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Company Formation Russia

Updated on Monday 20th September 2021

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First of all, once the decision to open a company in Russia has been taken, the client must provide three company names as per his/her choice, information on the shareholding structure and on the activities that the future company will conduct.

In order to prepare the company’s documents by the arrival of one of the shareholders, the beneficiary must provide a series of identification documents, among which we mention: passport copies of the director/s and shareholder/s, and in case one of the founders is a legal entity, articles of association and certificate of incorporation of the parent company.

The said documents must be translated into Russian by a sworn translator and duly notarized. Concurrently, the charter documents pertaining to the future entity are drafted and prepared in accordance with the Russian legislation. The above mentioned documents will have to be signed by the founders of the future Russian company opened in this country.

The second phase of the incorporation process is represented by the client’s visit in Moscow for two or three days. Our team will provide full assistance in this respect, organizing the necessary and relevant actions together with the client. At this point, several visits to the competent authorities are required in order to open a company in Russia.

For example, the Notary Public in Moscow, where the charter documents are signed by the authorized representative of the future Russian entity in front of the said Notary and the related duties are paid, and Tax Inspectorate, where the above mentioned documents are to be submitted, must be contacted with the purpose of duly finalizing the registration process.

Having completed these two phases necessary for opening a company in Russia, in approximately 14 days, the State Register will issue the newly established company’s constituent documents. These can be picked-up either personally by the client, or by a person designated by the client, on the basis of a Power of Attorney. With these documents, the company’s managing director can go to any bank in Russia and request the opening of the company’s account. Our company formation agents in Russia can assist with the registration process of any type of business.

Our team of consultants in company registration in Russia can also put you in contact with our specialists for legal services on offshore company setup, if this is of your interest as well. You can rely on us on the process of opening a company in an offshore jurisdiction and our specialists can also assist and represent you in the steps for opening an offshore bank account.

Requirements for company formation in Russia

Any person of any nationality or residence can be director or shareholder in a company opened in Russia; at some point following the registration of the company, either the foreign director obtains a working permit so that he/she can activate legally in Russia, or a Russian resident is appointed.

The shareholders of a company established in Russia can be both natural persons or legal entities; a company in Russia must hold a local registered office (service provided by BridgeWest) and the minimum capital for establishing a limited liability company in Russia amounts to RUB 10,000, i.e. approximately EUR 250.

Services provided for company incorporation in Russia

One of the main services is drafting the Articles of Association (necessary for the company incorporation in Russia); the Articles of Association of the Russian company can be signed through a Power of Attorney. The AA (Memorandum or Company Statute) will have to be filed with the local authorities in the Russian language.

Then, our team can help in drafting all other documents required for the incorporation of the Russian company; these documents include: Specimen Signatures, Special Forms provided by the Company Registration Office in Russia etc. Another service is arranging translations of relevant documents (all documents will have to be filed in Russian with the Russian Trade Registry).

Our consultants can help in the process of offering a registered office in Russia for your company (if required); the registered office may be at any address where the company opened in Russia declares to have its headquarters. At this address you will be able to receive correspondence from authorities and business partners.

We can also help in setting up a bank account for your Russian company. This refers both to an initial share capital account as well as a current bank account after the company is formed. You can also rely on us on recommending an accountant in Russia; accountancy services are recommended for any new business registration in Russia.

The process of setting up a Russian limited liability company 

A limited liability company may be opened Russia by one or more individuals or legal entities. However, there is a limitation to its founders, as the company can’t have as a shareholder another legal entity that is registered by a single shareholder. 

If the number of participants exceeds 50, the entity must be reorganized into an open joint stock company or a production cooperative within one year. In this company type, the founders have participation interests, which don't have to be registered with Russia’s Federal Securities Service. Every participant has equal rights and obligations, to the extent of their investment. The capital of the company consists of investments made by participants and has to reach a minimum of RUB 10,000 (currency of Russia).

In order to open a company in Russia as a limited liability company, investors should prepare documents such as: the standard registration form, completed as required, the minutes meeting in which the investors decide the registration of the company, evidence on the payment of the registration fee, the identity documents of the founders (passports for foreign investors). 

