Company Registration in Russia in 2023-24
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 to register 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.
Procedure for Russia Company Registration
The procedure for company registration in Russia typically involves the following steps:
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).
Choose a company name
The name must be unique and not misleading, and it must be approved by the Federal Tax Service of Russia.
Obtain a state registration number
This is required for all legal entities in Russia and is obtained from the Federal Tax Service.
Obtain a certificate of incorporation
This is issued by the Federal Tax Service after the company is registered.
Obtain a tax registration number
This is required for all legal entities in Russia and is obtained from the Federal Tax Service.
Obtain a company seal
This is required for all legal entities in Russia and is used for signing legal documents.
Open a bank account
This is required for all legal entities in Russia and is used for financial transactions.
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
Generally, the following documents are required for Russia company registration:
- Name of the company (full and abbreviated names in Russian, English, and English).
- Information about the amount of authorised 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.
Relying on the type of business, additional licences and authorizations may be expected. Also, the documents required to register a company in Russia may change and it is advisable to consult a professional from Odint to be guided accordingly.
Types of Business Entities for Company Registration in Russia
Numerous types of company entities can be registered for company registration in Russia, including:
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.
Joint Stock Company (JSC)
This type of company is suitable for larger businesses and is characterised by the issuance of shares of stock to shareholders. The penalty of stakeholders is restricted to the significance of their shares.
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.
This type of business entity is owned by two or more individuals, and the losses of the members are generally unlimited.
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.
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. Though it is a must to do thorough research while thinking to register a company in Russia.
Eligibility for Russia Company Registration
In order to be eligible for Russia 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 authorised 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 Russia Company Registration
Some of the taxes that may be subject to when a company registration in Russia is done:
- Value-Added Tax (VAT): This is a consumption tax on goods and services that is typically levied at a rate of 20%.
- Corporate Income Tax (CIT): This is a tax on the profits of companies, which is typically levied at a rate of 20%.
- Social Security Contributions: Employers are expected to make assistance to the social security system for their workers, the rate is typically around 30%.
- Land Tax: This tax applies to land ownership.
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 licences 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.
Why register a company in Russia?
There are numerous explanations for why one might select to register a company in Russia.
Some of the reasons include:
- Russia is a member of the Eurasian Economic Union (EAEU), which provides access to a market of 183 million people and a potential market of $4 trillion.
- Russia has a large domestic market with over 144 million consumers, making it an attractive location for businesses seeking to expand their market reach.
- Russia is one of the world’s largest producers of oil, natural gas, and other natural resources, which can be beneficial for businesses involved in the energy sector.
- Russia has a well-educated and skilled workforce, which can be beneficial for businesses seeking to hire highly-qualified employees.
- Russia’s geographical location makes it an important transit point for trade between Europe and Asia, making it an attractive location for businesses looking to access both markets.
- The Russian government provides various forms of support for businesses, including tax breaks and subsidies, which can be beneficial for companies operating in the country.
- Russia has a streamlined process for company registration and business-friendly regulations which make it easy to start and operate a business in the country.
It’s worth noting that each country has its own set of advantages and disadvantages, and it’s important to consider which one is best for your business based on your specific needs and goals.
Advantages of Russia Company Registration
There are several advantages to company registration in Russia, some of which include:
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.
Favourable business environment
Russia has a relatively stable political and economic environment, which provides a favourable environment for businesses.
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.
Russia has a highly educated and skilled workforce, providing a source of skilled labour for businesses.
The Russian government offers various incentives for businesses, such as tax breaks and subsidies, to encourage investment and growth.
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.
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.
Russia has a great infrastructure that allows companies to do business in Moscow and St. Petersburg. Different incentives are available to companies in order to allow them to operate. Russia is a country with a skilled and prominent workforce, compared to Western nations.
Registering a company in Russia can be a time taking and expensive process. It’s recommended to hire a professional from Odint Consultancy to guide you through the process of company registration in Russia.
A foreigner can certainly start a business in Russia, though they must meet Russian government compliances for doing business in Russia.
Russia’s corporate tax rate is 20%.
A minimum share capital for a limited liability and joint-stock company is required 10,000 rubles each for the first and 100,000 rubles respectively for the second.
Yes, LLCs and all other types of Russian companies would be subject to the principle of limited liability.
A foreign national must be eligible to apply for Russian citizenship. Russia doesn’t encourage dual citizenship. However, citizenship via descent is sometimes possible.