Creating a Joint Venture in Russia
Creating a Joint Venture in RussiaUpdated on Thursday 13th October 2016
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A joint venture is a business partnership concluded between two or more parties on a definite period of time. Also, the joint venture implies a single project the parties can work on. Russia is one of the countries creating the best legal frameworks for foreign investors to create joint ventures with local ones. The Civil Code is the one recognizing joint ventures in Russia, as these types of businesses have no correspondent in the Commercial Law. Russian joint ventures are also allowed to operate outside the country, provided that they obtain special licenses with the relevant authorities.
Types of joint ventures in Russia
Russia allows for foreign companies or investors to set up joint ventures with local ones without incorporating a new company: this is the contractual joint venture. However, in 2012 the State Duma issued a new legislation providing for investment partnerships which also covers joint ventures. Our lawyers in Russia can offer more information on the Investment Partnership Law.
The second and the most employed type of Russian joint venture is the corporate one. The following types of structures can be used to set up a corporate joint venture in Russia:
- - limited and unlimited partnerships;
- - limited liability companies;
- - additional liability companies;
- - joint stock companies.
The recently enabled economic partnership can also be used to create a joint venture in Russia.
The video below also shows how to set up a joint venture in Russia:
The joint venture agreement in Russia
All joint ventures fall under provisions of the Russian Civil Law which establishes that this type of business relations can begin once an agreement is concluded. These agreements are known as joint venture contracts and will be governed by the Civil Law where they were issued. The new Civil Code in Russia has added specific requirements to joint venture agreements which now are subject to stricter conditions. One of these conditions refers to the representative of a foreign party in the joint venture to obtain power of attorney when acting on behalf of the company. Those setting up joint ventures in Russian must also pay attention to the provisions of the Competition and Antitrust Laws.
For complete information on how to establish a joint venture, please contact our Russian law firm.