efficient service solutions for the business development in russia

Company Registration in Russia

Corporate Forms, Required Documents &

Registration Procedure

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The Situation

Founding a company in Russia is a difficult task for foreign companies. The business owner also has to make a decision about the suitable legal form, deal with the Russian authorities when registering the company and establish a reliable bookkeeping and accounting that complies with the Russian tax laws.

The right company setup and an efficient bookkeeping is the base for a smoothly operating company and ensures future growth.


Possibilities of Market Cultivation

There are several ways how to cultivate the market:

1. Export and distribution via local distributor

2. Joint venture with local distributor

3. Foundation of a company, representation or branch


EXPORT AND DISTRIBUTION VIA LOCAL DISTRIBUTOR


EXPORT & DISTRIBUTION VIA LOCAL DISTRIBUTOR

This is the first step foreign companies usually do to access the Russian market und gather experience.

This form of market access usually exists for several years until the foreign company decides to cultivate the market directly.

The reason often lays in different sales strategies and priorities and the non-proportional distribution of profit margins as well the “filtered” market information the foreign company receives.


JOINT VENTURE WITH AN LOCAL DISTRIBUTOR



Often foreign companies enter into a Joint Venture with a Russian distributor to be closer on the market.

By trend Joint Ventures last not very long. A common reason therefore are the different mentalities of the business partners, which become obvious in different market strategies. The Russian business partner usually has a short term perspective on the business and takes profits if there is the possibility.



On the other side, foreign companies want to cultivate the market with a long term perspective and grow the client base continuously.

Another fact which make Joint Ventures fail is the fact, that the foreign business partner is only frequently in Russia present. This results in an factually un-proportional control of the company. Problems and conflicts are pre-programmed.


FORMATION OF A REPRESENTATION OR COMPANY


FORMATION OF A REPRESENTATION OR COMPANY

To cultivate the Russian market most efficiently foreign companies have the option to accredit a representation of register a company in Russia.

The biggest advantage is, that the foreign company can act absolutely independently with regards to the market strategy and market cultivation.


THE REPRESENTATION CHARACTERISTICS


THE REPRESENTATION CHARACTERISTICS

• Considered a foreign company, no company under Russian law

• Has usually no commercial activity and is not subject to VAT.

• Usually used for marketing activities

• Contracts are concluded with the mother company

• Pays no income tax for itself but for its employees

• Has to issue up to 15 different quarterly reports to different state organs

• Acceptance in Russian market is shrinking due to certain difficulties with the payment of bills which are subject to currency control and comprehensive documentation

• Foreign employees have to have a work permit and work visa


THE REPRESENTATION PROCEDURE OF ACCREDITATION (1)

Step 1: Collection of documents and preparation of the application for the registration of a LLC in Russia 1. Initially you will send us scan copies of the required documents for the company registration in

Russia. We will run a initial check for completeness and correctness. It is important to note that most of the documents need to be apostilled.

2. After we confirmed all documents are in order, You will send us all documents by DHL. 3. As soon as the original documents arrived we will arrange for a translation by a publicly

certified notary. 4. We will prepare the application for the accreditation, the corporate statues and other

documents required by the state organs for the accreditation of the representation in Russia.

5. You will need to come to Moscow to sign the Application for Company Accreditation in Russia. Your signature needs to be done in presence of the notary.

6. You also will need to visit the Russian Tax Office to apply for the accreditation of the company in Russia personally

7. About 18 business days after filing your registration application the representation will be officially registered by the State Tax Office. You will receive your company Registration ID, Tax ID as well as confirmation letters for the membership with the State Pension Fund, the Social Security Insurance and the obligatory State Health Insurance.

8. We will prepare a company stamp for you. This will take another 3 days.



Step 2: Opening of the bank account for the company

1. We will prepare the application for the opening of the bank account and the receipt of the bank client (electronic banking) and collect all documents required by the bank.

2. For issuance of the application for opening the account with the bank the General Director needs to be present.

3. The opening of the bank account will take 3-7 days.

4. After the opening of the bank account the share capital of the company (minimum RUB 10.000) has to be paid in. The payment can be done in two shapes and has to be completed within a year starting from the registration date.



