Company Act in Russia

A foreign investor who arrives in Russia to set up a company must understand the rules stipulated by the Company Act in Russia. This set of regulations applies to all companies available in Russia. Regional entrepreneurs or from abroad must select the type of company that best suits their welfares and the future commercial actions on the market.

According to the Civil Code of the Russian Federation, the most famous business structures selected by foreign investors are the limited liability company and the joint-stock company. The Company Act in Russia also mentions general and limited partnerships. All companies in Russia must not break the Russian law, both inactivity and registration practices.

The limited liability company(LLC) or the Russian OOO, as it is known, is an appropriate business establishment that both national and foreign entrepreneurs can specify with a minimum share capital of RUB 10,000 deposited in a Russian bank account. According to the Company Act, a Russian OOO can be registered by at least one shareholder and no more than 50.

One of Russia’s most flexible and straightforward forms of business is the sole proprietorship, which addresses little entrepreneurs who will act as self-employed. Foreigners who want to be sole traders in Russia must acquire a residence in Russia. The subsequent documents are necessary for opening a sole proprietorship in Russia:

• identification documents certifying the country of residence of the entrepreneur;

• the records that show the entrepreneur lives in Russia;

a copy of the criminal record from the home country;

• the evidence that the state duty has been paid in Russia.

As soon as the Trade Register in Russia takes the documents mentioned above, the sole proprietorship is recorded for business in this country. 

We can also provide you with accounting services in Russia. 

The Labor Law in Russia runs hand in hand with the Company Act in Russia, and it is the second most significant for foreign investors. The Labor Law descends under the regulations of the Labour Code of the Russian Federation from 2006. The Employment Law in Russia mentions both duties and obligations of the employer and the employee. According to Russian legislation, the connection between an employer and an employee is stated by an engagement contract that has to be signed by both parties. The labor legislation in Russia takes care of a wide range of aspects, from working hours and discrimination to data protection, work conditions, and security.

Subsidiaries are separate legal structures that owners of large companies generally choose due to the elements that align with the business requirements and needs. A subsidiary can be established as a limited liability company and a deposit of RUB 10,000 as the minimum share capital. Still related to the rules of subsidiaries in Russia, it is good to mention that an administrative committee and a board of directors must be appointed. Plus, registration for tax pursuits is mandatory for subsidiaries in Russia.

There is furthermore the possibility of creating a joint-stock company. The subsidiary can run its activities in Russia, whether open for a minimum share capital of RUB 100,000 or closed for RUB 10,000. According to the Company Act in Russia, the registration of a subsidiary starts with submitting the foundation deeds and the registration with the Moscow Center of Quotation of Work Places. 

If you would like to establish a subsidiary in Russia and need assistance and support, our team can assist you.

Branches in Russia are controlled by the Law 1999 on Foreign Investments, plus the Company Act. This dependent system must report all the financial operations, plus other essential activities, to the parent company from abroad. One of the numerous crucial rules for registering a branch in Russia refers to the accreditation given by the State Chamber of Registration in Russia. The parent enterprise registration certificate from overseas, the declaration of opening a branch in Russia, and other specific financial documents must be submitted to the entitled registration authorities. The process of registering an extension in Russia might seem difficult to foreigners not understanding the business direction and regulations in this country quite well. This is why you should talk to one of our team and solicit complete support and guidance.

Yes, shelf companies are vintage companies already included in Russia. Such networks have no monetary operations and no liabilities or debts. Shelf companies must be bought and activated to have procedures on the market. The acquisition process is explicit and can be handled by one of our Russian team personnel as soon as you deliver a few essential documents. If the ownership transfer is completed, you can start the activities on the Russian market. Feel free to contact us for comprehensive support and tailored services to your business needs.

According to the Company Act in Russia, at least two stockholders can open a holding company in Russia by choosing from operating or pure holding companies. A holding company can own the intellectual property rights of another company, at least 10% of the shares in the firm, and, in some cases, the voting rights. 

Russia is one of the most influential economies globally and a vast FDI inheritor internationally. The business possibilities are excellent in Russia, and the climate is meant to attract foreign investors in a large number each year. Among the advantages of the Russian business environment, overseas entrepreneurs enjoy the tax regime, the transportation and logistics, the appealing free trade zones, and the well-developed sectors of interest. The marine industry is one of Russia’s solid points because the country has essential exits to the Black Sea, the Arctic Ocean, the Sea of Japan, the Pacific, and the Barents Sea that allow a wide range of import and export activities with countries worldwide.

Five critical special economic zones host the IT companies in Russia, with multiple tax advantages and other benefits that sustain the business development in these areas. The following facts and figures highlight the business direction and economy of Russia:

1. Around USD 463 billion was the total FDI stock for Russia in 2019.
2. The Doing Business report issued by the World Bank ranks Russia 28th out of 190 worldwide economies.
3. The Bahamas, Cyprus, the Netherlands, Bermuda, Luxembourg, and the UK are the key investors in China.
4. Most FDIs are mandated to the metallurgy, extractive enterprise, and the financial sector.

The Commercial Code in Russia is one of the most significant sets of laws that regulate the business and the companies in this country. It is advised to have a clear picture of the Russian business legislation before commencing an activity.

For more details about the Company Act in Russia, you may contact our team.Company Act