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Russia Company Formation

Registering a company in Russia takes the following 8-stage process:

1. Have the foundation documents notarised, which takes a day and costs approximately 200 RUR per copy.
2. Deposit capital in the bank account and obtain proof that this has been done. This takes one day.
3. Pay the registration fee to the State Tax Inspectorate. This takes one day.
4. Register at the Ministry of Taxation of the Russian Federation, to obtain the state registration number and the tax registration number. This takes 18 days and costs approximately 2000 RUR.
5. Have the registration certificate, taxpayer identification number and bank signature card notarised. This takes one day and costs approximately 1200 RUR.
6. Open a company bank account. This takes 1 to 5 days dependent on the bank.
7. Within 10 days of opening the bank account, inform the Ministry of Taxation of the bank account number and obtain a confirmation letter, which takes 5 days.
8. Within 30 days after the state registration, the company needs to be registered with the Moscow Centre of Quotation of Work Places. This takes a day.

It is possible to incorporate in Russia in one of the following forms.

A Limited Liability Company

• Only one person is required to found the company
• The company delegates 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 fifty
• The company's financial statements must be filed in Russian (roubles)

An Open Consolidated Stock Company (with the suffix OAO)

• The company may 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 delegates the board of management that deals with the everyday operations and activity of the business
• The liability of the members is limited to the amount of capital invested
• The accounts and reports need to be done in Russian (roubles)
• The yearly statements will be audited in roubles by an auditor

A Closed Consolidated Stock Company (with the suffix ZAO)

This structure of business is not dissimilar to the open stock company, but with a couple of differences.

The company may not issue shares to the public and the consent of other shareholders is necessary for a shareholder to sell any of his shares in the company.

The following will be required to incorporate your company:

• Submit the registration form to the Registration Office accompanied with the Minutes of the Assembly of Foundation, Memorandum and Articles of Association
• Pay the registration fee and confirm that 50 % of share capital has been paid
• The incorporator must provide legalised documents for the initial subscriber, either a copy of passport for a natural person or the Articles of Association for a corporate body
• State registration of a legal entity
• Creation and registration of seal
• Creation of company bank accounts, which need to be made known the tax authorities within 10 days of opening
• Registration of shares (applicable to joint stock companies)

Offshore Companies

By choosing to incorporate an offshore company, business owners and investors can set-up a business outside the jurisdiction of its operations. Offshore companies are traditionally, but not exclusively, incorporated for lower fees and taxes. Business owners must abide the regulations of the offshore jurisdiction, and must not trade within the jurisdiction.

The benefits are vast. As aforesaid, reduced tax and fees are often big factors when considering offshore incorporation. A company may also choose and offshore location to:

• Simplify set-up and maintenance - entrepreneurs may find bureaucracy and red tape less of an obstacle in offshore jurisdictions

• Assume anonymity - the names of owners and directors are not for public record, and references to the company may only be made in its registered agent

• Ensure legal protection - for instance, some jurisdictions favour corporate governance, meaning a company is only liable to offshore laws as opposed to those in its areas of operation

• Protect assets - business owners may opt to arrange their assets and transactions in such a way that protects them from liability

Characteristics of an offshore company:

• Memorandum and Articles of Association

• Certificate of Incorporation

• Registered Office/Agent

• Shareholders / Members

• Directors / Managers

• Company secretary

• Statutory Register

• Bookkeeping

Traditional locations for offshore incorporation are tax havens, such as the British Virgin Islands, Panama and Monaco. Other favoured areas include India, the Bahamas, Dubai, the Cayman Islands, Cyprus, Seychelles, Marshall islands, Delaware, Turks & Caicos Islands, Hong Kong, Jersey, Guernsey and the Isle of Man.

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