Company Law in Russia

Company Law in Russia is based on the Companies Act 1995 and Companies Act 1998. Recent changes have been made to the law that regulates limited liability companies, in 2008-2009 and also to the law for joint stock companies. However, these two types of companies are not the only choices that a foreign investor can make when coming to set up a business in Russia.

TYPES OF COMPANIES

The most common companies provided by the Civil Code of the Russian Federation are Limited Liability Companies and Joint Stock Corporations. In addition to these, the Russian Civil Code also mentions partnerships, which can be general or limited, and not-for profit organizations.

Joint Stock Companies are the most frequent in Russia. A JSC or AO is incorporated by its shareholders who may choose to perform any type of activity that does not break the Russian Law. An AO can be open or closed, based on being publicly or privately held. It is important for a Joint Stock Corporation to have a Board of Directors or Supervisory Council as a management system.

Limited Liability Companies in Russia are more popular among foreign investors. The LLC Law is similar to the JSC Law. One important difference is the capital of a Limited Liability company or OOO, which can be divided into participations or units and are not considered securities, unlike share in a Russian AO.

The registration procedure for both types of companies takes around three to five weeks and another two weeks are added to the tax registration procedure.

OTHER RULES

The labour legislation in Russia is pretty clear when it comes to the rules applied to resident employers or foreign employers who hire people for their business in Russia. After the Russian Company Law, labour law is the next one that a foreign investor must know and follow while setting up his company in Russia. Labour law is regulated by the Labour Code of the Russian Federation, which was reviewed in 2006. The employer and employee have the obligation to sign an employment contract, which has a general form, but can be adapted according to the company. The general Labour Law refers to disability discrimination penalties, working time regulations, harassment at work and data protection. Some obligations and rights are also mentioned in the Russian Labour Code, both for the employer and the employee. Also, work conditions and security matters are clearly stated in the labour legislation of Russia.

BridgeWest offers assistance for setting up a company in Russia, including virtual office and other related services.