Purchase a Company in Russia
Purchase a Company in RussiaUpdated on Tuesday 06th February 2018
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If you want to start a business in Russia, you can decide on opening a new company, that may take between three and six weeks, or you can save time and buy a ready-made one.
In Russia you can buy a few types of ready-made or shelf companies. The most common types are the limited liability company (OOO) and the private (or closed) joint stock company. These types of companies have already been formed and they can be sold. A Russian shelf company has a founder, a director and a registered office and it is registered for VAT as well.
Our lawyers in Russia can help you register a new company in this country.
The process of buying of a Russian shelf company
Both individuals and legal entities can purchase a shelf company in Russia. The purchase is made by signing a share or stock (depending on the type of company) purchase agreement. After the purchase, the new owner will inform the relevant authorities about the changes brought to the company. In Russia a company must be bought completely, as the term “beneficial owner” is not accepted in Russia.
The shelf company in Russia has a general director, considering the Russian Company Law does not recognize the term nominal director, as other countries. This means the director of the company will be held fully liable for the business’ operations and he or she will have absolute power in the management of the company. Even if the director will give power of attorney to a third person, the liability cannot be transferred to this third person.
Changes which can be made when buying a company Russia
After purchasing a shelf company, the new owner should make all the preparations:
- - register the new owner or owners,
- - naming a new general director,
- - move the company and register its new address,
- - pay all the taxes.
After all changes have been made, an application stating the changes must be signed by the previous director of the company and submitted with the authorities. The application will be signed in front of a public notary.
The address of the new company cannot be a residential one, as it is restricted by the law to use a residential address for company registration. The company must have a physical address, as in Russia it is a common practice for the authorities to check the location.
The accounting and tax reports must be submitted with the authorities before purchasing the company as Russian companies do not have dormant accountancies. According to Russian laws, the director of a company must gain a salary, therefore before making a purchase, one has to make sure there are no tax liabilities.
Why purchase a shelf company in Russia?
There are several advantages which can be offered by a Russian shelf company. Apart from the fact that the company is already incorporated and has tax and VAT numbers, foreign investors can start their activities as soon as all the formalities are completed.
Not only natural persons can acquire shelf companies, but foreign entities can also purchase such business in order to incorporate their existing history into the Russian company. Owning a local company is more advantageous when seeking to enter the market as it can attract more clients and thus more profits.
Apart from these, foreign investors can also apply for corporate loans with Russian banks and obtain financing in a faster manner.
There are other ways in which a foreign investors can purchase a Russian company, such as mergers and acquisitions, however these procedures are more complicated and involve higher costs and more time.
If you need help in purchasing a company, our law firm in Russia can provide you legal assistance.