Starting a Business in Russia: A Legal Guide for Foreigners

A foreign citizen or a foreign company can set up a business in Russia. The usual vehicle is a limited liability company (OOO), registered by the tax service within a few working days once the documents are in order. What slows people down is rarely the registration itself. It is the paperwork from abroad, the right to stay and work in the country, and opening a bank account.

Choosing a Vehicle: OOO, AO or a Representative Office

Most foreign investors pick an OOO. It can have one founder, the charter capital requirement is modest, and participants are not liable for company debts beyond their contribution, except in cases of abuse.

A joint-stock company (AO) suits many shareholders or a planned listing. It requires a registered share issue and a registrar.

A representative office or branch is not a separate legal entity. It acts for the parent company and must be accredited.

Registration Sequence Step by Step

1. Obtain and legalise the foreign documents: extract from the home register for a corporate founder, passport for an individual. Apostille or consular legalisation, then a certified Russian translation.
2. Get a Russian taxpayer number (INN) for the foreign individual founder or director.
3. Prepare the founding decision, the charter (or choose a standard charter) and the application form.
4. Confirm a legal address with a lease or the owner's letter of guarantee.
5. File with the tax service in person, through a notary or electronically with a qualified signature.
6. Receive the extract from the state register and the tax registration notice.

A notary is needed when documents are filed by proxy. Errors in the translation of names often lead to refusal.

Staying and Working as a Founder or Director

Owning a share does not by itself give the right to live or work in Russia. A founder who only holds shares may come on a business visa. A foreign general director is an employee of the company, so the company must obtain a work permit for him or use the highly qualified specialist route, which also gives family members residence rights.

Plan this in parallel with registration: banks check the status of the director.

Tax Regimes at the Start

An OOO pays corporate income tax and VAT under the general regime. A small business can apply for the simplified system, which replaces them with a single tax on revenue or on revenue minus expenses. There is a restriction: a company in which another legal entity holds a large share cannot use the simplified system, so a subsidiary of a foreign parent often falls outside it.

Dividends paid to a foreign parent bear withholding tax, which a double tax treaty may reduce.

Opening a Bank Account

Banks run a know-your-customer review of the company, its ultimate beneficiaries and the source of funds. Expect to show the ownership chain up to individuals and planned turnover. Currency control rules and special procedures for persons from certain states apply to capital contributions, so discuss them with the bank before you transfer charter capital.

Mistakes That Cost Foreign Founders Time

• A mass-registration address that the tax service later marks as unreliable.
• An apostille missing on one of the corporate documents in the chain.
• Hiring a foreign director before the work permit is issued. The employer faces a fine.
• Assuming the simplified tax system applies automatically.
• Signing a foreign-law shareholders' agreement without checking which provisions a Russian court will enforce.

Setting Up Your Company with Attorney E. V. Petrova

Attorney E. V. Petrova advises on the choice of vehicle, prepares the charter and corporate decisions, and coordinates filing, immigration and banking steps in the right order. Work begins with a review of your documents, after which you receive a list of what to legalise and a timetable.

The main channel of communication with the lawyer is email: lawyer@lawyer-moscow.com.