Step 3: Notification of the state authorities about the account opening

1. We will prepare the necessary notification form which need to be signed by the General Director of the company and supply them to the state authorities.

The fee for the accreditation varies depending on the term (1 to 3 years) you apply for:

• 1 year: USD 1.000

• 2 years: USD 2.000

• 3 years: USD 2.500

It is possible to run the accreditation of your representation in express mode by paying an additional fee of RUB 15.000.


THE LIMITED LIABILITY COMPANY (OOO) - CHARACTERISTICS


THE LIMITED LIABILITY COMPANY (OOO) - CHARACTERISTICS

• Company regulated by Russian law

• The General Manager is a key position as he has unlimited decision rights

• Is subject to VAT and had to pay income tax

• Up to 15 reports need to be issued on a quarterly basis

• The preferred corporate form in Russia to do business with due to simplified payments and a certain financial protection of the business partner

• Payments with the foreign mother company a more difficult. They are subject to currency control


THE LIMITED LIABILITY COMPANY PROCEDURE OF REGISTRATION (1)

Step 1: Collection of documents and preparation of the application for the registration of a LLC in Russia 1. Initially you will send us scan copies of the required documents for the company registration in

Russia. We will run a initial check for completeness and correctness. It is important to note that most of the documents need to be apostilled.

2. After we confirmed all documents are in order, You will send us all documents by DHL.

3. As soon as the original documents arrived we will arrange for a translation by a publicly certified notary.

4. We will prepare the registration application, the corporate statues and other documents required by the state organs for the company registration of a publicly limited company in Russia.

5. You will need to come to Moscow to sign the Russian Company Registration Application. Your signature needs to be done in presence of the notary.

6. We will hand over the document pack for the company registration in Russia to the Russian state authorities. Your presence is not required at this stage.

7. 5 to 7 days after filing your registration application the company will be officially registered. You will receive your company Registration ID, Tax ID as well as confirmation letters for the membership with the State Pension Fund, the Social Security Insurance and the obligatory State Health Insurance.

8. We will prepare a company stamp for you. This will take another 3 days.



Step 2: Opening of the bank account for the company

1. We will prepare the application for the opening of the bank account and the receipt of the bank client (electronic banking) and collect all documents required by the bank.

2. For issuance of the application for opening the account with the bank the General Director needs to be present.

3. The opening of the bank account will take 3-7 days.

4. After the opening of the bank account the share capital of the company (minimum RUB 10.000) has to be paid in. The payment can be done in two shapes and has to be completed within a year starting from the registration date.



Step 3: Notification of the state authorities about the account opening

1. We will prepare the necessary notification form which need to be signed by the General Director of the company and supply them to the state authorities.


THE LIMITED LIABILITY COMPANY REQUIRED DOCUMENTS (1)

Required documents for the company registration of a LLC in Russia if the owner is a foreign legal entity:

1. Decision of the Board of Directors (or similar organ) in Russian language about the foundation of a company in Russia (this document will be prepared by us)

2. Corporate Statute of the company to be registered in Russian language (this document will be prepared by us)

3. List of activities to be executed by the new company as per Russian Tax Code Book (we will prepare this list in collaboration with you)

4. Apostilled statement of the registrar of the country the foreign legal entity is registered in (we will have this document translated by a Russian certified notary)

5. Passport copies of the representatives / directors of the foreign legal entity authorized to sign the application for the registration of the company in Russia (we will have this document translated by a Russian certified notary)

6. Application for the registration of the company (this document will be prepared by us)


THE LIMITED LIABILITY COMPANY REQUIRED DOCUMENTS (2)

Required documents for the company registration of a LLC in Russia if the owner is a are foreign natural person:

1. Decision of the owner of the company about the foundation of a company in Russia (this document will be prepared by us)

2. Corporate Statute of the company to be registered in Russian language (this document will be prepared by us)

3. List of activities to be executed by the new company as per Russian Tax Code Book (we will prepare this list in collaboration with you)

4. Passport copies of the owner(s) of the company (we will have this document translated by a Russian certified notary)

5. Application for the registration of the company (this document will be prepared by us)


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