How to set up a company in Russia

According to Russian legislation, both foreign legal entities and individuals can create companies on the territory of the Russian Federation.

But at the same time, these persons may be prohibited or restricted by law from participating in some business companies. Foreign persons may not be founders of companies that carry out, in particular:

private security activities;
mass media activities, unless otherwise provided for by an international treaty of the Russian Federation.

In addition, a company with the participation of non-residents is subject to the rules and restrictions on transactions, as a result of which a non-resident can gain any control over a business company ofstrategic importance.

Russian legislation provides for many forms of ownership available to foreigners. The most popular are the following:

individual entrepreneurship;
imited liability company (LLC);
joint-stock company (PJSC, JSC).

The choice of a specific form depends on the characteristics of the business — its size, the number of organisers, the amount of capital investment, the type of economic activity, and other factors.

An individual entrepreneur is an individual (regardless of citizenship) who conducts business without forming a company. As a rule, such forms are used for micro and small businesses: retail trade, provision of services, independent work, etc. This form is characterized by a simple procedure for registering/liquidating a business, the freedom to use the revenue, a simplified reporting procedure, and other advantages.

But there are also disadvantages. Thus, individual entrepreneurship is inseparable from the personality of an individual. Therefore, a foreign entrepreneur is responsible for all obligations with his property. For the same reason, the registration of entrepreneurs is carried out at the place of residence. This means that only a foreigner who has a residence permit in Russia can be registered as an entrepreneur — these documents certify the fact of the residence. If a foreigner has a visa, he can confirm only the place of residence, so his registration as an individual entrepreneur is impossible.

One of the options for registering a foreign business is to open a joint-stock company. The peculiarity is that the authorized capital, in this case, is converted into shares owned by shareholders. A company can be public, and then its securities are in free circulation and are purchased by a wide range of persons. As in the case of an LLC, shareholders are only liable for their obligations with the value of their shares and do not bear any personal responsibility.

Joint-stock companies are established, as a rule, for conducting large and medium-sized businesses. Still, due to the complexity of registering and issuing shares, they are not popular.
If the business in the Russian Federation is established by an existing company abroad, one of the options is to open a branch or representative office.

This structural unit will not be an independent legal entity but a separate division of a foreign company, authorized to perform both representative and economic functions. At the same time, the opportunity to work at a branch or representative office appears only after accreditation.

The easiest way for a foreign citizen to open a company in Russia is in the form of an LLC. This legal form has the following advantages:

the minimum authorized capital that must be paid in cash (10 thousand rubles);
the possibility of the company’s formation not only by individuals but also by a foreign company registered, for example, in Cyprus;
limited liability — the founders are liable for the obligations of the LLC only by the value of their shares in the authorized capital (the LLC is separated from the identity of the founders).

limited liability — the founders are liable for the obligations of the LLC only by the value of their shares in the authorized capital (the LLC is separated from the identity of the founders).

After registration, such a company acquires the status of a legal entity with foreign capital, which applies to it all the provisions of the legislation on foreign investments, including guarantees of protection.

The registration procedure is the same as the establishment of an LLC by Russians. The only feature is the legalization of documents by apostille and notarization.

The establishment of an LLC is regulated by the provisions of the Federal Law "On State Registration of Legal Entities and Individual Entrepreneurs." Foreign citizens planning to register an LLC in Russia do not need a work permit, residence permit, or other permits. In addition, foreign owners of companies do not have to live in Russia.

Before proceeding to the registration of an LLC, a foreign citizen must:

determine the address of the company; This can be done either by concluding a lease agreement for non-residential premises or by contacting a specialized company that provides legal addresses for postal communication with the company.
select a candidate for the position of head of the LLC; The head of the company, unlike the founder, is an employee: he is subject to the norms of Russian labour law. You should take into account that a foreign citizen can be appointed to the position of the head of anLLC in the same way as to any other position, regardless of whether he is the founder of this LLC. If a foreigner wants to become the general director of an LLC, he must have a work permit or a patent. At the same time, according to the legislation of the Russian Federation, for some categories of foreigners, there is no need to obtain a patent or work permit in the Russian Federation when applying for employment in a Russian company: for foreigners who have a residence permit in Russia or a temporary residence permit on the territory of the Russian Federation; for foreigners who are citizens of the EEU countries (Republic of Belarus, Kyrgyzstan, Armenia, Kazakhstan).
choose the tax system; There are two types of tax regimes for companies in Russia — the general system and the special ones. For more information about tax systems, read taxes in Russia.

The next step in creating an LLC is to fill out an application form No. P11001. This form should contain information about the name of the new company, its address, passport data of the founder, head, and the types of activities. At the same time, it is not necessary to specify the address of the foreign founder’s residence in the Russian Federation. It will be enough to enter his address abroad in the appropriate column.

Thus, the basic package of documents for opening an LLC by a foreigner is:

a copy of the passport of a foreign citizen;
translation of the passport into Russian, certified by a notary;
completed application form No P11001;-articles of association of LLC;
the decision to create a company;
letter of guarantee with the address of the company’s location;-receipt of payment of the state fee;
notification of the transition to a simplified tax system if necessary. The company’s registration period will be 3 working days after submitting the documents to the authorized registration authority.

The company’s registration period will be 3 working days after submitting the documents to the authorized registration authority.

LLC in Russia can be established by a foreigner remotely, without his direct presence. To register a company as a foreign citizen, you must sign an application in the form No P11001, as well as a power of attorney to represent interests in Russia.

These documents must be signed in the presence of an employee of the Russian consulate or a foreign notary. If the documents are certified by a foreign notary, an apostille must also be affixed.

It should be noted that documents made on the territory of a foreign state and drawn up in the language of the relevant foreign state must be accompanied by a translation into Russian, certified by a Russian notary.

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