How to register a company in Russia
How to register a company in Russia
Do you like to know how to register a company in Russia as foreigner, Limited Liability Company (LLC), branch office? The Russian Federation with 6.602 million square miles and 144.3 million inhabitants is the largest country in the world bridging Asia with Europe. With GDP per capita 8748.36 dollars Russia is one of the four key founder members of BRICS, the association of five major economies [Brazil, Russia, India, China and South Africa] of the world. And it continues to lead the BRICS by a large margin. Russia, the country with great business potential prescribes different legal forms of businesses to be followed. To start a business here in Russia, one needs to have first a legal status of the same. Among the forms of legal entities for the investors to choose from are;
- A Limited Liability Company LLC
- A Joint Stock Company JSC may either be private or public.
- A Partnership
Amongst the legal forms, LLC is the best suited forms for businesses with foreign capital irrespective of the types of business operations. However, additional business permits or licenses might be required to do some specific businesses.
Minimum Share capital required for forming and registering a Limited Liability Company [Obshchestvo s Ogranichennoy Otvetstvennost’yu or OOO in Russian] in Russia is 10,000 Rubles. Before proceeding with the registration of the company 50 percent of this should be deposited as a paid up capital in a bank account, which may be of temporary nature. This capital fund can later be transferred to any suitable company bank account once the registration of the limited liability company [LLC] is done. The Limited Liability Company or OOO in Russia must have one shareholder to register it. As many as 50 shareholders can be accommodated in the limited liability company ignoring the nationality or residency. The day to day management of the registered limited liability company here in Russia is restricted to the board of directors and the executive body as agreed upon at the annual general meeting [AGM] of the shareholders. The AGM of the companies required to be organized at least once in a year. The board of directors or the executive body do have the discretionary power to take any action or decision not outlined by the AGM, but judged important for the very betterment of the company.
Each and every registered limited liability company in Russia is subject to mandatory submission of their VAT reports to the Federal Taxation Service [FTS] under Ministry of Finance once in a month and this is how to register a company in Russia.
In Russia, the State Registration Chamber [SRC] under the Ministry of Justice is the authority to provide the intending promoters with the registration services of their companies. The SRC has three departments; the Administrative & General Services Department, the Organization & Supervision Department and the Accreditation and Visa Support Department. The Accreditation and Visa support Department is responsible for the registration of companies in Russia as well as the processing of Visas required by the foreigners to stay and work here. In general, the SRC issues a Certificate of Registration of Limited Liability Company within three to four weeks from the date of submitting application with documents required. Well, there is a provision to issue the Certificate of Registration of Limited Liability Company within three to five working days in case of urgency and upon payments of additional fees. The application for registration can be done in person by;
- Chairman or head of the Board of Directors and existing executive body of the proposed entity or;
- The founders or a member of founders of the proposed entity or ;
- Person/s legally authorized to do so with or without power of attorney and or ;
- Representative of the legal firm working on behalf of the proposed entity.
The application for the registration of the proposed Limited Liability Company must be supported with some documents as per SRC’s guide lines. These documents can be submitted or sent in one of the following ways:
- Physically or in person. A receipt will be issued by the SRC upon receipt of the same or
- By post with a forwarding letter mentioning the contents or enclosures. The receipt of the documents posted will be issued within one working day and sent to the senders address directly, or
- Electronically or e-submission. In return SRC will too send an electronic receipt to the sender or to the applicant/s of the proposed entity.
Let’s look at the procedures concerned with how to register a company in Russia (limited liability company). The procedures follow in step after step as follows;
Notarization & submission
- Application for Registration of Company
- Memorandum and Articles of the Company
Above documents have to be prepared and duly notarized and submit with the Accreditation and Visa Support Department of SRC. Approximately 200 rubles will be required for the formality and 1 working day to complete it.
Deposition of Company paid up capital in the bank
As discussion herein above is 50 percent of the authorized capital is required to be deposited in a bank account, either temporarily or permanently. The rest of the authorized capital must be paid within first year of the operation of the company from the date of registration of the company. You already clear about how to register a company in Russia as foreign investor and now the bank will require following documents to open the account;
- Account opening form
- Notarized copies of Memorandum and Articles of the proposed company
Opening a bank account is possible in a day.
Payment of the Company registration fee in Russia
A sum of Ruble RUR 4,000 is required to pay to State Tax Inspectorate being the fee for registration of the company. This process of paying fee would require 1 working day.
