Procedure of Company Registration

The form of organization created affects all aspects of a company's activities including transactions, tax consequences, financial and accounting, the ability to hire foreign nationals, repatriation of income and the application of international agreements etc therefore when incorporating a company in Russia special attention should be paid to the organizational and legal structure.

There are several possible forms of legal entity that a foreign investor can choose when incorporating a company in the Russian Federation. A legal entity may be registered in the form of a Limited Liability Company, Joint Stock Company (which may be open or closed) or a Partnership. Representative Offices or a branch of a Foreign Company may also be registered in Russia.

Legal entities in the Russian Federation:

Limited Liability Company (LLC) & Joint Stock Company (JSC)

  • Both LLC & JSC may exercise any form of commercial activity which is not prohibited by Russia Law. Licenses may however require to be obtained depending on the type of activity the company wishes to carry out.
  • The number of shareholders / participants should not exceed 50. For Public JCS there are no limits on the number of shareholders / participants.
  • The minimum number of shareholders is one.
  • The founders / shareholders of a LLC and JSC can be Individuals, Russian or Foreign Companies.
  • The Annual General Meeting should be held annually. The company may be run by the Individual Executive (The General Director) or by the Collegiate Authority (The Board)
  • The Tax Authorities register companies the details of which are then registered in the United State Register
  • A LLC and PJSC must also be registered with the State Committee for Statistics, Pension Fund, Insurance Fund and Social Insurance Fund.
  • The authorized capital is divided into shares / units which represent the rights and obligations of a shareholder / member in accordance with their shareholding in the authorized capital
  • Quarterly reports must be submitted to the tax authorities.

Branches and representative offices of foreign companies

  • A Representative Office and Branch of Foreign Entity are not separate legal entities but rather the unit of a foreign company. A Representative Office is a division of a foreign entity that has no right to engage in commercial activities in Russia whilst a Branch, although still a foreign entity, is permitted to engage in commercial activities.
  • Both Branches and Representative Offices must be registered with the Tax Authorities, the state Statistics Committee, the Pension fund, Insurance Fund and Social Insurance Fund.
  • There is no minimum capital requirement needed to create a Representative Office. Branch Offices are formed in accordance with legislation which requires an input of capital but the amount is not stipulated.
  • The Executive Authority should be appointed as a foreign entity in both the Branch and Representative Office.
  • In respect of taxation, there is little difference between the Branch and a Russian Legal Entity.
  • Representative Office entities are required to report their activities and any resulting income to the relevant authorities.

 

Formation of a Russian legal entity – general information:

Summary of Registration of a Russian Legal Entity:

  • Registration with Tax Authorities (5-7 working days)
  • Registration with State Committee of Statistics (2-5 working days)
  • Company Stamp (2-5 working days)
  • Registration in the Extra-Budgetary Funds (Pension Fund, Insurance Fund and Social Insurance Fund )
  • Opening a bank account (dependent on bank)
  • Registration and issuing of shares (25-30 working days) – only applicable to Joint Stock Companies.

List of Documents required from the Foreign Shareholder for the formation of a Russian Company:

  • Certificate of Incorporation / Extract from Trade Register
  • Directors Certificate and Registered Address Certificate. If these are not available any official documents containing this information are acceptable.
  • Company’s Resolution on forming a Russian company (this is not obligatory but is recommended)
  • Power of Attorney for the Russian resident signatory (only if there aren’t any Shareholders residing in Russia)

If a ready-made Russian Company is acquired the following documents are required:

  • Memorandum and Articles of Association
  • A Letter of Recommendation provided by banks (to prove its Good Standing)

List of Documents required for an Individual forming a Resident Company:

  • Passport;

These documents must be legalized and translated into Russian with the signature of the translator notarized.

