Incorporation of a Company of Limited Liability in Russia wholly owned by Foreign Physical or Legal Entity
The company name is acceptable in either Russian (Cryllic) or English. If in Russian, the name will begin with the abbreviation A.O. (Company Limited by Shares), and if in English, will be followed by the abbreviation J.S.C. (Joint Stock Company). The name cannot include the words “Insurance” or “Bank”. A special licence is required if the words “Moscow” or “Russia” are included in the name of the company.
The minimum share capital of the company is 63,500,000 rbs (about US$12,750), and there is no maximum capital. Fifty percent of the share capital should be paid up by or before the time of incorporation, with the remaining fifty percent payable within one year of the date of incorporation. Companies with high levels of capitalisation require special permission from the Anti-Monopoly Committee of the Russian Federation.
A company should have a minimum of two shareholders, being either legal entities or persons. Their names appear on public records.
There is a requirement for a registered office to be maintained in Russia. ICSG can provide this service for its clients.
There is a minimum requirement of one Director. The Director or a Board of Directors (if more than one) must appoint a Chief Accountant. There is no maximum number of directors. The shareholders appoint a Company President, and the President is responsible for organisation of Shareholders’ activity, holding meetings etc.
A company must keep proper books of account in order to give a true and fair view of the state of the company’s affairs and explain its transactions. Once a year a company must be audited. It will therefore be necessary to produce a full set of audited accounts to the taxation authority.
The Russian company may only have one current bank account which must be held with a Russian bank. A minimum of two persons should be authorised to sign the account mandates/instruction (one of them being a Director and the other – the Chief Accountant or his deputy).
The Russian company will pay income tax at the rate of 32%. Federal and Municipal taxes, which vary according to the levels of capitalisation are also levied. As the total taxation level is rather high, it is reasonable to use Russian companies as corporate representatives or agents, in order to reduce this fiscal burden.
The following documents are required for the company incorporation:
A. For Legal Entities:
- Apostilled copy of Memorandum and Articles of Association;
- Apostilled copy of a letter from the bank confirming that the legal entity has a bank account;
- Apostilled copy of Certificate of Incorporation;
- Apostilled copy of a Power of Attorney in favour of a certain person enabling him “to establish companies, sign documents and represent company interests on behalf of the Subscriber.
B. For Persons (acting as Subscriber)
- Apostilled passport copy;
- Apostilled letter from his bank;
- Apostilled copy of Certificate of Registration as a businessman, or other reference showing business occupation, in the country of his residence.
The above documents should be notarised and apostilled and produced in two copies or sets. One set will be translated into Russian and notarised.
Term of Incorporation
A Russian company can be incorporated within 2-3 weeks (including opening of a bank account).
Total First year costs of company incorporation in Russia is US$5,000 (including opening of bank account, domiciliary services etc.). The ongoing annual charge for the provision of registered office is US$3,000 per annum.
Please note that clients must nominate their chosen directors and accountants prior to incorporation as we do not provide these services under any circumstances. However our staff will, in certain instances, stand as the attorney to the parent company with limited mandate in order to execute all registration documents.
We can however provide auditing services by a licensed Russian audit company for a separate fee.
Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any error or omission.