Register your business
Forms of legal entities
A Public
A Closed
Limited liability Companies
Minimum amount of statutory capital
Other forms of commercial organisations
Conducting activity on behalf of foreign organisations
(information is compiled in cooperation with vfbs.ru)
The Civil Code, which was introduced by the Federal Laws
The Code distinguishes between commercial and
– public
– private
– limited liability company (obshchestvo s ogranichennoj otvetstvennost’ju, OOO)
– additional liability company (obshchestvo s dopolnitel’noj otvetstvennostju)
– general partnership (polnoe tovarishchestvo)
– limited partnership (komanditnoe tovarishchestvo)
– industrial cooperative (proizvodstvenyj kooperativ)
– state and municipal unitary enterprise (gosudarstvennoe i municipal’noe unitarnoe predprijatie).
In addition to the
The most important forms of legal entities are the limited liability company, the private
Foreign investors may establish companies which are fully foreign owned in any form, with the exception of unitary enterprises. Foreign companies may also register representative offices (for auxiliary and preparatory activity) or branch offices (for commercial activity). Please refer to the table comparing the most commonly used types of entities and offices.
The form of legal presence in Russia which your business takes will influence every aspect of the work that you do. Your choice of legal presence will have an impact on the deals you are capable of making and the tax consequences of those deals. It will affect your financial and tax accounting and reporting. It will affect what you are capable of doing as far as customs are concerned, currency control legislation, your ability to employ foreign nationals, the repatriation of income, the application of international treaties and a whole range of other aspects. Therefore, particular attention must be paid to Russian business modeling PRIOR to setting up a legal presence in Russia.
Business in Russia may be conducted in various forms, involving setting up a legal entity or not. Principal forms of commercial organisations legal entities are
A Public
- The company may issue and offer shares to the public.
- A shareholder may sell his shares without the consent of the other shareholders.
- The company is managed by a board of directors.
- The board appoints the «board of management» that deals with the everyday management and operation of the Company.
- The liability of the members is limited to the amount of capital invested.
- The accounts and reports will be prepared in Russian.
- The annual statements will be audited in roubles by an auditor.
A Closed
- This class of company is similar to the open stock company with a number of differences.
- The company may not issue shares to the public.
- The company may not issue shares to the public.
- The consent of other shareholders is necessary for a shareholder to sell any of his shares in the company.
The open form is the only one for companies established during privatisation and for holding companies. Legislation does not restrict foreign entities’ participation in
Limited liability Companies (abbreviated OOO)
- No more than one person is required to found the company.
- The company appoints two bodies of management, a «board of directors» and a «board of management».
- The liability of the owners of the company is limited to the amount of capital invested.
- The maximum number of shareholders is 50.
- The company’s financial statements must be filed in Russian (roubles).
Limited liability societies (OOO) are simpler to organise and manage than
Minimum amount of statutory capital
- Limited liability company and closed
joint-stock company: 100 times the minimum monthly pay - Public
joint-stock company: 1,000 times the minimum monthly pay
Contributions to statutory capital may be made in Roubles or in foreign currency. If contribution to statutory capital is made in the form of property to the amount exceeding 200 times the minimum monthly pay, it should be appraised by an independent appraiser (auditor). Foreign investor’s contribution to statutory capital made by fixed assets imported to Russia’s territory is exempt from import duties and VAT.
Other forms of commercial organisations
The Civil Code of the RF stipulates establishing commercial organisations in other forms: superadded liability companies, partnerships (full and in commandam), production cooperatives, state and municipal unitary enterprises. Such organisations are legal entities and are subject to taxation as companies. These forms may be effective only for specific types of business. Russian legislation also provides for conducting business in
Conducting activity on behalf of foreign organisations
Foreign companies may conduct activity in Russia without establishing daughter Russian companies via branches and representations. Branches and representations of foreign entities are not viewed as resident legal entities. Ideally, representations may carry out only auxiliary and introductory functions, but practically they conduct commercial activity as well, and in this case they are taxed in the same order as resident companies(with due account to double taxation treaties).
For visa support,
Branches of foreign legal entities are not a popular form of conducting business in Russia, as a number of taxation and accounting points relating to branches have not yet been made clear. Generally, for taxation purposes branches are equated with Russian legal entities.
Natural persons conducting business
Russian and foreign citizens may conduct entrepreneurial activities without forming legal entities. In order to do so they must be included into the Unified State Register of individual entrepreneurs kept by tax bodies. Special taxation rules are applied to such natural persons
There are over 30 forms of
