Business Start-Up Costs in Russia

There are several types of companies investors can opt for in Russia. The decision on the type of company entrepreneurs will open will impact the activity of the business, the taxes the company will be required to pay to the Russian authorities or the possibility to hire foreign personnel. An investor should know the Russian startups costs before starting a business in Russia.

Types of Russian startups

As mentioned above, several types of structures are available for those wanting to register a company in Russia. These are:

• -       the Russian limited liability company requires a minimum share capital of 10,000 rubles and a minimum of one up to 50 shareholders;
• -       the Russian joint stock company that can be open or closed. The open joint stock company requires a minimum share capital of 100,000 rubles, while the minimum share capital required for a closed joint stock company is 10,000 rubles;
• -       the Russian general or limited partnership;
• -       branch and representative offices of foreign companies in Russia.

The incorporation procedure for Russian startups

The registration procedure for a Russian company usually takes about a month and requires a few steps. In order to incorporate a company in Russia, the following documents must be submitted with the Russian Trade Register:

• -       the articles of association of the company
• -     a certificate of registration issued by the foreign Trade Register the company was first registered with;
• -       a statement of the company’s management board appointing the director or legal representative of the company in Russia.

The following steps will be:

-       the registration of Russian startups for taxation purposes that takes about 5 to7 days;

-       registration with the State Committee for Statistics that takes about 2 to 5 days;

-       registering the seal of the company that will take 2 to 5 days;

-       registration with the pension, health and social security funds;

-       setting up a bank account;

Branches and representative offices will require the following:

• -       register with the accreditation authority that will take around 14 to 20 days;
• -       making the company’s seal that will take about 2 to 5 days;
• -       register with the State Committee for Statistics that takes about 2 to 5 days;
• -       registration for taxation purposes that will last between 5 and 7 days;
• -       register with the pension, health and social security funds;
• -       setting up a bank account

The documents required for registering a branch or a representative office are:

• -       the articles of association of the parent company;
• -       the certificate of incorporation of the parent company issued by the Trade Register in the country of origin;
• -       a good standing certificate issued by the bank stating the foreign company’s solvency;
• -       a statement issued by the foreign company representing the decision of opening the branch or representative office and appointing the director;
• -       a power of attorney of the director or legal representative of the branch or representative office;
• -       certificate of registration for taxation purposes of the parent company.

We can also assist in obtaining EORI numbers for Russian companies.

Costs related to company registration in Russia

 When opening a Russian startup, clients will have to pay for:

• -       drafting and notarizing the articles of association of the company;
• -     the registration with the Federal Tax Service in order to obtain the identification number of taxpayer (INN) and a VAT number;
• -       notarizing the bank signature card;
• -       the company’s seal.

Other costs and registration fees may appear depending on the type of company clients want to set up, but our Russian lawyers can provide you detailed information related to business start-up costs.

Russian companies can opt to register for one of the two taxation systems in Russia:

• -       the traditional system made of the 20% profit tax, 18% VAT rate and the property tax that varies from region to region;
• -       the simplified taxation system made of 6% on all incomes or 15% on all incomes without the expenses and no VAT applied.

You can contact our lawyers in Russia for customized solutions for company incorporation of Russian startups.