Registration of LLC by foreigners in Russia
The law allows the establishment of limited liability companies in Russia by citizens as well as foreign individuals and legal entities from abroad. The establishment of the companies is also possible for Russian individuals as well as groups. The process for registering LLCs for foreigners is partly different from the process for citizens of the Russian Federation. Foreigners also need a notarized translation of their passport in Russian.
1. The establishment of a limited liability company by foreigners in Russia
Neither a residence permit, a work permit nor any other type of permit are required for the establishment. This applies to both individuals and companies. A permanent residence in Russia is also not necessary for foreigners to register a company.
Below is an overview of the process up to the registration of the LLC by foreigners
A. Positioning the company
In the beginning it is necessary to have an address for the company to be founded. This can be done either by signing a lease for an office building or by commissioning a company to provide legal addresses.
B. Appointing a candidate as GM for the company
The GM, unlike the founder of the company, is employed by the company. This in turn is subject to labor legislation in Russia. It is also entirely possible for both a Russian citizen and a foreigner to be appointed as GM of the company. In the case of a foreigner, it is also important to ensure that he or she first needs a work permit or a patent. However, there are a few exceptions where neither a work permit nor a patent is required:
- If you have a residence permit in Russia (including a temporary one)
- For citizens from EAEU countries (Armenia, Kyrgyzstan, Kazakhstan and the Republic of Belarus).
The creation of the company’s articles of association is one of the most important steps in starting a company in Russia. This also prevents any discrepancies between shareholders and their rights later on. According to the law, the company charter must contain, among other things, the name of the founded company and a legal address. This is true at least when opening a limited liability company. Afterwards, a decision has to be made regarding the foundation.
C. Choice of tax system
When starting a business in Russia, you can choose from two tax systems: the general and the special tax system.
The general tax system becomes necessary when the company keeps accounts, has to submit tax reports and an accounting summary to the tax authorities and also when property taxes, such as income tax and VAT, are paid. The special tax system is intended for smaller companies. It is not necessary to pay income tax, property tax or VAT.
Registering a company as a sole proprietorship is both the easiest and cheapest option. Only a few documents are necessary for this. The process of the application is also particularly quick and even your own presence is not required. It should only be noted that with this type of business you are liable for the company’s own property.
For USN LLC to apply, the following criteria must be met:
- The company cannot employ more than 100 workers.
- The share in other organizations that are in charter capital may not exceed 25%. This also applies to foreign organizations.
- The annual income must be less than 150 million rubles. The residual value of fixed assets must also be less than 100 million rubles.
- If all the criteria are met, the application form (No. R11001) is filled out.
It is important that all information about the company, such as the name, address and personal data of the founder, is entered. If the company founder has a residential address in Russia, this does not have to be included in the application. It is sufficient to enter the actual address in their home country.
All the documents required to open a limited liability company are listed here:
- Copy of the identity document for foreigners with a notarized translation
- Reason for founding the company
- Charter of LLC
- A letter of guarantee on the companies address
- Completed form (No. R11001)
- Receipt of payment of state duty
- Notification of any change from special to general tax system
It will take approximately three days for the company to be registered after all required documentation has been submitted.
2. The establishment of a limited liability company by foreigners in Russia (in the absence)
It is still possible to register a limited liability company if you are not in Russia yourself as a foreigner. For this purpose, the application form No. R11001 must also be completely filled out and submitted. In addition, there must be a power of attorney for the person who represents the company founder due to the absence. All documents must be signed by a foreign notary or the Russian consulate. Furthermore, documents that are in another language must all have a notarized translation into Russian.
After the establishment of the company is completed, you still need to open a bank account in Russia. Unfortunately, not every bank simply agrees to open an account and can be very picky. In some cases, the opening takes several months for this reason. Often it helps to open a temporary account first so that you can start transactions right away. You can open such an account at relatively short notice.Valen Group will support you in registering the company and help you to prepare all the necessary documents if you are a foreigner and do not live in Russia and do not have the opportunity to fly to Russia yourself. When it comes to advice, we concentrate on all aspects of setting up a company, both for individuals and for legal entities. The services include advice on all questions relating to the establishment of a company, the selection of an address, the drawing up of reasons for the opening, communication with notaries and the creation and submission of documents.