Open a company in Forestry in Russia

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Russia is home to one of the world’s largest wood reserves. Its forest land totaled around 1,185 million hectares in 2017, with 67% of it covered with growing stock.

Despite its vast reserves, Russia ranks only fifth globally in timber harvesting.

Factors behind low timber harvesting volumes include extensive forest exploitation practices that result in the depletion of forest resources.

Currently, Russia is seeing a gradual shift to intensive forest exploitation practices as resource scarcity has become an industry-wide concern.

According to the Russian Export Center, forest sector exports are projected to in crease most to

CIS countries(Kazakhstan, Azerbaijan, Uzbekistan and Belarus),

Germany,

Italy,

Saudi Arabia

India.

The woodworking industry ranks first with forecast exports of up to US$4.5 billion, followed by the paper industry with US$1.1 billion to USD$3.6 billion and the chemical pulp industrywith US$0.6 billion to US$1.7 billion, which can be largely attributed to strongdemand from China.

Our lawyers in Russia can assist foreign investors interested in starting a forestry business here.

Russia Forest Code

The Forest Code is the main law governing the management and exploitation of woods in Russia.

Those interested in opening a Russian company in the forestry industry must comply with the regulations imposed by the Code.

The Russian Forest Law provides for the following type of woods:

  • reserve forests;
  • protection forests;
  • production forests.

The law also provides three types of ownership of forests in the Russian Federation:

  • the right to use a land plot for a definite period of time, which is called easement;
  • the right to permanently use a forest land plot;
  • the right to use a parcel during certain periods of the year.

Our Russian lawyers can offer more information on the Forest Law.

Registering a forestry company in Russia

The registration procedure for a forestry business in Russia will be the same as for other types of companies.

Following that, the company will need to obtain a procurement order to engage in activities related to the cutting of trees and production of timber or other wood products.

Russian companies are also allowed to build facilities used for the processing of wood.

However, these are not the only activities a forestry company can carry out in Russia.

We will describe some of them:

  • agricultural operations;
  • cultivating certain species of medicinal plants;
  • game hunting;
  • exploitation of mineral resources;
  • produce wood-based goods for export activities.

Russian tax laws

Russian tax laws

Tax Code introducing the following federal payments:

  • Environmental tax;
  • Recycling fee;
  • Federal road fee;
  • Tax on public communication network operators;
  • plus one local tax: Hotel fee

The forestry industry offers many investment opportunities and if you want to create a company in this sector we invite you to contact our law firm in Russia for assistance.

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