Russian Company Registration

Doing business in Russia is cost-effective, and the country is accessible by land and sea, so entrepreneurs (especially international ones) have a variety of transportation options. In addition, Russia has the eighth largest labor force in the world, which makes it cheaper to hire employees, pay for living expenses, food and transportation costs. Russia is promoting standardized and transparent corporate management through reforms and restructuring. Tax policy is becoming more favorable for taxpayers and sectoral restrictions have been liberalized for foreign investors, especially in the field of technology and innovation.

Advantages of incorporating a Russian company

1.Good location

Russia is the largest country in the world in terms of territorial area and has the world’s largest reserves of mineral and energy resources, and is the world’s largest exporter of oil and natural gas.

2.Convenient for Russian-Chinese trade

Registering a Russian company will make it easier to start trade with Russia, land in Russia and develop the local market.

3.Russia’s investment promotion policy

Russia has launched a series of preferential policies for attracting investments, planned the construction of large investment parks, attracted foreign investment and offered various benefits to the incoming enterprises.

4.Participation in many world organizations

Russia is one of the world’s major powers, a recognized nuclear power, a permanent member of the United Nations, a member of the Belt and Road, G20, European Council, APEC, SCO, OSCE, WTO and BRICS countries.

5.Favorable to the development of light industry

Russia is known as a “warring nation”, but the light industry is lagging behind and the development of light heavy industry is unbalanced, so the market outlook is favorable.

6.Encourage foreign investment

The Russian government encourages foreign direct investment in traditional industries such as oil, gas, coal, wood processing, building materials, construction, transportation and communication equipment, food processing, textiles, automobile manufacturing and other industries.

7.Good development of cross-border e-commerce

Hot products on Russia’s popular e-commerce platforms include: apparel, children’s products, household goods, clothing, home appliances and electronics.

8.Easy to do business

Foreign investors can set up trading companies, as well as production companies, stores, shopping malls, hotels, guesthouses, small, medium and large factories, service companies, etc. in Russia.

1.Subsidiaries

In Russia, there are two types of registered subsidiaries: limited liability companies and joint stock companies.

(1) Limited Liability Company (000): Limited Liability Company is the most popular form of legal entity and has the least mandatory requirements for shareholders.

①.The registered capital of a limited liability company is divided into shares, which, unlike shares, cannot be registered as marketable securities with the relevant authorities in accordance with the legislation of the Russian Federation, and the amount of the registered capital of each shareholder of the company is determined in accordance with the amount of his capital contribution.

②.The shareholders of a limited liability company are liable for the debts of the company only to the extent of their capital contribution. One of the most important features of a limited liability company is that if a shareholder sells his or her share of the registered capital of the company to a third party other than the shareholder, the other shareholder has a right of first refusal to purchase that share of registered capital. Under the law, this transfer must be compulsorily notarized.

③.The basic features of a Russian limited liability company: the company may have one or several shareholders, the maximum number of shareholders may not exceed 50. If the number of shareholders exceeds 50, the company must be transformed into an open joint stock company or production cooperative within one year. In addition, a one-person limited liability company cannot establish a new one-person limited liability company. The minimum registered capital is 10,000 rubles, which is approximately 220 euros. Prior to the state registration of the company, the capital contribution to the registered capital shall be not less than 50% and the remaining 50% of the registered capital contribution shall be paid within four months after the registration. The Company is managed through the Shareholders’ Meeting, the Board of Directors (formed according to the wishes of the shareholders) and the General Manager/Management Committee. In the case of several corporate shareholders (e.g., joint ventures), a shareholders’ agreement may be entered into between the shareholders.

(2) Joint-stock company (A0): joint-stock companies are less frequently established in Russia, as the legal regulation of such companies is more complex.

①.There are two forms of joint-stock companies, namely open joint-stock companies (no limit on the number of shareholders) and closed joint-stock companies (the number of shareholders may not exceed 50).

②.The registered capital is divided into shares that meet the requirements of the legislation on marketable securities and shall be registered as marketable securities with the corresponding Russian state authorities; unlike limited liability companies and closed joint stock companies, shareholders of open joint stock companies and companies do not enjoy the right of first refusal to transfer their shares from the company’s shareholders to third parties.

③.The minimum registered capital limit for an open joint stock company is 100,000 rubles (approximately €2,200) and for a closed joint stock company is 10,000 rubles (approximately €220).

④.The governing bodies of an open joint stock company are the general meeting of shareholders, the board of directors and the general manager or management board; in the case of more than one shareholder (e.g. joint ventures), a shareholders’ agreement may be concluded.

2.Branch offices

A foreign company may establish a branch in Russia to carry out business activities.

①.A branch of a foreign company is not an independent legal entity.

②.The person in charge of the branch is appointed by the Company and entrusted with the activity in accordance with the authorization.

