Establishing a legal entity or a company in Russia works much in the same way as in other parts of the world, but there are always some country-specific factors to take into account.
First, let´s take a look at some of the forms of legal entities available. If you are a foreign investor looking to set up a company in Russia, you should think which kind of legal entity best suits the business activity you have in mind.
offices and Branch offices
and branch offices are always established by another legal entity, usually your
company which is located in another country. There are two main differences
between the two:
representative office can only fulfill representative functions, such as
performing market research or advertising activities on behalf of the parent
entity. A branch office however can perform all or part of the business
activities that the parent entity performs.
- A representative office can have no income of its own, instead it is simply financed by the parent entity. A branch office on the other hand can have its own sales and income in-country.
representative or branch office is represented by the head of the office, who
acts on the basis of a power of attorney issued by the parent entity. Financial
and legal responsibility of the offices´ activities remains on the parent
Establishing a representative office or a branch office in Russia generally takes approximately 2-3 months.
company or LLC
liability company in Russia is a formally independent legal entity. This means
that it has full financial and legal responsibility for its own operations. The
LLC is not responsible for debts of it´s shareholders or founders and vice
versa. The limited liability company must have a director on payroll who
represents the company according to statutes in the company´s charter. It´s
also possible to nominate a supervisory management body or a management board.
In general, the company director has a wide range of legal responsibilities on
the company´s behalf.
Establishing a limited liability company in Russia requires the following documents:
- A company charter
- A decision on founding the company (foundation minutes)
commercial register extract of the parent company or comapnies (or personal
information of the founders if they are physical persons)
of establishing a LLC generally takes approximately 1-2 months depending on how
long it takes to gather the necessary founding documents. Some notarizations
and translations of the documents are necessary.
There are a
number of practical issues to think about when starting a company in Russia.
These include the company address, which needs to be an actual physical place
with space for at least one person to work in. In case foreigners are to work
as the company CEO or in other positions, they need to receive a work permit. If
the company will work in sectors such as banking, insurance, special waste
management and others, a business permit will be required.
If you are interested in starting a business in Russia, contact Leinonen Russia for more information and assistance.
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