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If you want to form a business in Russia, you can decide on opening a new company, which may take three and six weeks, or you can save time and buy a ready-made one.
In Russia, you can buy a few ready-made or shelf companies. Limited liability (OOO) and private (or closed) joint-stock companies are the most typical types. These companies have already been formed, and who can sell them. A Russian shelf company has a creator, a director, and a registered office, and it is registered for VAT.
The methodology of buying a Russian shelf company
Both individuals and legal entities can buy a shelf company in Russia. The purchase is made by signing a share or stock (depending on the company) purchase agreement. After the purchase, the new owner will inform the relevant authorities about the changes brought to the company. A company must be bought entirely in Russia, as “beneficial owner” is not accepted in Russia.
The shelf company in Russia has a general director, regarding the Russian Company Law does not recognize the term nominal director, like other countries. This means that the company director will be held fully liable for the business’ operations, and they will have absolute power in the company’s management even if the director presents power of attorney to a third person, who cannot share the liability to this third person.
Changes which can be made when buying a company Russia
After purchasing a shelf company, the new owner should make all the preparations:
- register the new owner or owners;
- naming a new general director;
- move the company and register its new address;
- pay all the taxes.
After all, changes have been made, an application stating the differences must be signed by the company’s previous director and submitted to the authorities. Who will sign in the application in front of a public notary?
The address of the new company cannot be a residential one, as it is restricted by the law to use a residential address for company registration. The company must have a physical address, as in Russia, it is common for the authorities to check the location.
Who must submit the accounting and tax reports with the authorities before buying the company, as Russian companies do not have dormant accountancies?
According to Russian laws, the director of a company must gain a salary; therefore, before making a purchase, one has to make sure there are no tax liabilities.
Why purchase a shelf company in Russia?
There are several advantages which a Russian shelf company can deliver. Apart from the fact that the company is already incorporated and has tax and VAT numbers, foreign investors can start their activities once all the formalities are completed.
Natural persons gain shelf companies, but foreign entities can also purchase such companies to incorporate their existing history into the Russian company. Owning a local business is more advantageous when entering the market as it can attract more clients and thus more profits.
Apart from these, foreign investors can also apply for corporate loans with Russian banks and obtain financing faster.
There are different ways in which a foreign investor can purchase a Russian company, such as mergers and acquisitions;
However, these procedures are more complicated and involve higher costs and more time.