Establishing a Russian Business Entity

Setting up a Limited Liability Company (LLC) in Russia can be a complex process requiring specialized knowledge. In this article, we will outline the key requirements for establishing an LLC in Russia.

To start business in Russia, foreign investors or Russian citizens must enroll their business at the state's State Unified Registry of Legal Entities of the Russian Federation. This includes filling out a registration application and sharing essential documentation to the registration authorities, typically the tax authority.

One of the essential requirements for setting up an LLC in Russia is having a minimum authorized capital of 10,000 rubles. This amount can be either paid in full or transferred as a credit.

Another key requirement is to have a management structure for the LLC, consisting of a sole executive body or diverse decision-making channels. The executive body is responsible for the day-to-day management of the business, while the supervisory body oversees the activities of the executive body and ensures compliance with the company's articles of association and any relevant laws.

In addition to these requirements, an LLC in Russia must maintain a register of its members, including their names, addresses, and percentage of ownership. It is also necessary to have a minimum of two members, but there is no upper limit on the number of members.

Another crucial aspect is accounting and taxation. LLCs in Russia are required to submit precise financial reports and submit annual tax returns. They also need to pay a 20% corporate income tax on their profit, which can be offset by losses carried over from previous periods.

The language in which the documents must be prepared is typically Russian, but an English translation is often required for global business operations.

A business license or permit, subject to industry regulations, is also required. The specific license or permit will depend on the nature of the business and should be obtained in advance of opening.

It is recommended that any foreign investor or entrepreneur engage with a professional advisor who is familiar with Russian business law and regulations. They can provide support for business compliance and avoid costly mistakes.