Do you wish to set up a business in Russia? Here is an overview on related conditions and procedures.
The fall of the Soviet Union marked a historic turning point for Russia, especially in economic terms. In fact, the Russian sales market has registered some 200 billion US dollars for 2013 along with a 13% annual growth rate. But according to finance experts, figures are much higher than official statistics. Hence, setting up a business in Russia can be very advantageous. Local authorities have set up a series of regulations so as to encourage foreign investment in the country, as well as the creation or large, medium and small enterprises.
Types of companies
The Full Partnership
No minimum capital is required for the creation of a Full Partnership company. Moreover, no minimum number of partners or associates is required. However, an individual is allowed to be involved in a single partnership. The company's liability is unlimited and its management is carried out with all participants' mutual agreement.
The Limited Partnership
A minimum capital of RR 10,000 (around € 200) is required for the creation of a limited partnership. Its creation is based on an association agreement whereby at least one partner has unlimited liability and the others have limited liabilities.
The Open Joint Stock Company
The setting up of a Open Joint Stock Company requires a minimum capital of RR 100,000, that is some 2,000 euros. The company should have at least one shareholder whose responsibility will be limited to the amount of contribution. This type of business is more suitable for large companies with many shareholders.
The Closed Joint Stock Company
This type of company best suits joint investments with a Russian partner outside the founding group. A minimum capital of RR 10,000 (€ 200) is required and a maximum of 50 shareholders is authorized.
Limited Liability Company
The Limited Liability Company is the most suitable when the investment is not made jointly with a Russian partner. The number of shareholders is limited to 50 and a minimum capital of RR 10,000 (about € 200) is required. Shareholders' liability is limited to the amount of their contribution.
Registering a company
Application for Registration
First of all, you have to fill and sign a company registration form (P11001) which then has to be notarized. A tax stamp of 200 rubles will be for each copy. You also have to hire a lawyer or notary to draft a company's charter. Note that the application can be made online.
Deposit of funds in the bank
You then have to open a temporary bank account in the company's name and deposit the minimum capital. Note that 50% of the required capital must be paid prior to the company's incorporation. As regards the balance, it has to be paid during the first year of operation.
Once you have registered your business, you will have to open a permanent account which will be merged with the temporary account. Documents to be produced to open the bank account are the following: an application form and a notarized copy, a notarized copy of the decision to create the company, a notarized copy of the basic agreement. Procedures can take more than a day.
Payment of registration fees
The company's registration fees, amounting to some RR 4,000 (about € 80) can be made the Sberbank's branches in Moscow or at Moscow's Fiscal Services Office 46. You have to keep preciously the invoice which will be issued.
Stamps for private companies
You have to produce your business stamp before opening a bank account. This should cost some RR 350. Besides, you must present your payment receipt during these proceedings.
Obtaining a unique registration number and a tax identification number (TIN)
To register with the Federal Tax Service, you will need the following documents:
- the Founders Assembly decision
- the company's Charter (2 originals as advised by federal tax services which will be returned to applicants)
- the notarized registration application
- receipt of payment of registration fees
- the new company's proof of address (lease documents or a letter written by the building's owner, bearing the company' signature and stamp)
- fees applied (some RR 4,000).
Note that procedures can take at least five working days.
Once you have completed these formalities, the registration department will issue a confirmation slip specifying the final registration date, as well as the date when you will have to collect all these documents. This should take five more working days excluding the application date. You will also receive a registration summary and one of the two original company charters which have been stamped by Russian authorities. The company's TIN will then be issued. Documents may be sent to you by post if necessary.
Certification and registration of the company manager's signature
Banks will require the company's registration number as well as documents related to the founder's financial position. Note that procedures may vary from one bank to another. Once the client has been accepted, the bank will issue a confirmation letter which will summarize the bank account's details. You will need these details to confirm the opening of a bank account to the Federal Tax Service. Hence, the following documents will be required:
- the company's legal status registration certificate issued by the government
- the founders identification documents
- the corporation license issued if these are directly related to the company's capacity
- the bank signature card
- documents confirming the authority of those present on the bank signature card
- documents confirming the authority of the company's executive body.
Note that the bank may also request additional documents. Make sure to inquire with competent authorities before proceeding so as to produce a complete file.
Good to know:
Documents required to open a company bank account may differ from one bank to another. Procedures also depend on the number of founders, the country where the head office is located, the amount of documents submitted to the bank when opening the bank account, etc.
Notarial fees for the signatures and bank card certification may cost some RR 200. You will also need some RR 800 and 1,200 for technical work.
The businessman's signature must be certified and registered by a bank. A specific form will be provided. You will have to duly fill and sign it. You company's stamp will also be required.
You can choose to either obtain a signature notarization form before opening the bank account or during the process.
A RR 200 duty stamp will be required if the document is completed by lawyers or notaries, not to mention technical costs. Moreover, the Bank of Moscow and Sberbank will charge RR 500 for the founder's signature certification.
Russian companies must provide monthly accounts and quarterly VAT to the Federal Tax Service.
Provide the bank account number to the Federal Tax Service
Finally, the company's representative has to submit the notice of the opening of a bank account to the Federal Tax Service within 7 days following the date of opening.
Doing Business www.doingbusiness.org
Ministry of Economy www.economy.gov.ru
Russian Federal Tax Service eng.nalog.ru
Registration Chamber www.palata.ru
Russian Trade Council www.rusimpex.ru
Chamber of Industry and Trade of Russia www.tpprf.ru