Representative Office and Branch – Stages of Registration:

  • Registration with Tax Authorities (14-21 working days)
  • Company Stamp (2-5 working days)
  • Registration in the State Statistics Committee (2-5 working days)
  • Registration in the Extra-Budgetary Funds (Pension Fund, Insurance Fund and Social Insurance Fund )
  • Opening of Bank Account (dependent on bank)

List of documents required from the Non-Resident Company:

  • Memorandum and Articles of Association
  • Certificate of Incorporation / Extract from the Trade Register
  • A letter of recommendation provided by banks (to prove its Good Standing)
  • Company’s Resolution to set up a Representative Office or Branch and the Appointment of the Director;
  • Power of Attorney, this office director or affiliate;
  • Certificate of registration with Tax Authorities with Tax Code of a foreign company.

These documents must be legalized and translated into Russian with the signature of the translator notarized.

Take the next step, we are here to help.

Register a Russia company.
Open a Russia bank account.

  Resources:

Notional Interest Deduction: A Useful Tool for Cyprus Companies

Notional Interest Deduction: A Useful Tool for Cyprus Companies

The corporate income tax rate of a Cyprus-resident company is 12.5% on its global taxable revenue, with unilateral credit for related foreign tax suffered. Moreover, non-Cyprus residents are not liable to pay Cyprus withholding taxes on payments. Frequently, the effective corporate tax rate is much lower, or even as low as nil, due to various tax exemptions and allowances.

How Cyprus is Retaining its Competitive Edge as a Favourable EU Jurisdiction for Tax Purposes

How Cyprus is Retaining its Competitive Edge as a Favourable EU Jurisdiction for Tax Purposes

The recent implementation and increasingly stringent tax developments globally can affect companies with offices in different countries; rendering them non-viable if certain factors are not carefully considered.

The Legal Consequences of the Unlawful Transfer of Personal Client Data to Third Parties: UK Case Study

The Legal Consequences of the Unlawful Transfer of Personal Client Data to Third Parties: UK Case Study

As per English common law, banks are liable to both criminal and civil proceedings. According to the case of Bank of Scotland v A, banks have an ability to choose between criminal and civil liability in litigation with their customer. Nevertheless, ‘the last bit’ of this choice has to be decided by the court.

Dormant Companies: A Definition by the Cyprus Inland Revenue Dept

Dormant Companies: A Definition by the Cyprus Inland Revenue Dept

Following Circulars No.2011/11 and No.2011/5, this article will explain what a "dormant company" is, its symptoms and consequent requirements. The following is an extract from PART 1.7 of the "Company Income Statement" form (EP 4), whereby a definition of a dormant company is considered to be a company that meets the following conditions:

How to Effectively Use Software to Improve the Purchasing Process Within your Company

How to Effectively Use Software to Improve the Purchasing Process Within your Company

Companies all over the world rely on controls over expenditure at the point of logging a supplier invoice or receipt, which over time can cause difficulties in producing timely and reliable account management.

Information Security & Factors that Contribute to Data Leakage in the Ukrainian & UK Banking Sector

Information Security & Factors that Contribute to Data Leakage in the Ukrainian & UK Banking Sector

One of the most important regulatory banking documents on information security is the Regulation on bank secrecy and confidential information, which exists in every bank. This document entered into legal force by the banking sector’s order.

Troika Lenders Visit Cyprus Following Withdrawal From Bailout Programme

Troika Lenders Visit Cyprus Following Withdrawal From Bailout Programme

Representatives from the troika of Cyprus’ international lenders, the International Monetary Fund, European Commission and the European Central Bank, recently visited Cyprus for conducting their 4th post-scheme investigation following the islands recent withdrawal from the economic adjustment programme as agreed with the terms of the bailout.

The EC's Plans to Reduce NPLs in Europe May be Beneficial for Cyprus

The EC's Plans to Reduce NPLs in Europe May be Beneficial for Cyprus

Last month, the European Commission proposed an ambitious and comprehensive package of measures to tackle non-performing loans (NPLs) in Europe, making the most out of the promising progress already made in reducing risks in the banking sector.