The legal form of business registration in
The legal type of a company regulates many fields of business activity, such as contract making, tax reporting, accounting, customs administering, and ability to have foreigners as employees.
| Russian legal entity | Subdivision of a foreign company | ||||
| Limited liability company (LLC) | Private joint stock company (PJSC) | Representative office (RO) | Branch | ||
| Legal Status | |||||
| LLC and PJSC are Russian legal entities. They may conduct any form of commercial activity, provided it is not prohibited by the Russian legislation. For conducting any licensed type of activity it is necessary to obtain license. | RO and Branch of a foreign legal entity are not considered as a separate legal entity. RO and Branch are subdivisions of a foreign company. They are considered as Russian non-resident entities for currency control purposes
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| Registration and Accreditation | |||||
| Registration is done by the Tax authorities, which keep the United State Register. | ROs and Branches may be accredited at several state bodies, such as State Registration Chamber (GRP), Chamber of Trade and Commerce and various Ministries of the Russian Government, although the Consolidated State Register of ROs and Branches is kept by GRP. ROs and Branches also shall be registered with the Tax authorities, State Committee for Statistics and three non-budgetary funds (Pension fund, Obligatory Medical Insurance fund and Social Security fund). Please also see Registration process and list of documents | ||||
| Registration and Accreditation duties and charges | |||||
| Registration duty is 2000 rubles (~70 USD). | Accreditation charges of the GRP depend on the term for which a RO is set up | Accreditation charge of the GRP for 1, 2, 3 and 5 years accreditation is 60,000 rubles (~2150 USD). | |||
| Authorized capital | |||||
| Minimum authorized capital for LLC and PJSC is 10,000 rubles (~370 USD)
| There is no requirement for the authorized capital. | Under the Federal law there is a requirement to form assets, but the amount is not stipulated. | |||
| Management structure | |||||
| LLC and PJSC have a three-tier management structure consisting of (1) the general meeting, (2) the board of directors, and (3) the executive body**. | For both the RO and B ranch an executive body (Head of RO or Branch) should be appointed by the foreign legal entity. Such executive body acts pursuant to the Power of Attorney issued by the foreign legal entity. | ||||
| Shares/Units | |||||
| Authorized capital is divided into shares/units which represent rights and obligations of a shareholder/participant in accordance with their participations in the authorized capital. | Non applicable | ||||
| A unit is not a security. | A share is a security. | | | ||
| Accounting and Tax Compliance | |||||
| Companies shall file accounting and tax reports with the tax authorities on a quarterly basis. Reports on VAT shall be filed every month. For more information please see Reporting compliance table | There is almost no distinction between a Branch (or taxable RO) and Russian legal entity in terms of tax compliance. RO which carry out auxiliary and marketing activity also should submit reports on their activities and possible income and all reports related to payroll and social taxes. Reporting is generally done every quarter with exception for VAT (monthly) to the special Tax inspectorate, which deals only with RepOffices and Branches. For more information please see Reporting compliance table | ||||
| Foreign Staff | |||||
| In order to employ foreign citizens a company shall obtain Employment permit. Afterwards every foreign employee shall obtain personal work permit. A work visa is also required. For more detailed information please see Employment of foreign citizens | RepOffices and Branches of foreign companies have to obtain Employment permit. Every foreign employee also has to obtain personal work permit. A foreign employee visa (subtype of work visa) is required. For more detailed information please see Employment of foreign citizens | ||||
| * Effective 1 January 2004, the registration procedure for Russian legal entities is simplified by the introduction of a “one window” approach to the process and Tax authorities are responsible for the registration procedures. | |||||
Sole ownership.
As it was mentioned before Limited Liability Company or Private Joint Stock Company can be founded by an individual (Russian or foreign) or by a legal entity.
The founding document at Sole ownership company is a Charter. Such company doesn’t have some management bodies such as General Meeting of the Founders. There is no Board of Directors. All the decisions are taken by the sole founder. Accordingly legislative requirements on calling of the general meetings, and other procedural requirements do not apply to such company. The management of the company is done by issue of written decisions of the fonder. If the fonder is also a General Director in the company the decisions are made by issuance of orders.
At the same time such company is a separate legal entity, its assets are legally isolated from the assets of the founder.
Formation of a Russian legal entity. General information.
Stages of registration of a Russian legal entity:
1. Registration at the Tax authority 5-7 working days
2. Registration at the State Committee for Statistics. 2-5 working days
3. Making of the seal of the Company. 2-5 working days
4. Registration at non-budgetary funds (Pension Fund, Social Security Fund, Obligatory Medical Security Fund) is done by tax inspectorate
5. Opening of the bank account depends on the bank
6. Registration of the shares issue with the Federal Services for Financial Markets* 24-30 working days
*Is applicable only to Private and Public Joint Stock Companies.
List of documents required from a company – non-resident:
1. Certificate of Incorporation or extract from the Trade Register of the country of origin.
2. Memorandum and Articles of Association.
3. Resolution of the Company’s executive (managing) body upon the appointing of the Head of the new company or Power of Attorney to the person authorized by the Company.
Documents mentioned above require Consulate legalization or apostille with notarized translation to the Russian language.
List of documents required from a foreign individual:
1. Passport
2. Russian visa (if any)
Representative and Branch office accreditation. General information.
Stages of accreditation:
1. Accreditation with the accreditation authority 14-21 working days
2. Producing the seal 2-5 working days
3. Registration at the State Committee for Statistics 2-5 working days
4. Registration at the State Tax Inspectorate 5-7working days
5. Registration at non-budgetary funds is done by tax inspectorate
6. Opening of a bank account depends on the bank
List of documents required from a foreign legal entity:
1. Memorandum and Articles of association of a foreign legal entity (charter, bylaw).
2. Certificate of Incorporation of a foreign legal entity or Extract from the Trade Register.
3. Letter of introduction provided by a Bank that serves for a foreign legal entity in the country of incorporation that proves its solvency.
4. Resolution of a foreign legal entity about opening of the Representative or Branch Office and appointing of the Head.
5. Power of Attorney given to the Head of the Representative or Branch Office.
6. Certificate of registration with Tax authorities with Tax Code of a foreign company (or its analogue in the country of its establishment).
Documents mentioned above require Consulate legalization or apostille with notarized translation to the Russian language.
VISTA Foreign Business Support provides consulting, law, and accounting services for organisations and individuals.
Phone: +7 095 933 7822, Fax: +7 095 933 7823