Setting up a Joint Stock Company (JSC) in Russia

A Joint Stock Company is one of the most popular types of business in Russia. Russian JSCs can be either open (OJSC) or closed (CJSC). The difference between the two types of Joint stock companies is that the shares of an open JSC can be transferred freely, while in a closed JSC, share transfers are restricted.

Capital

In order to set up an OJSC in Russia, a minimum capital of 100,000 RUB is required. For establishing a CJSC, 10,000 RUB are needed as an initial investment. Half of the initial capital has to be paid up within three months after its registration, while the rest of it must be deposited within the end of the first year. The amount divided in shares is considered security and must be registered with the Federal Service for Financial Markets.

Shareholders

A closed JSC in Russia may have a maximum of 50 shareholders. If the number of shareholders in a Russian CJSC exceeds 50, the company may be converted to an open JSC. There are no restrictions regarding the maximum number of founders for an OJSC. The liability of shareholders is restricted to their investment. Any OJSC as well as CJSC must keep a shareholders' register where the holdings of the shareholders must be noted.

Management

A Russian joint stock company with more than 50 shareholders must have a board of directors, also known as a supervisory council. However, the most important body in the management structure of a JSC in Russia is the General Meeting of the shareholders. Each share provides one vote for a founder as most decisions are made by a simple majority vote. However, major decisions require a supermajority of 75%. There is also an Executive Body, which may consist of a single person or a committee. 

Control

Accounting records must be kept in Russian roubles. Any Russian JSC must have an auditor, who can be an Internal Auditing Commission or an Internal Auditor. The auditor or members of the auditing commission must be elected by the shareholders. Companies must submit accounting and tax reports with the local tax authorities on a quarterly basis.

Other requirements

The registration of a Russian joint stock company is done by the Tax authorities. In addition, a JSC must also register with State Committee for Statistics and three non-budgetary funds, such as the pension fund, obligatory medical security fund and social security fund. In order to have the permission to employ foreign citizens, a joint stock company needs to obtain an employment permit.

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