Russian legal entity

Subdivision of a foreign company

Limited liability company (LLC)

Private joint stock company (PJSC)

Representative office (RO)

Branch

Legal Status

LLC and PJSC are Russian legal entities. They may conduct any form of commercial activity, provided it is not prohibited by the Russian legislation. For conducting any licensed type of activity it is necessary to obtain license.

The number of shareholders/participants in PJSC/LLC can not exceed 50. Any Russian and foreign companies and persons may be founders and shareholder in any number of Russian companies. The company may be established by a single founder, as long as the founder is not a company owned by a single legal entity or individual. Some peculiarities exist for the companies with single founder. For more detailed information please see Sole ownership

RO and Branch of a foreign legal entity are not considered as a separate legal entity. RO and Branch are subdivisions of a foreign company. They are considered as Russian non-resident entities for currency control purposes

RO is a subdivision of a foreign legal entity that represents the company’s interests in Russia. ROs officially are not allowed to undertake commercial activity, in Russia.

Branch is a subdivision of a foreign legal entity that may conduct commercial activity.

Registration and Accreditation

Registration is done by the Tax authorities, which keep the United State Register.

Company also shall be registered with State Committee for Statistics and three non-budgetary funds (Pension fund, Obligatory Medical Insurance fund and Social Security fund).* Please also see Registration process and list of documents

ROs and Branches may be accredited at several state bodies, such as State Registration Chamber (GRP), Chamber of Trade and Commerce and various Ministries of the Russian Government, although the Consolidated State Register of ROs and Branches is kept by GRP. ROs and Branches also shall be registered  with the Tax authorities, State Committee for Statistics and three non-budgetary funds (Pension fund, Obligatory Medical Insurance fund and Social Security fund). Please also see Registration process and list of documents

Registration and Accreditation duties and charges

Registration duty is 4000 rubles (~100 Euro).

There are also charges for registration of company’s seal, registration at State Committee for Statistics, which amount in general to no more than ~80 USD.

Accreditation charges of the GRP depend on the term for which a RO is set up

1 year – 1000 USD

2 year – 2000 USD

3 year – 2500 USD

Accreditation charges of the GRP depend on the term for which a Branch Office is set up
1 year – 700 USD
2 years – 1200 USD
3 years – 1700 USD
5 years – 2200 USD

There is also a state duty which is also 120,000 rubles (~3000 USD).

Authorized capital

Minimum authorized capital for LLC and PJSC is 10,000 rubles (~250 USD)

There is no requirement for the authorized capital.

Under the Federal law there is a requirement to form assets, but the amount is not stipulated.

At least 50 per cent of the authorized capital shall be paid-up prior to the company’s registration.

50 per cent of the authorized capital shall be paid-up within 3 months upon the registration.

Management structure

LLC and PJSC may have a three-tier management structure consisting of (1) the general meeting, (2) the board of directors, and (3) the executive body**.

General meeting is the highest management body and it must meet at least once a year.

Board of Directors effects general supervision of the company’s business activities which are not referred to the competition of the General meeting

Executive body of a company may be represented by both an individual and collegial body.  The executive body acts pursuant to the Charter document and doesn’t need a POA.

For both the RO and Branch an executive body (Head of RO or Branch) should be appointed by the foreign legal entity. Such executive body acts pursuant to the Power of Attorney issued by the foreign legal entity.

Shares/Units

Authorized capital is divided into shares/units which represent rights and obligations of a shareholder/participant in accordance with their participations in the authorized capital.

Non applicable

A unit is not a security.

The units can be sold to anyone, but there can be stipulated right of priority for the unit purchase.

A share is a security.

Public subscription is prohibited for PJSC.

The shares allotment shall be registered with the relevant state body.

Accounting and Tax Compliance

Companies shall file accounting and tax reports with the tax authorities on a quarterly basis. Reports on VAT shall be filed every month. For more information please see Reporting compliance table

There is almost no distinction between a Branch (or taxable RO) and Russian legal entity in terms of tax compliance. RO which carry out auxiliary and marketing activity also should submit reports on their activities and possible income and all reports related to payroll and social taxes. Reporting is generally done every quarter with exception for VAT (monthly) to the special Tax inspectorate, which deals only with RepOffices and Branches. For more information please see Reporting compliance table

Foreign Staff

In order to employ foreign nationals, except for visa-free countries, a company shall obtain Employment permit. Afterwards every foreign employee shall obtain personal work permit. A work visa is also required. For more detailed information please see Employment of foreign citizens

RepOffices and Branches of foreign companies have to obtain Employment permit. Every foreign employee also has to obtain personal work permit. A foreign employee visa (subtype of work visa) is required. For more detailed information please see Employment of foreign citizens