The company’s name must also reflect the legal entity chosen, in this case the LLC, and the investors must also select the appropriate business activities that will be developed through the newly founded company, in accordance with the Russian Classifier of Types of Economic Activities

Incorporating a joint stock company in Russia 

A joint-stock company is a corporate structure, with the authorized capital of which is divided into a certain number of shares. Shareholders bear no responsibility for its obligations and run the risk, within the value of shares belonging to them, of losses associated with the company's activity.

A joint-stock company in which shares can be traded freely and which may have unlimited number of shareholders is an open joint-stock company. Such joint-stock companies have the right to organize a public subscription to the shares issued by it and sell them on the open market. The company whose shares are distributed only among its founders or within another circle of persons, defined in advance, is a closed joint-stock company.

Russia key facts

In Russia, corporations are subject to a corporate tax of 20%. The tax has been reduced from 24% since 2008. 2% of the amount is paid to the central government as federal tax and the rest of 18% is payable to the regional government.

VAT in Russia has undergone significant changes since the modification of the Russian Tax Code as of January 2001. VAT is payable by all legal entities and individual entrepreneurs and in most cases its rate is 18%. However, legal entities and entrepreneurs may be exempt from VAT contribution if their annual revenue is less then RUB 1 million. Russian companies pay a dividend tax on their income of 9% and non-resident companies pay 15%.

What are the taxes payable at a federal level in Russia?

Since we were presenting information regarding the taxes charged in Russia, which are applied to both individuals and companies obtaining a taxable income, in the following section, we will present a short list on the types of taxes and the level at which they are payable. Foreign investors who want to open a company Russia should know that the Russian taxes are collected at a federal level, regional level or municipal level. In the list below, we will present the main federal taxes: 
  • VAT is payable at the standard rate of 18%, but there are also reduced rates of 10% and 0%;
  • one can also pay excise taxes for specific products, in accordance with the regulations of the Tax Code of the Russian Federation, Article 193;
  • the income of natural persons (residents or foreigners who obtain taxable income from Russia) are charged with a tax rate of 13%;
  • the corporate income tax is charged at the standard rate of 20%, but a 0% tax is applied to entities developing educational activities or to those developing medical services;
  • the stamp duty – is charged in accordance with the regulations of the Chapter 25.3 of the Tax Code of the Russian Federation
The taxes mentioned above are common taxes in all jurisdictions and they are customarily charged by the institutions of such countries. However, investors can benefit from an exemption from these taxes in the case of offshore incorporation process, as most of these will not apply. Still, various taxes are charged by offshore jurisdictions as well. 

What are other Russian taxes?

Above, we have presented the main types of taxes that are charged at a federal level. Please mind that the list of the federal taxes is not limited to the ones mentioned above, and if you want to start a business here, you can always rely on our team of consultants in company registration in Russia for more details on this matter. 

When we refer to other types of taxes, namely the regional and the municipal taxes, investors have to know that at a regional level they can be charged with the corporate property tax, the transport tax and the gambling tax, in accordance with the rules of the Federal Tax Service of Russia

The corporate property tax is a part of the corporate tax payable at a regional level and the rate at which the tax is charged is established by the regional authorities of the regions where companies operate (local and foreign companies). However, according to the law, this tax can’t be charged at a rate higher than 2.2% of the entire taxable sum. 

If you want to open a company in Russia in the gambling industry, you will be charged with specific taxes, imposed solely to this field of activity. The gambling tax is applied per gaming table or per gambling machine or other gambling device, and it varies between RUB 1,500 to RUB 125,000. 

Finally, at a municipal level, there are two types of taxes, namely the land tax, which can be charged at a value of 0,3% from the value of the respective property (for land and residential properties) or at a rate of 1.5% for other types of land. For individuals, other types of rates are available, depending on the value of their property. If you need more information on the tax system, our team of consultants in company registration in Russia are ready to assist you.  
To sum up, the Russian government encourages foreign investment, and there are plenty attractions for investors such as a skilled and productive workforce, a resourceful territory unexploited and a welcoming environment without any discrimination between foreign and local investors. Please contact us for more information regarding how to open a company in Russia and prices!