activities , and it is the main limitation . A branch has more powers. It can perform representative functions in the territory of its registration; besides, they can conduct commercial activities.

Both of these are non-residents , therefore the taxation system applied is regulated by international agreements.

Those interested in opening company in Russia, and those who have chosen to open a branch must do the following things:

  • Collect documents of a parent company ;
  • Pass accreditation , this will take about 1 month;
  • Obtain a work permit for all foreign employees;
  • Register with the Pension Fund , Social Insurance Fund, and Rosstat ;
  • Provide documents confirming the fact that state fees are paid (120,000 rubles). 

Many foreign companies, especially large ones, choose this form because of several advantages. First of all, due to simplified schemes for depositing / withdrawing funds, property transfers, which take place directly, in contrast to the situation with a separate company, for example, LLC in Russia.

branch also must have a legal address in Russia , and every foreign employee, including all directors, must first obtain work permits for Russia .

As a rule, it will take about 30-45 days to open a branch, if everything is done on time and correctly.

Register by yourself or seek the support of professional lawyers in Russia?

Whichever method you choose, you will have to do some preparatory work, i.e. collect documents, obtain permits for future employees, find a suitable legal address, etc. Besides, you should choose the organizational form, the one that is optimal for your case, taking into account the taxation system, currency control rules, etc., and for this, you need at least some minimal knowledge in this area. In short, you need a qualified lawyer in Russia.

For large companies, it is not a problem, since they have quite a lot of specialists on their staff, but for small firms, opening company in Russia it is a quite challenging issue. VALEN consulting company provides support for these companies.

Our experts in Russia are ready to provide comprehensive support for foreign entrepreneurs and businesses, they will help you at all stages, from a preliminary assessment of the situation and choosing the best solution to obtaining all the necessary registration documents and getting started.

By seeking legal advice, you will receive the following guarantees: the result will be achieved within a certain period, and any issue will be resolved as quickly and efficiently as possible, and all this for reasonable money. Besides, you will protect yourself from possible risks and mistakes in opening company in Russia, which can turn out to negative consequences.

Folow us on Youtube channel – Opening company in Russia

Related: Open a llc company in Russia

Get help starting your business.

The best way for a foreigner to start a business in Russia is to register a company.

The procedure for setting up a business in Russia has been actively simplified by the government.

Today the process usually takes just three days and is not significantly different for a foreigner compared to a Russian citizen.

Founding a Limited Liability Company (LLC) is considered the most convenient form of business activity.

You need to fill the application form. Foreign nationals need to provide a notarized passport translation.

The validity of your signature on the application form should be notarized, after that it should be submitted to the relevant tax body.

You will require a legal address, a charter, and a minimum starting capital of 10,000 rubles (120 EURO).

You should also specify a general director of the LLC (this might be a foreign national with work permit) and be ready to regularly prepare and submit monthly accounting reports. Then it is possible to set up a bank account for the company.

There are many advantages of this type of business:

  • easier to borrow large amounts from banks;
  • easier to work with contractors;
  • private investors can enter the business;
  • LLC can be subject to 6 (six) percent tax.

Folow us on Youtube channel – Opening company in Russia

Related: Open a llc company in Russia

Get help starting your business.

Open a Company in Russia
Open a Company in Russia
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