③.A branch office of a foreign company is a branch of the company and may perform all or part of the company’s functions and has the right to conduct business activities independently.

④.The branch shall be registered with the State Registration Office of the Ministry of Justice of the Russian Federation.

⑤.In addition to registration, registration of the branch includes registration with tax authorities, statistical authorities and state budgetary funds, and opening of accounts.

3.Representative Office

A foreign company may carry out business activities in Russia through a representative office.

①.The representative office of a foreign company is not an independent legal entity and represents the interests of the foreign company in Russia. The head of the representative office is appointed by the foreign company and carries out activities in accordance with the authorization.

②.The basic tasks of the representative office are to carry out business activities, represent and protect the interests of foreign companies, and the representative office does not have the right to engage in business activities independently.

③.The Representative Office shall be registered at the State Registration Office of the Ministry of Justice of the Russian Federation, while the Representative Offices of foreign business associations and foreign companies or organizations with which the members of the Russian Chamber of Commerce and Industry cooperate shall also be registered at the Russian Chamber of Commerce and Industry.④.In addition to obtaining approval, the procedure for registration of representative offices includes registration with tax authorities, statistical authorities and state budgetary funds, and opening of bank accounts.

4. Institutions for the registration of enterprises

In the territory of the Russian Federation, the registration authority for legal entities (subsidiaries) is a regional branch of the Federal Tax Service. The above-mentioned registration authorities are located throughout the Russian Federation according to the principle of territorial division. A Russian Federation entity may have one registration authority, for example in the cities of Moscow and St. Petersburg, or several registration authorities, for example in the Moscow Region. The necessary registration authority is determined by the place of registration (domicile) of the subsidiary.

The State Registration Office of the Ministry of Justice of the Russian Federation or the Russian Chamber of Commerce and Industry is the registration authority for the representative office or branch of the Company, and for opening a representative office in any location in the Russian Federation, the foreign investor is required to submit a set of documents to the State Registration Office of the Ministry of Justice of the Russian Federation (address: 3/5 Smolensk Boulevard, Moscow) or to the Chamber of Commerce and Industry of the Russian Federation (address: 6 Ilyin Street, Moscow) for accreditation. In addition to the accreditation, the representative office or branch office of a foreign organization shall perform a series of interactive actions with the local state authorities in the place of residence of the representative office or branch office.

▶ Information required for the registration of a Russian company

(1) if the Russian legal entity is required to provide a notarized copy of the following documents:

① Articles of Association;

② Contract for the establishment of a limited liability company or joint stock company；

③ Certificate of state registration of the legal entity；

④ Tax registration certificate；

⑤ Letter from the National Authorization Code Committee；

⑥ Bank certificate for opening an account.

(2) In case of a Russian natural person, a copy of the following documents is required:

① Citizen’s passport;

② Registration information (proof of residence with zip code);

③ Uniform taxpayer number.

(3) In case of a registered subsidiary of a foreign legal entity (including limited liability company, open joint stock company, closed joint stock company), the foreign investor shall submit a set of documents to the registration authority where the future subsidiary is located, including:

① The registration documents of the domestic parent company；

② Certificate of registration or certification of the company by the domestic parent company’s national commercial authorities；

③ Articles of incorporation, or memorandum of association, or articles of incorporation, or share agreement, or certificate of consent of the domestic parent company;

④ Proof of bank account of the domestic parent company；

⑤ Proof of taxation of the domestic parent company.

According to the Russian legislation, the foreign company as the promoter must personally be the applicant (signatory) of the required documents for the establishment of the subsidiary. The above-mentioned documents shall be notarized and certified (notarized and consular certification). The signature of the right holder shall be notarized. In order to speed up the registration process, the applicant may submit the documents to the registration authority in person or, of course, under a power of attorney. In the latter case, the confirmation of registration will be sent by the registrar to the established subsidiary.

(4) In case of establishment of a representative office or branch of a foreign enterprise, all necessary documents for the recognition of the branch or representative office may be submitted to any Russian authority under an authorization. All the documents of recognition can be signed outside the country, so the signatory does not need to come to Russia in person. Some Russian banks may require the signatory to be present at the final stage of the bank account opening to leave a signature on the card, but this requirement is only an internal requirement of some specific banks.

(5) In case of foreign natural person shareholders, the following documents are required:

① A notarized translation of the natural person’s passport or other identification (photocopy or scanned copy of the temporary registration card, photocopy or scanned copy of the immigration card) with visa；

② Bank certificate of foreigner’s personal account (original or notarized photocopy)；

(6) necessary documents for opening a branch office：

① Business license or business register abstract or other similar documents;

② Establishment contract and articles of association;

③ Company registration certificate or other documents that can prove the domicile of the company;

④ Bank credit certificate of the company;

⑤ Tax registration certificate indicating the taxpayer’s number;

⑥ Proof that the person in charge of the branch has the right to represent the company abroad (resolution).

