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Russia is one of the largest countries in the world, covering an area of 17,098,242 sq km and is rich in natural resources. Stretching across the continents of Europe and Asia, the climate varies from; Arctic and sub-Arctic in the North with temperatures reaching -70 ° C (-40 ° F), Subtropical in the Southern areas with temperatures reaching 50 ° C (122 ° F) and a temperate climate in the rest of the country. Due to the vastness of the territory Russia is divided into eleven time zones, the lowest point is the Caspian Sea at -28m and the highest point is Gora El’brus at 5,633m. The capital city is Moscow with a population of 10.4 million.
The population is approximately 143 million. 73% of the population resides in urban areas and are made up of over 180 ethnic groups.
Russia if a federal presidential republic established by Constitution on 12th December 1993. The Head of State is the president, who is elected by popular vote for a four year term. The State power is made up of three branches: executive, legislative and judicial. Russia is comprised of 83 federal subjects: 21 republics, 9 krays, 46 Oblasts, 2 federal cities, 1 autonomous oblast and 4 autonomous okrugs (districts), Okrugs are headed by a representative appointed by the president.
Russian is the official and spoken language although English is widely known.
Registered Russian companies or citizens may require a licence or the permission of the Central Bank to conduct certain operations. Special bank accounts (type "I", type "T" etc. available in any bank) maybe required and must be maintained in Russia.
A legal entity is considered to be incorporated as at the date of its state registration i.e. the date entered into the Unified State Register of legal entities. Until 50% of the company’s shares are paid a company does not have the right to enter into any transaction other than those associated with its foundation.
NB: the above list is not exhaustive, for full details please contact an office of OCRA Worldwide.
A number of activities must be licensed by the appropriate government authority (banking, insurance services etc.). These are listed under Federal Law No 128-FZ. The licensing process may be time consuming and demanding with regard to the documentary requirements.
A Company incorporated in Russia has the same powers as a natural person.
Russian; all foreign documentation must be translated to Russian and legalised.
Yes, but in several cases these companies can be more expensive and may lose their tax-exempt status.
Yes. It must be maintained in Russia.
Between three to six weeks if all documentation is complete and in accordance with statutory requirements at date of submission.
Any name containing word "bank". Special permission and the paying of a fee are required for using the word "Russia", or names of regions and cities.
Company name must be in Russian. A company may have its name translated to any other language if provided for in the Articles of Association.
Limited Liability Company (LLC/ OOO) Private Limited Company (Pr.LC/ZAO), Public Limited Company (Pub.LC/OAO). NB: the suffix appears before the company name.
Shares must be registered to a person or entity regardless of type of company.
* may not be less than 100 times the minimum monthly wage (MMW)
^ may not be less than 1000 times the minimum monthly wage (MMW)
Joint Stock Companies (OAO / ZAO) may issue common or preferred shares and debentures. The nominal value of issued preference shares may not exceed 25% of the JSC charter capital.
Shares in a Joint Stock Company are considered as “securities” under the Russian Securities Law and must be registered with the Federal Service for Financial Markets at the time of issuance to enable the shares to be traded either publicly (OAO) or among a limited number of persons (ZAO), this procedure may take up to 30 days.
Limited Liability Companies cannot issue shares; the capital is divided into “participation” or “units” (“Dolia” in Russian) which are not considered as securities under the Russian Securities Law. LLC participants are not liable for the limited liability companies obligations and participant's losses are limited by the value of the participation units held.
The minimum number of shareholders/participants is one. A company with one shareholder/participant cannot be the sole shareholder/participant of another company. The maximum number of shareholders/participants are:
One Director is sufficient if the number of shareholders is less than fifty. If there are fifty or more shareholders, the Board of Directors must consist of two or more members.
Directors are not obliged to have permanent residence in Russia. Permission of Migration Service is necessary for foreign Directors and employees.
None; except for regions with regional tax exemptions.
Some activities (e.g. casinos) pay quarterly or annual fees, but are free from other taxes and fees.
Corporate tax is payable in Russia on the profits of Russian legal entities (on their worldwide profits) and foreign legal entities carrying out business activities in the Russian Federation (part of the worldwide income of foreign entities received from activities of a permanent establishment may also be subject to profits tax in Russia), less tax deductible expenses and loses.
The profit tax is 24% and consists of a federal tax of 6.5% and regional tax 17.5%. Regions have been granted authority to reduce the regional rate to 13.5% for certain types of taxpayers (lowering the profit tax rate to 20%). The tax period is a calendar year; the reporting period may vary depending on the system used by the taxpayer.
Prior to 2012 there was a limited consolidation or group relief to tax purposes which each company within the group being a separate taxpayer. From 1st January 2012 Russian companies within a group of at least 90% direct or indirect ownership, may file a consolidated return if the following conditions are met.
The corporate profit tax is 20% (2% of this amount is payable to the central government and the remaining 18% is due to the regional government). Regional governments may at their discretion, reduce the regional element to 13.5%..
The tax period is a calendar year; the reporting period may vary depending on the system used by the taxpayer.
Taxes may be categorised as:
VAT rate is 18% (10% for certain of goods e.g. medical goods, books). Export of goods is subject to VAT at 0%.
Russia has over 60 double taxation agreements, including agreements with: Albania, Algeria, Argentina, Armenia, Austria, Azerbaijan, Belgium, Belarus, Botswana, Brazil, Bulgaria, Canada, China, Chile, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, Iceland, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Khazakhstan, Korea, Kyrgyz Republic, Kuwait, Latvia, Lebanon, Lithuania, Luxembourg, Macedonia, Malaysia, Mali, Mexico, Morocco, Moldova, Mongolia, Namibia, Netherlands, New Zealand, North Korea, Norway, Poland, Portugal, Philippines, Qatar, Romania, Saudi Arabia, Serbia & Montenegro, Singapore, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Syria, Tajikistan, Thailand, Turkey, Turkmenistan, Ukraine, United Kingdom, United States of America, Uzbekhistan, Venezuela, Vietnam.
Accounting is regulated by the Federal Law on Accounting, the Civil Code of the Russian Federation, The Federal Law on Governmental Support of Small Businesses in the Russian Federation and Federal Laws on Joint Stock Companies and on Limited Liability Companies. All companies are required to maintain their accounting records in accordance with these regulations and retain the accounts for a minimum of five years.
Auditing companies and individual auditors must be licensed and obtain a qualification certificate confirmed by the Ministry of Finance.
If a company has net assets less than the minimum charter capital required by law for two consecutive years, the company is subject to liquidation.
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