Russia is the 11th biggest country in the globe. It is even a part of the BRICS, which helps to solve issues in expanding nations. However, it is the only continent surrounded by 10 oceans, making it accessible to everyone.
It is a desirable location to do business because, as it is close to Asia and Europe. However, the government is competent to develop substantial income by offering entrepreneurs a suitable business environment to perform their business activities smoothly. Though, investors should consider Russia when thinking of company registration in Russia.
In this article, we will be going to discuss more briefly the process of registering a company in Russia and the various documents that are required for company registration in Russia. So, without any more delay, let’s dive deep into Russian company registration.
Why Register a Company in Russia?
There are several compelling reasons to consider company registration in Russia, including:
- Access to the Eurasian Economic Union (EAEU): As a member of the EAEU, Russia provides companies with access to a large integrated market consisting of around 183 million consumers and a combined GDP of approximately $2 trillion, significantly expanding business potential across member states.
- Large Domestic Market: With a population exceeding 144 million, Russia offers businesses a substantial consumer base with increasing purchasing power, ideal for companies aiming to expand their market reach.
- Abundant Natural Resources: Russia remains one of the world’s top producers of oil, natural gas, minerals, and various raw materials, presenting significant opportunities, especially for businesses operating in the energy, mining, and manufacturing sectors.
- Highly Skilled Workforce: Russia boasts a highly educated workforce renowned for expertise in technology, engineering, science, and other specialized fields, providing a talent pool advantageous for businesses seeking qualified professionals.
- Strategic Geographic Location: Positioned strategically between Europe and Asia, Russia serves as a critical logistical and transit hub, facilitating trade and enabling businesses efficient access to both markets.
- Government Incentives: The Russian government actively supports business growth through various incentives such as tax breaks, special economic zones, and subsidies, particularly targeting foreign investors and entrepreneurs.
- Simplified Company Registration Procedures: Recent regulatory reforms have streamlined the company registration process in Russia, reducing bureaucracy and administrative hurdles, thereby easing the establishment and operation of businesses.
Procedure for Russia Company Registration
The procedure for company registration in Russia typically involves the following steps:
Step 1: Choose a legal form for the company
The most common types of companies in Russia are Limited Liability Companies (LLCs) and Joint Stock Companies (JSCs).
Step 2: Choose a company name
The name must be unique and not misleading, and it must be approved by the Federal Tax Service of Russia.
Step 3: Obtain a state registration number
This is required for all legal entities in Russia and is obtained from the Federal Tax Service.
Step 4: Obtain a certificate of incorporation
The Federal Tax Service issues this certificate after the company is registered.
Step 5: Obtain a tax registration number
This is required for all legal entities in Russia and is obtained from the Federal Tax Service.
Step 6: Obtain a company seal
This is required for all legal entities in Russia and is used for signing legal documents.
Step 7:- Open a bank account
This is required for all legal entities in Russia and is used for financial transactions.
The process of company registration in Russia may require additional steps and may take more time than the above list.
Documents Required for Company Registration in Russia
The documents required for company registration in Russia vary depending on the type of company and its ownership structure, but generally, the following documents are required:
- Name of the company (full and abbreviated names in Russian and English).
- Information about the amount of authorized capital and the distribution of shares among founders
- Copy of Memorandum and Articles of Association
- Contact details and copies of the passports of the Shareholder & Director
- Information about the legal address: A letter from the lessor committing to provide premises for lease/sublease. Also, a copy of the owner’s certificate of right of ownership.
- A statement of the company’s bank account, which must be in Russian.
- A statement of the company’s tax registration number, which must be in Russian.
Types of Business Entities for Company Registration in Russia
Numerous types of company entities can be registered in Russia, including:
1. Limited Liability Company (LLC)
This is the greatest popular form of firm entity in Russia and is suitable for small to medium-sized businesses. It has one or more partners, and the losses of the partners are restricted to the number of their capital contributions.
2. Joint Stock Company (JSC)
This type of company is suitable for larger businesses and is characterized by the issuance of shares of stock to shareholders. The penalty of stakeholders is restricted to the significance of their shares.
3. Individual Entrepreneur (IE)
This type of entity is suitable for sole proprietors and allows for self-employment. The owner is fully liable for all losses and responsibilities of the firm.
4. Partnership
This type of business entity is owned by two or more individuals, and the losses of the members are generally unlimited.
6. Representative office
This type of entity is a branch of a foreign company that is established in Russia to carry out certain types of business activities but not for profit-making.
7. Branch
This is a separate unit of a foreign company engaged in business activities in the territory of Russia, and is fully liable for its obligations.
Each type of entity has its particular requirements and advantages. However, it is a must to do thorough research while thinking of registering a company in Russia.
