STARTING A BUSINESS IN RUSSIA
Doing business in Russia is possible only after official registration of an entity. Three solutions are possible: entity (organization) registration; individual entrepreneur registration; unincorporated farm registration.
There are several types of company, the most common ones in Russia being limited liability companies (LLC) and joint stock companies (JSC). Additionally, there are various business partnerships normally established to deliver small projects.
State registration procedure in Russia is quite simple and requires the notification of the pertinent registration authority of the intention to do so, upon which a registration certificate is issued.
Preparation for the registration of an entity
State duty payment is an essential prerequisite for the registration of an entity of any type:
- RUB 4000 - entity incorporation;
- RUB 800 - individual entrepreneur registration; unincorporated farm registration.
Entity incorporation is preceded by the registration of a legal entity effected by one or several founding parties (in accordance with the Russian legislation these may be Russian or overseas enterprises/Russians or foreign residents).
- incorporation decision (in the form of a written resolution, an agreement, etc.);
- incorporation documents in duplicate (the charter and the founding agreement);
Incorporation decision should state the amount of the company’s authorized capital, the procedure and term of capital formation.
The authorized capital may be formed by:
- monetary funds deposited in an account;
- any property owned by the founding parties;
- monetizable property or other rights.
In accordance with the Russian legislation minimum authorized capital size is:
- RUB 10 000 for limited liability companies (LLC)
- RUB 100 000 for private companies;
- RUB 1 000 000 for public companies;
Special authorized capital formation and size regulations were established for:
- alcohol retailers - not less than RUB 10 000 000;
- banks - not less than RUB 300 000 000;
- non-bank credit companies - not less than RUB 18 000 000;
- insurance companies - RUB 60 000 000 - 480 000 000 (depending upon insurance type).
There is no fixed minimum amount for authorized capital for business partnerships.
State registration application procedure
Forms of application for entity or individual entrepreneur registration forms are available on the Federal Tax Service web site.
The above application should cover personal data of all the founding parties, information on its compliance with the Russian legislation and authorized capital payment (shareholder equity, reserve capital, equity contribution).
Only personal details are to be indicated on the application form.
Documents to be attached to the state registration application
The following documents are to be submitted in duplicate to the registration authority together with the above application:
- incorporation decision (protocol);
- incorporation documents;
- abstract form the register of foreign legal entities of the country of origin or other equal proof of the legal status of the foreign legal entity\the founder; (if the entity is incorporated by an overseas company).
To register an individual entrepreneur or a farm it is necessary to submit an identification document (in most cases it is a passport), foreign residents are required to produce documents proving their right to stay in the Russian Federation (residence permit, temporary residence permit, visa, migration card, their copies being attached to the application form).
A receipt confirming the payment of the state duty is also attached to the application form.
It is worth knowing that the registration authority is not entitled to require the submission of documents off the list set forth in the Federal law “Concerning the State Registration of Legal Entities and Individual Entrepreneurs”.
State entity registration serving for indication purposes only, the legal conformity of the contents of the documents provided is not checked. Therefore, it is the sole responsibility of the founding party to check the accuracy of document execution to avoid possible trouble caused by improperly issued papers.
Filing of a state registration application
Tax Inspectorates, i.e. local offices of the Federal Tax Service, are in charge of business registration in Russia, more detailed information on the local tax inspectorates is available on the web site of the Federal Tax Service. Applications may also be filed at multiservice centers.
Tax offices or multifunctional centers may be addressed at the place of the founder’s residence or that of office location. If the founder owns another company, the latter’s address may be given.
Applications may be filed both personally or by proxy. The authorized representative is to have a notarized power of attorney issued by the applicant, a signed application and some other documents.
Upon filing an application a pertinent receipt, indicating the list of documents submitted and the date of filing is issued by the registering authority.
Optionally, an application and the attachments thereto may be sent by registered mail with a declared value and a list of enclosures. The acknowledgement of the receipt of the state registration certificate is to be sent to the applicant’s specified address.
E-applications may be also filed on the web site of the Federal Tax Service web (Submission of e-documents for the state registration of an entity). In this case, receipt acknowledgements are e-mailed to the applicant.
State entity registration procedure
In accordance with the Russian legislation state registration is performed within 5 days after application filing. An entity is deemed registered upon its listing on one of the following national registers:
- Unified State Register of Legal Entities (ЕГРЮЛ);
- Unified State Register of Individual Entrepreneurs (ЕГРИП).
All the entities are assigned with primary state registration numbers (ОГРН) to be used for document execution.
National registers embrace basic company data (Russian companies): incorporation date, founder details, legal address, authorized capital size (for companies), etc. The data are generally accessible and obtainable for a small fee.
State registration is confirmed by corresponding extracts form the Unified National Register of Legal Entities or the Unified State Register of Individual Entrepreneurs and a returned copy of the charter with a stamp by the registration authority.
Furthermore, reports on the registered entities are published in the “Bulletin of Incorporation” (also available at www.nalog.ru)
State registration may be denied in case of inappropriate filling in of the application form or document execution.