Registration of the proposed company with the Federal Tax Service
Intending companies are required to proceed to the local office [where the proposed company is located] of the federal Tax Service [FTS] for necessary registration to get the Id number [INN] of Tax payer. Along with the 4000 Ruble fees for the registration following documents are required for submission;
- Application form duly filled and notarized.
- Copy of the Resolution of the Board of Directors communicating the intention of registration.
- Memorandum and the Articles of Association of the company.
- Receipt of the payment of fees.
As many as 15 to 18 days, depending on the accuracy of the documents submitted, are required by the FTS to provide the applicant company with the registration and the issuance of the identification number [INN]. I hope you are clear about how to register a company in Russia, LLC, branch office, partnership and any format that is allowed for the foreign investors.
Making of a official seal of the
The signature card of the bank required an official seal on it for validation. A limited liability company in Russia must have one round seal containing the names and address of the company. Moreover, the company seal must bear the registration and Tax payer’s Identification number [INN] in it. A sum of Ruble 1000 and 1 working day is required to have the seal done.
Notarization of the Signature Card of the Bank
As per SRC, the signature card of the bank of the company also to be notarized to qualify for registration with them. Usually in a company the director in charge and the chief of accounts do have the authority to operate company accounts with a bank. Anyway, following documents will have to be ready for the notarization of the bank card. Remember, only after notarizing the bank card a company is allowed to open a permanent business account. As much as 1200 Rubles are required for the job [Ruble 400 for the card and Ruble 800 for the notarization service]. One working day is enough to do the job. Some more information of bank as part of how to register a company in Russia as foreign investor:-
– Original notarized copy of the registration certificate.
– Certificate from Federal Tax Service [FTS] issuing the Tax payer identification number [INN] with notarisation.
– Memorandum and Articles of Association of the company with notarisation.
– Boards resolution authorizing the person/s being the signatory/s of the company bank account with notarisation.
– Signature card duly filled, signed and sealed in with notarisation.
Opening of the company bank account
Depending on the Banks formalities and the requirements of documents vary. However, usually banks in Russia ask for documents relating to the formation of the company, particulars of the signatory/s of the signature card, attested copies of the certificates of registration etc. Once bank opened an account intimate the holder of the account of the same in writing. This process with the bank require 4/5 working days depending on the relation in between the bank and customer company.
Intimation to Federal Tax Service of the bank account number
The office bearers of the company now intimate the Federal Tax Service of the opening of bank account in prescribed form. This can be delivered in person or through mail. The bank in turn, as per law of the country, would notify the state Pension fund and the Social insurance fund of the opening of an account with them. 1 working day is required to be budgeted for this to finish.
Registration with the Moscow Center of Quotation of Work Places
The company law of Russia made it mandatory for the entire all the companies and individual owners that have employees in their payrolls to register with the local offices of Moscow Center of Quotation of Work Places. All the companies and the individual business owners in the Moscow that employing one hundred employees is required to maintain a provision for employment quota as follows:
- 2 % – for employment of people with disabilities,
- 2 % – for employment of young people
1 working is required to complete the registration with the Moscow Center of Quotation of Work Places.
No more questions about how to register a company in Russia as foreign investor? In the year 2016, the Global Doing Business report of the World Bank group ranked Russia in the 40th out of 190 countries in the ease of doing business index. Well, there are areas in Russia apart from the scope this report requiring attention to lighten the burden of business costs and hassles. One of the key areas that are required immediate attention is the Inspections by the Russian state machinery. In 2016 the Russian Agency of Strategic Initiatives, a non-commercial autonomous think tank has surveyed as many as 400,000 companies across 81 regions. The top brasses of the companies surveyed complained unanimously about the so called inspections, corruption and the quality of the roads to and from different destinations. The business community hinted about the unnecessary inspections killing time and costing money but with no transparency.
The findings of the survey report of Agency for Strategic Initiatives induced the government in Moscow to think thoughts. Some packages of reforms are planned to curb the regulatory activities of the concerned state authorities. Actions are in the process to removing inefficiencies in enforcing laws, harassing of entrepreneurs and benefit-seeking attitudes of the government employees. It’s a huge territory and paving the roads toward development might need more times to budget. The process of infrastructural developments is on the move along with the fine tuning of regulatory bodies to create a business-friendly environment in the short term.