Eligibility for Russia Company Registration
To be eligible for Russian company registration, certain requirements must be met, these include:
- The firm should possess a minimum of one founder or shareholder who is a legal entity or an individual.
- The firm should possess a registered address in Russia.
- The firm should possess a Charter or articles of incorporation which must be in Russian.
- The firm should possess authorized capital, which must be not less than 10,000 rubles for LLCs and 100,000 rubles for JSCs.
- The firm should possess a management structure, which must be in Russian.
It’s important to note that there might be additional requirements or restrictions depending on the type of business and the region where the company wants to register.
Various Taxes on Russian Company Registration
Some of the taxes that may be subject to when a company registration in Russia is done:
When completing a company registration in Russia, your business becomes subject to several taxes, including:
- Value-Added Tax (VAT): A consumption tax levied on goods and services provided in Russia, typically at a standard rate of 20%. However, reduced rates (10% or 0%) may apply to specific goods or services.
- Corporate Income Tax (CIT): Companies registered in Russia are taxed on their net profits at a rate of 20%—with 3% directed to the federal budget and 17% allocated to regional budgets.
- Social Security Contributions: Employers must contribute approximately 30% of their employees’ gross salaries to Russia’s social security system. This covers pension insurance, medical insurance, and social insurance.
- Land Tax: Companies that own land plots in Russia pay a land tax, typically calculated at a rate ranging from 0.3% to 1.5%, depending on regional and municipal regulations and the designated purpose of the land.
Cost to Register a Company in Russia
The cost of registering a company in Russia can vary depending on several factors such as the type of company, the region where the company is being registered, and the services used.
Eventually, the cost to incorporate a company in Russia costs around 10,000 rubles. Various costs for company registration in Russia may include:
- Legal fees: These may include fees for drafting the company’s charter or articles of incorporation and for obtaining the necessary licenses and permits.
- Notary fees: These may include fees for notarizing documents and for obtaining the necessary signatures.
- State registration fees: These may include fees for registering the company with the Federal Tax Service of Russia.
- Bank account fees: These may include fees for opening and retaining a bank account.
- Other miscellaneous fees: These may include fees for translation services, courier services, and other expenses.
It’s significant to note that costs might differ depending on the form of business and the region where the company wants to register.
Advantages of Russia Company Registration
There are several advantages to company registration in Russia, some of which include:
1. Access to a large market
Russia has a population of over 144 million people and a rapidly growing economy, providing a large market for businesses to tap into.
2. Favorable business environment
Russia has a relatively stable political and economic environment, which provides a favorable environment for businesses.
3. Access to natural resources
Russia is rich in natural resources, such as oil, gas, and timber, which can provide opportunities for businesses in these sectors.
4. Skilled workforce
Russia has a highly educated and skilled workforce, providing a source of skilled labor for businesses.
5. Government incentives
The Russian government offers various incentives for businesses, such as tax breaks and subsidies, to encourage investment and growth.
6. International trade
Russia is a member of the World Trade Organization (WTO) and has signed several free trade agreements, providing opportunities for businesses to export their goods and services.
7. Legal protection
Companies registered in Russia have a legal structure that protects the shareholders from personal liabilities and can provide a layer of security for the investors.
It’s important to note that some of the above advantages may vary depending on the type of business and the region where to register a company in Russia.
Conclusion
Russia is a strategic destination for business, offering access to a large domestic market, abundant natural resources, a skilled workforce, and strong ties with the Eurasian Economic Union (EAEU). With simplified company registration processes and government incentives, it’s an attractive choice for foreign investors. However, due to regional legal and language requirements, professional guidance is highly recommended.
Looking beyond Russia? Europe is also a prime region for business expansion—offering stable economies, innovation-driven markets, and investor-friendly regulations.
Ready to get started? Contact our experts at OnDemand International for seamless assistance with company registration in Russia or Europe, tailored to your business goals.
FAQ’s
Yes, foreigners can legally start a business in Russia. However, they must comply with Russian laws and registration procedures, including obtaining a legal address, appointing a general director (who can be a foreign national or Russian citizen), and registering with the Federal Tax Service.
Russia’s standard corporate income tax (CIT) rate is 20%, with 3% going to the federal budget and 17% to regional authorities. Some regions may offer reduced rates as part of investment incentives.
The minimum share capital requirements are:
- 10,000 rubles for a Limited Liability Company (LLC)
- 100,000 rubles for a Joint-Stock Company (JSC)
Yes. Companies like LLCs in Russia operate under the principle of limited liability, meaning the shareholders or founders are only liable for the company’s obligations up to the amount of their contributions to the charter capital.
