Russia Company Formation

Russia company registration is a legal way for foreign entrepreneurs to conduct business in Russia. The country's economy is rapidly expanding, despite the presence of heavy government control. Russia company formation is also time consuming, requiring in-depth knowledge of local regulations, which frequently change. Thus, clients choosing company incorporation in Russia should prepare for lengthy documentation procedures. The following information will help you determine whether Russia company formation is the optimum corporate structure to fulfill your business objectives:

Between 1998 and 2006, Russian gross domestic product (GDP) expanded by an estimated 57.6%, creating major opportunities for local businesses. However the Russian economy was one of the hardest hit by the 2008-09 global economic crisis, with GDP shrinking by almost 8%. Despite the 2009 decline, Russia can be an attractive market for international entrepreneurs. 100% foreign ownership is permitted with Russia company formation. However, Central Bank approval is required for companies with more than 50% foreign ownership.

According to economic forecasts, Since the start of 2010 the middle class constitutes over 50% of the population which has created a relatively large market for entrepreneurs who choose Russia company registration.

The minimum authorised share capital required for Russia company registration is relatively low at 10,000 Rubles (approximately US$320) for a limited liability company (LLC). Half of the share capital must be paid up prior to registration of the Russian company.

Russia company formation takes up to eight weeks to complete due to certain levels of bureaucracy in the country. According to the World Bank's Doing Business 2011 survey, Russia is the world's 123rd easiest place to do business. The survey measures factors including business start up procedures, time, cost and minimum capital required to start a business. Additionally the World Economic Forum ranks Russia 66th in its Global Competitiveness Report 2011-2012.

Russia restricts foreign investment in various lucrative industries including aerospace, natural gas, insurance, electric power, defense, natural resources and large-scale construction projects.

A company is required to rent a physical office premise prior to Russia company formation. A registered office address will not suffice.

Russia is negatively ranked as the world's 143rd freest economy in the Heritage Foundation's 2011 Index of Economic Freedom, a measure of freedom enjoyed in business, trade, monetary, financial, investment and labour markets.

Russia is negatively ranked as the 143th least corrupt country in the 2011 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians. Corporation tax is levied at a rate of 20%. In addition, Federal and Municipal taxes, which vary according to the levels of capitalisation, are levied.