You might have a great idea for a profitable business in Russia, but if your plan is not implemented in accordance with Russia’s complicated business and tax laws, your great idea will never make it off the ground. Our experienced corporate attorneys can be with you from step one or can come in whenever you hit a roadblock as you build your business. We are not only skilled attorneys, thoroughly versed in Russian law, but we are savvy businessmen and women who understands what works in Russia and what does not. Whether you need help navigating the process for starting your business, understanding the fees and taxes associated with business formation, or deciding what type of business to form for optimum profitability, our attorneys will be there for you.
Getting Started: Understanding the Types of Business You Can Form in Russia
As a business person or entrepreneur, you may be very familiar with the advantages and disadvantages of the various types of corporations you can form in your home country, but are unaware of how these structures work in Russia. As a first step in pursuing your business in Russia, you will have to determine what type of business you are going to form. At Jus Privatum, we can help you with any of the following legal classifications of a business:
- Partnership. We will advise you on whether a full partnership, limited partnership, or economic partnership would be most beneficial to you.
- Limited liability company. Like an LLC in the U.S., you will see the abbreviation OOO in Russia designating a limited liability company.
- Joint stock company. Your joint-stock company may be public or non-public and we will help you understand the difference and which will work better for you.
- Unitary enterprise. These are state-owned legal entities and are not open to foreign investors.
- Production cooperative. A modern version of the old Soviet state farms, cooperatives offer numerous cost advantages.
You will have different options for your company’s Russian subdivisions and will need to apply for accreditation of your branch or representative office in Russia. Our consultants will help you in determining which structure you can and should establish:
- Representative offices
- Branch offices
Preliminary Actions for Incorporation
As a foreign entity forming a corporation in Russia, you will have to follow what will likely be an unfamiliar process to you, even if you have started businesses in other countries. A thorough understanding of the procedures involved is the best way to avoid unneccessary delays. The attorneys of Jus Privatum will walk you through the process, providing sound legal advice, trustworthy referrals, and translation services every step of the way. Among the preliminary actions you will need to take are the following:
- Choosing a company name in Russian. Russia has some specific rules regarding the naming of companies, including restrictions on using the name “Russia” as part of your name and using foreign abbreviations. We will advise you on the best choice for a company name.
- Establishing a registered address in Russia. Documentation must be submitted proving that you have a commercial (non-residential) address for your company in Russia. Our law firm can help you locate and register a location in the Moscow area or in Saint Petersburg, or we can provide you with a “virtual office” address with mail forwarding services.
- List of business activities. You will be required to supply a list of all proposed business activities, including designation of a primary activity. We can help with this itemization based on your business proposal.
- Depositing minimum share capital in Russian Bank. An initial minimum deposit must be made into a Russian bank to establish the financial basis for the company.
- Appointment of a director. If the director of the company is a foreign citizen, he or she must obtain a valid Russian work permit and visa. The director will be held administratively and criminally responsible for all actions of the company. Our lawyers can help with obtaining the proper work documents.
- Management structure. Information on all shareholders and members of a board of directors, if you choose to have one, must be provided.
- Selection of a local bank. Our firm can help you select a local bank for all of your financial transactions and assist with the opening of any accounts you need.
- Tax structure. We will offer advice on the best tax structure for your business and provide the appropriate paperwork to establish your tax base.
Once all of these decisions have been made, the paperwork will need to be completed and filed with the appropriate agencies. Our experience with these procedures will expedite the incorporation process for you.
Preparing and Filing Necessary Documents
One of the biggest challenges with working in a foreign country is the language barrier. Even if you are fluent in Russian, the unique language of the business world may prove difficult. Our attorneys speak multiple languages and we have expert translators on staff to prepare documents for all countries involved. Some of the documents you will need in both the language of the country of origin and Russian include:
- Registration certificate, certificate of incorporation, or certificate of good standing for the foreign legal entity
- Company charter, including by-laws and articles of association for the foreign legal entity
- Copy of the passports for the company founder and proposed director(s)
The following documents will be drafted by our consultants for you:
- Application for the state registration of the new entity
- Resolution of the founder on the establishment of the Russian company
- Charter for the new Russian company
- Power of attorney issued by the founder for the Russian company
All of these documents must be notarized and legalized in the country of preparation and translated into Russian and notarized before filing in Russia. Our firm can provide these specialized services to you. We will also file all registration documents and tax forms with the proper state agencies and tax authorities.
Taking the Final Steps
The final steps in the incorporation process include opening a bank account, manufacturing a corporate seal, and registering with local pension and social security funds. Opening a corporate bank account in Russia is not as simple as it may sound. To open an account you will need to supply the following:
- Registration documents
- Tax certificates
- Company charter
- Proof of company address
- Bank application forms
- Company CEO interview with the bank manager
- Compliance check
Again, the consultants at Jus Privatum will help you with this process and provide translations as needed. While the use of a corporate seal is no longer legally required in Russia, it will still be expected by many people and agencies with which you will be doing business, so we advise you to have one made and to use it on documents along with authorized signatures.
This Is Only the Beginning
The most difficult part of running a business is often getting it off the ground. With our Russian business formation services, we believe you will find this part of the process much easier than if you tried to do it on your own. However, what we have presented here is only the beginning. With our continued support and access to our comprehensive business and legal services, we think you will have all the tools you need to make your business a success in Russia. Fill out a contact form or call +7 495 755-58-53 with any questions you have about our services.