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Russia Holding Company

Russia Holding Company

Updated on Sunday 19th June 2016

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The holding companies in Russia are preferred because of the smaller administration prices and the facilities offered for using it. There are two types of holding companies: pure holding companies and operating holding companies.

The pure holding company is the one where the investors are acting only through the foreign company where the stocks are invested, while the companies that also conduct business by themselves, along with the company where the stocks are invested, are called holding-operating companies.

At least half of the value of the company’s outstanding stocks must be owned for more than a half of the financial year by another company in case of a holding company. Usually, the term used for the company that owns the majority of the stocks in another company is “the parent company”, while the term used for the company where the parent company has the majority of stocks is the subsidiary.

A major advantage of a holding company in Russia is that if the subsidiary is considered bankrupt, the parent company is not considered liable for the loss, if it didn’t sign the debt. The only thing that the company is losing is the invested money.

Types of holding companies in Russia

There are two forms of accepted holding companies in Russia: the limited liability companies and the joint stock companies.

A limited liability company and a closed joint stock company require at least 10,000 rubles to be registered, while the open joint stock company requires at least 100,000 rubles.

There are many reasons why a foreign entity is willing to open a holding company in Russia:

  • - establishing or improving the company image abroad,
  • - tax optimization,
  • - perfection of investment appeal,
  • - strengthening the safety and security of business assets and the corporate governance,
  • - cut the general expenses,
  • - safeguard of shareholders' interests,
  • - tracking the financial transactions,
  • - growth and keeping the company’s capital.

Special laws were adopted lately to encourage the foreign investors to open a business in Russia. If special sectors are approached by the foreign business, the investors may take advantage from some special regulations.

The following sectors are considered strategic by the Russian Strategic Investments Law:

  • - military industry,
  • - the nuclear industry,
  • - transport services (rail roads, the aviation industry, airports and marine ports, space activities),
  • - mass media.

Industrial activities, such as the development of subsoil fields, natural monopolies (oil and gas pipeline), are also under the Strategic Investment Law regulations.

The video below shows the steps for opening a holding company in Russia:

 

Setting up a holding company in Russia

The main laws regulating the establishment of holding companies are the Russian Civil Code and the Joint Stock Company Law and the Limited Liability Law, depending on the type of structure selected. In both cases the liability of the shareholders is limited to the amount of money they have contributed with at the registration of the business. This is one of the main reasons Russia is an advantageous destination for setting opening a holding company. The joint stock company must have a board of directors made up of at least 5 members and its name must state it is a public entity. Holding companies established as limited liability companies have a limited number of 50 shareholders.

Our lawyers in Russia will help you open a holding company and they will handle the entire procedure of registering the company.

 

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