Registration of individual entrepreneur in Russia

Contents:

• Can a foreign citizen register as a private entrepreneur in Russia?
• Legal requirements for foreigners begining a business
• Choosing a business form: a private entrepreneur or LLC
• How can a foreign citizen register as a private entrepreneur
• Registering a private entrepreneur with Valen company

Can a foreign citizen register as a private entrepreneur in Russia?

Can a foreign citizen registeras a private entrepreneur in Russia? LLC in the Russian Federation or not. The fugures show htat that the business activity of foreigners is higher than that of Russians.

As part of the Global Entrepreneurship Monitor (GEM) international project, a study was conducted that showed that foreigners in Russia are much more focused on their own business than Russians.

The level of entrepreneurial activity among foreigners is almost two times higher than among the local population – 7.4% versus 4%. But, foreigners believe in themselves more and generally are optimistic – 90% of them highly appreciate the possibilities of own business and their ability to create a really successful company.

Therefore we can say, that foreigners have do want to register a business in Russia, and they believe in own success and talent. But what about the options they have? There are no significant obstacles for foreign citizens when registering a business in Russia – the laws provide the same rules for everyone.

Legal requirements for foreigners begining a business

To register acompany, a foreign citizen must meet several conditions.

1. First, one should have a legal reason to be present within Russia. To fulfil this rule, a foreigner must obtain a residence permit, or a refugee status.
2. Secondly, a foreigner must obtain a work permit or patent.
3. Thirdly, a person must obtain a taxpayer identification number (TIN). This document is provided by the local tax service. All other procedures for registering a company for non-residents are the same as for Russians.

1. First, one should have a legal reason to be present within Russia. To fulfil this rule, a foreigner must obtain a residence permit, or a refugee status.
2. Secondly, a foreigner must obtain a work permit or patent.
3. Thirdly, a person must obtain a taxpayer identification number (TIN). This document is provided by the local tax service. All other procedures for registering a company for non-residents are the same as for Russians.

Choosing a business form: a private entrepreneur or LLC

Individual entrepreneurship (IE) and a limited liability company (LLC) are the most popular forms of business organization. With these two legal forms you can register a business as quickly as possible, and your are required a minimum of documents and financial expenses.

The IE status enables one to conduct business while not registering a company. That is the easiest way to register and run a own business, regardless of a person’s citizenship. Here are the main benefits of a private entrepreneurship:

• This form provides easy registration and liquidate,
• One can easily conduct all the accounting records and submit the required reports to local authorities.

In case every document required is made up correctly, the whole process of opening a new private entrepreneur takes about five days (considering weekends). Besides, they believe that the best taxation option for a private entrepreneur is a simplified system (STS). According to this system provides an entrepreneur pays either six per cent of the income, or up to fifteen of own profit (depending on a specific region).

But even individual entrepreneurship has its drawbacks. A private entrepreneur takes responsibility with all his/her property. This means that creditors potentially are able to sue a car, real estate, equipment, etc. for debts.

Another popular option for foreigners to start a business is a limited liability company. LLC is already a legal entity, therefore all procedures, in this case, are more complicated. However, there are advantages here as well. LLC allows several people to conduct business together, which means they can combine their financial, organizational, and other resources. If debts arise to creditors, they won’t claim the personal property of the founders of the LLC, but just the value of their shares in the authorized capital.

How can a foreign citizen register as a private entrepreneur

So, we found out that the easiest way for a foreigner to register own business in the Russian Federation is to register as a private entrepreneur. Let’s figure out what one has to do when deciding to register as a private entrepreneur.

As we have noted above, a foreigner must get a temporary residence permit (TRP), or a residence permit. Otherwise, the registration process for a private entrepreneur is the same for all the people, both native and foreigners. In fact, it consists of submitting documentation and paying all the fees.

So in order to open an individual entrepreneurs in Russia, do the following:

1. Fill in an application form;
2. Privide the copies of documents ( passport or ID);
3. Privide the copy of a birth certificate;
4. Privide the copy of a residence permit;
5. Privide the copy of a registration document in Russia;
6. Privide the receipt confirming that a registration fee was paid.

The registration for a private entrepreneur is 800 RUB. But in case you are going to pay it online, the registration cost is 30% cheaper. Besides the documents in foreign languages must be translated into Russian in a certified bureau. And the translated documents are to be certified by a notary.

So, this is what a foreign citizen has to do to register an IE. Considering the fact that documents are made up as they should, after five days you can obtain a certificate of state registration of a private entrepreneur.

Registering a private entrepreneur with Valen company

VALEN lawyers are experienced specialists. They will assist you with the registering IE in Russia, and all the issues concerning the process itself and with preparing for it. Please, feel free to leave your request on our website or contact our lawyers via telephone to get the first consultation. Or you can visit our office in Moscow.