Russia is one of the largest countries in the world, covering an area of 17,075,400 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 Elbrus at 5,633m. The capital city is Moscow with a population of 10.4 million.


Approximately 143 million. 73% of the population resides in urban areas and are made up of over 180 ethnic groups.

Political Structure

Russia if a federal presidential republic established by Consitution 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 86 federal subjects: 21 states, 7 territories, 47 regions, 2 federal cities, 1 autonomous region and 7 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.


Russian Rouble.

Exchange Control

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.

Type of Law

Civil Law.

Principal Corporate Legislation
  • Limited Liability Companies Act, 1997.
  • Limited Companies Act, 1996.
  • Civil Code of Russia, and law no. 14-FZ On Limited Liability Companies 1998 (LLC Law)
  • Foreign Investments Act, 1999. Determines the differences in opening and operating the companies incorporated by non-residents.
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Type of company for international Trade and Investment
  • Limited Liability Company (obschestvo s orgranichennoy otvetstvennostju OOO)
  • Closed Joint Stock Company (CJSC) (zakrytoe aktsionernoe obschestvo ZAO) privately held shares
  • Open Joint Stock Company (OJSC) (otkrytoe aktsionernoe obschestvo OAO) - publicly held shares

Procedure to Incorporate

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 companys shares are paid a company does not have the right to enter into any transaction other than those associated with its foundation.

  • A registration form is submitted to the Registration Office accompanied by the Minutes of the Assembly of Foundation, Memorandum and Articles of Association.
  • The applicant must pay a 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
  • Opening of Bank Accounts which must be notified to the tax authorities within 10 days from the date of account opening for each account.
  • Notification of antimonopoly bodies of foundation
  • Registration of Shares (joint stock companies)

NB: the above list is not exhaustive, for full details please contact an office of OCRA Worldwide.

Restrictions on Trading

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.

Powers of Company

A Company incorporated in Russia has the same powers as a natural person.

Language of Legislation and Corporate Documents

Russian; all foreign documentation must be translated to Russian and legalised.

Shelf Companies Available

Yes, but in several cases these companies can be more expensive and may lose their tax-exempt status.

Registered Office Required

Yes. It must be maintained in Russia.

Time to Incorporate

Between three to six weeks if all documentation is complete and in accordance with statutory requirements at date of submission.

Name Restrictions

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.

Language of Name

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.

Registered Office Required

Yes. It must be maintained in Russia.

Suffixes to Denote Limited Liability

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.

Disclosure of Beneficial Ownership to Authorities

Shares must be registered to a person or entity regardless of type of company.

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Authorised and Issued Share Capital

* may not be less than 100 times the minimum monthly wage (MMW)

^ may not be less than 1000 times the minimum monthly wage (MMW)

Classes of Shares Permitted

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:

  • CJSC (ZAO) - fifty
  • OJSC (OAO) - open to the public
  • LLC (OOO) - fifty
Board of Directors

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.

Company Secretary

Not required.

Licence Fees

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.

Prior to 2012 there was 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:

  • Minimum tax payment of RUB10 billion for the previous tax year
  • Group Revenue must be in excess of RUB 100 billion
  • Assets must be RUB 300 billion or more

The corporate profit tax is 20% (2% of this amount is payable to central goverment and the remaining 18% is due to the regional goverment). Regional goverments 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 bu the taxpayer.

Taxes may be categorised as:

  • Federal Taxes applied throughout the Russian Federation at uniform rates e.g. VAT
  • Federal Taxes applied throughout the Russian Federation at rates determined by the Tax Code and which may be reduced by regional government authorities e.g. corporate profits tax
  • Local/Regional Taxes locally collected taxes e.g. property tax

VAT rate is 18% (10% for certain of goods e.g. medical goods, books). Export of goods is subject to VAT at 0%.

Double Taxation Agreements

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, Indonisia, 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, Turkey, Turkmenistan, Ukraine, United Kingdom, United States of America, Uzbekhistan, Venezuela, Vietnam.

Financial Statement Requirement

Accounting is regulated by the Federal Law on Accounting, the Civil Code of the Russian Federation, The Federal Law on Govermental 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.

  • The Federal Law on Audit requires the following entities to have annual audits:
  • Open Joint-Stock Companies.
  • Listed Companies.
  • Companies Participating professionally in the stock market
  • Credit or Insurance Companies
  • Companies (except for agricultural co-operatives and unions) whose annual earnings exceed RUB 400,000 or the value of the assets on the balance sheet for the previous year exceeds RUB60,000,000
  • Companies with consolidated financial reports
  • Companies for which audits are compulsory under other Federal Laws

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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    professional advice. OCRA Worldwide does not accept any responsibility, legal or otherwise, for any errors or omission.