Starting business in Russia

Starting business in Russia

If you decided to start business in Russia then the first step is official registration of an entity.

There are: entity (organization) registration;

individual entrepreneur registration;

unincorporated firm registration.

Among several types of company, the most common ones are limited liability companies (LLC) and joint stock companies (JSC).

Registration procedure in Russia requires the notification of the chosen registration authority of the intention to make it, upon which a registration certificate is issued.

State duty payment is a must for the registration of an entity of any type:

4000 rubles - entity incorporation;

800 rubles — registration of the individual entrepreneur; unincorporated firm 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 documents:

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;

securities;

monetizable property or other rights.

In accordance with the Russian legislation minimum authorized capital size is:

10 000 rubles for limited liability companies (LLC)

100 000 rubles for private companies;

1 000 000 rubles 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.

Aplication

The application forms for entity or individual entrepreneur registration can be found on Federal Tax Service web site.

The application form includes 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).

In application form only personal details are to be indicated.

Documents to be attached to the state registration application

The 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).

In order to be registered as an individual entrepreneur or a firm it is necessary to submit an identification document, for russians it is a passport, foreign residents shall provide the documents proving their right to stay in the Russia (residence permit, temporary residence permit, visa, migration card), and paid-up receipt.

According to the Federal law “Concerning the State Registration of Legal Entities and Individual Entrepreneurs” the registration authoritiy is not entitled to ask of addtional documents accept the ones stated above. Registration authority is checking only complience application forms with the provided documents.

The Application forms can be provided either personally or by proxy (providing notarized power of attorney) to the Tax Office depending on your residence address (all detailed info of your local tax office you can find on the Federal Tax Service web site). Or by registered mail with indication of enclosures and declaired value, all the attachments, receipt are to be sent as well.

Also it is possible to fill in the E-application form on the web site of Federal Tax Service. The acknowledgement of the receipt of the state registration certificate is to be sent to the applicant’s address.

The 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.

State registration is confirmed by corresponding extracts from 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.

Also you can check your registered entity in the “Bulletin of Incorporation” on the web site of the Federal Tax Service (www.nalog.ru)

State registration may be denied in case of inappropriate filling the application form or document execution.