Benefits and problems

Benefits and problems of registering a company in Russia

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  • Benefits and problems

    Benefits of Russia company registration

      Russia business registration facts

    1. Russia today has the seventh largest economy in the world with a GDP of US$2.422 trillion. All the wealth rests with Moscow, which has Russia’s highest GRP (Gross Regional Product) of US$339,647m – almost double that of the next region;
    2. The paid up share capital is 10,000 roubles (approximately US$130) for a limited liability company;
    3. Russia is rich in natural resources, the revenues and jobs from which give the country’s middle class spending power;
    4. Russia has a diverse range of business opportunities due to its rapidly-growing middle class population;
    5. Russia is accessible by land and sea, meaning that businesses can select the most cost effective mode of transportation;
    6. Russia has the 8th largest workforce in the world. The mean monthly wage in the country is US$800 per month, which is affordable compared to EU countries where wages normally exceed US$2,000;
    7. Compared to western countries, the cost of living in Russia outside of Moscow and St. Petersburg is very cheap when it comes to food, transport, utilities, rent, wages etc.

    Problems with Russia company registration

    1. Each Russian company must have a resident director. Only the resident director may be the bank signatory;
    2. Russia’s economy is extremely dependent on the price of oil and has suffered significantly due to OPEC’s recent action to lower the price of the world’s biggest commodity;
    3. Sanctions related to the Russian occupation of Crimea increase the compliance burden for western businesses when doing business with Russia;
    4. After company registration in Russia, quarterly financial statements must be submitted to local authorities;
    5. Russia’s government plays a big role in daily business. Therefore, there exist administrative and legal barriers to business registration in the country. To start a Russian company, you will need professional help to navigate the legal and governmental obstacles;
    6. Russia is not a member of the EU and therefore does not share the business benefits the EU has to offer;
    7. Russia is a vast landmass, which makes good transportation within the country expensive. Entrepreneurs must carefully anticipate transportation costs;
    8. Registering a company in Russia can become very complicated in some industries, as the Government restricts, and even prohibits, foreign investment in various industries including aerospace, natural gas, insurance, electric power, defence, natural resources, and large-scale construction;
    9. Russia’s corporate tax rate is relatively high at 20%.
  • Best uses for a Russia company

    Technology research firms find Russia attractive thanks to the high technical skills of the country’s workforce. In addition, the Russian government has tax incentives in place for science and technology-related activities, including accelerated amortization rates and greater deductibility of R&D expenses for tax purposes.

Contact us

For additional information on our company registration services in Russia, please email us at Alternatively please contact our in-house country expert, Ms. Karen Lee, directly:
client relationship officer - Karen
cpa russia Russia government website Central Bank of Russian Federation Russia federal customs service world trade center moscow