Registration of LLC by a foreign citizen in Russia
According to the Russian legislation, both foreign legal persons and individuals may create limited liability companies in the Russian Federation. Moreover, an LLC may be established by a foreign citizen independently, or jointly with citizens of the Russian Federation.
Procedure of registration of an LLC for foreign citizens is almost the same as a similar procedure for Russian citizens. The only difference is the need for a foreigner to have a notarized translation of his passport in Russian.
1. Establishment of LLC by a foreign citizen in Russia: procedure
Establishment of LLC is regulated by the provisions of the Federal law "On state registration of legal entities and individual entrepreneurs". Foreign citizens planning to open an LLC in Russia do not need to have a work permit, residence permit, as well as other permits. In addition, foreign founders of companies do not have to live in Russia.
Before the preparation of documents for the registration of LLC, a foreign citizen shall:
A. Determine the address (location) of the company being created
This action may be done both by concluding a lease agreement for non-residential premises, and by hiring a specialized firm that provides legal addresses for postal communication with the company.
B. Choose a candidate for the position of GM of the created LLC
GM, unlike the founder of the company, is an employee: he is subject to the Russian labor legislation.
It is important to take into account that a foreign citizen can be appointed to the position of GM in the same way as to any other position, regardless of whether he is the founder of this LLC. If a foreigner wants to become GM of an LLC on his own, he needs to have a work permit or a special patent.
Thus, according to the legislation of the Russian Federation, the following categories of foreigners do not need a patent or a work permit in Russia for employment in Russian companies:
- foreigners who have a residence permit in Russia or a temporary residence permit in the territory of the Russian Federation;
- foreigners who are citizens of the EAEU countries (Republic of Belarus, Kyrgyzstan, Armenia, Kazakhstan).
B. Choose the applicable tax system
There are two taxation regimes of companies in Russia - general and special.
An organization using the general tax regime shall:
1) Keep accounting records;
2) Submit accounting and tax reports to the tax authorities;
3) Pay basic taxes – value added tax (VAT) and income tax.
Special tax regimes are designed to make more comfortable conditions for small businesses. And the simplified tax system (USN) is the most common of the special regimes, since it replaces income tax, property tax of organizations, as well as value added tax (VAT).
To apply USN LLC should meet the following criteria:
1) share of participation of other organizations (including foreign ones) in the charter capital - no more than 25%;
2) level of income should not be more than 150 million rubles (2.14 mln EUR) per year;
3) average number of employees – no more than 100 people;
4) remaining value of fixed assets – no more than 150 million rubles (2.14 mln EUR).
Next step in creating an LLC is filling out of the application form no. R11001. This form should include information about the name of the created company, its address, passport data of the founder, company’s GM and prospective types of economic activity.
Indication of the address of residence of the foreign founder in the Russian Federation is not required. It will be enough to enter his address abroad in the appropriate column of the form.
Thus, the basic package of documents for opening an LLC by a foreigner is as follows:
- passport copy of a foreign citizen;
- translation of the passport into Russian, certified by a notary;
- completed application form no. R11001;
- Charter of LLC;
- decision to establish a company;
- guarantee letter on the address of the company's location;
- receipt of payment of state duty;
- notification of the transition to a simplified tax system (if necessary).
The term of registration of the company will be 3 working days after submission of documents to the authorized registration body.
2. Registration of LLC by a non-resident of the Russian Federation without personal presence in Russia
LLC in Russia can be established by a foreigner remotely, without his direct presence. To register company foreign citizen needs to sign an application form no. R11001, as well as a power of attorney to represent interests in Russia.
These documents shall be signed in the presence of an employee of the Russian Consulate or a foreign notary. In the case of certification of documents by a foreign notary, an apostille must also be affixed.
It should be noted that documents made in the territory of a foreign state and drawn up in the language of the relevant foreign state must be accompanied by a translation into Russian, certified by a Russian notary.
VALEN will help to draw up documents for foreigners who do not live in the Russian Federation and do not have the opportunity to come to Russia for self-registration of LLC.
VALEN offers a wide range of consulting and legal support services for foreign citizens interested in doing business in Russia. We offer comprehensive support to legal entities and individuals who want to establish an LLC, help with the paperwork and submission of the documents to official authorities.
VALEN will help you in resolving of non-standard situations that may arise at the initial stage of creating a business in Russia, as well as in the future.
Please feel free to contact us.
Our phone number: +7 (495) 7-888-096