All the above documents should be notarized and certified by the embassy or consulate, and the signature of the authorized person should be certified by notary public.

Notarized.

(7) Necessary documents for opening a representative office:

① Business license and or extract from the business register or other similar documents；

② establishment contract and articles of association；

③ company registered address certificate or other documents proving the company’s address；

④ Bank credit certificate；

⑤ Tax registration certificate indicating the taxpayer’s number；

⑥ The person in charge of the representative office of the external representation of the company’s certificate (resolution)；

The documents listed above should be notarized and certified by the embassy or consulate, and the signature of the authorized person should be certified by a notary.

To register an organization in Russia, in addition to providing the necessary documents, you must also provide the corresponding information.

(1) The following information is required for the registration of a subsidiary:

① Necessary information for the establishment of a limited liability company: the full name of the subsidiary in Russian. If the name of the legal entity includes words such as “Russia”, “Moscow”, “Federation”, CIS, etc. and their combinations, it should be approved by the corresponding authorities, the name of the subsidiary in Russian abbreviated name.

② The scope of operation of the subsidiary (individual types of business activities are subject to approval).

③ The address of the residence of the subsidiary should be consistent with its correspondence address. For the purpose of tax registration, the address of the legal entity’s domicile should be certified by a letter of guarantee or a certificate of ownership issued by the lessor.

④ The name of each promoter and a copy of the passport indicating the place of registration and nationality (in the case of a natural person as a company promoter).

⑤ The institutional composition of the subsidiary, including the shareholders’ meeting, the board of directors, and the executive body (general manager/management board), with the exception of the board of directors, all other management bodies are mandatory. A Russian company is managed by the shareholders’ meeting and the executive body (in the case of a sole proprietorship the executive body is the general manager or the board of management of a committee).

In the event that a board of directors is established in the company, its function is primarily supervisory. The directors of the Board of Directors cannot act on behalf of the company, except in cases where they are authorized to do so. The members of the Management Board are employees of the Company, and the Directors of the Board may be non-employees of the Company. The names of the General Manager, each member of the Management Board (if the Company has a Management Board), each director of the Company’s Board of Directors (if the Company has a Board of Directors), a copy of their passports, the length of their terms of office, their nationality, and, if the General Manager has a Management Board, the name of the Director,

address, nationality and, if the General Manager is a foreign citizen, a work permit. There are no legal restrictions on the employment of a Russian or foreign citizen as a general manager of a Russian company. If the company intends to employ foreign citizens, the employer must obtain a permit to employ foreign employees and a work permit for each foreign employee. According to the law, the employer has the right to recruit and use foreign labor force only if the foreign employee permit is obtained. It is the employer’s obligation to obtain a work permit for all foreign employees before they begin work.

⑥ The name of the chief accountant of the subsidiary and a copy of his or her passport.

⑦ The registered capital of the subsidiary.

⑧ The name of the company’s bank and its address (phone number) or its contact person.

(2) The following information is required for the establishment of a branch:

① The full name of the branch;

② The type of activity of the promoter company；

③ Registered address of the branch; Description: The registered address of the branch should be consistent with its correspondence address.The registered address of the branch should match its correspondence address and be proved by the lease contract.

④ The name of the person in charge of the branch, a copy of his passport, period of employment, address of residence, nationality.

If the person in charge of the branch is not a Russian citizen, he/she shall first obtain a work permit.

⑤ The name of the bank where the branch will open the account and its address (telephone) or contact person.

(3) The following information is required for opening a representative office:

① The full name of the representative office;

② The type of activity of the promoter company;

③The registered address of the representative office, the address of the representative office should be consistent with its correspondence address, and provide a lease contract to prove it.

④ The name of the person in charge of the representative office, a copy of his passport, the period of authorization, residence, nationality and, if the person in charge of the representative office is not a Russian citizen, a work permit.

⑤ The name of the bank where the representative office will open the account and its address (telephone) or contact person.

Firstly, investors need to submit an application form to the Russian government, open a company bank account, and then obtain a registration number and tax registration certificate from the Federal Tax Service.

The minimum paid-up capital for registering a limited liability company or a joint-stock company is approximately 10,000 rubles.

The registration process for Russian legal entities can be divided into the following time periods:

●Registration with the tax authorities (up to 7 working days)

●Registration with the National Statistical Committee (2 working days)

●Making a company seal (2 working days)

●Opening a company bank account (depending on the bank’s speed)

Foreign investors registering a company in Russia must submit the following documents:

●Company registration certificate

●Company charter

●Passport and Russian visa (if any)

●Registration certificate issued by the tax authorities

Russian companies must provide a valid local address as the company’s registered address. If investors have not yet found an ideal rental office space, they can consider using a virtual office.