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Who can be a founder of a company in Russia?
A limited liability company (LLC) is a legal entity, the authorized capital of which is divided into shares; the participants of the LLC are not liable for its obligations and bear the risk of losses associated with the activities of the company, within the value of their shares.
- Note: A foreign citizen can be the only founder of LLC.
Note: A legal entity cannot have another legal entity consisting of one person as a sole participant.
Note: The founder of an LLC with foreign investment cannot be a foreign organization consisting of one person.
Who can be the director of a legal entity in Russia?
Individuals – citizens of the Russian Federation from the age of 18.
Requirements for the authorized capital of a limited liability company
- The minimum size of the authorized capital of an LLC is 10,000 rubles.
The authorized capital of the created company must be paid in rubles within four months from the date of state registration of the legal entity.
By this time, the LLC, as a rule, has already opened a bank account, to which the foreign founder can transfer funds in payment of his share in the usual manner.
- The recommended size of the authorized capital of an LLC is over 10,000 rubles, for example, from 100,000 rubles.
Banks, considering the possibility of opening a bank account for an LLC (especially with a foreign founder), as well as in the process of providing bank services, are more loyal to companies whose authorized capital is more than the minimum established threshold.
In addition, when choosing suppliers or customers, your partners also pay attention to the size of the authorized capital and may treat companies with a minimum authorized capital with a certain caution and be more loyal to companies with an authorized capital above the minimum level established by law.
What are the requirements for the legal address of your company?
The best option is to rent an office in which the company's employees will work.
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Advantages:
- when checking the legal address of your company by bank’s and the tax authority, the company will not have any problems since it complies with the laws of having a real physical presence at the address of business registration.
- there is no problem with receiving correspondence sent by counterparties and government agencies to the address of the company and no risk of missing important notifications.
The obvious disadvantage is certain monthly rental costs.
Not recommended, but a possible option is to rent a legal address.
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Before buying an address, you should:
- use the online service on the official website of the tax service (https://pb.nalog.ru/search.html#) and check if the address is on the list of bulk registration addresses – if the address is on the list, it is likely that the address may be invalidated , and registration of LLC will be refused.
- clarify the order of delivery of correspondence – it is important not to miss a single letter from a government agency.
Order of the Federal Tax Service of the Russian Federation of 11.02.2016 No. ММВ-7-14 / 72 @ provides that the fact of registration of five organizations at one address is sufficient for the recognition of an address as a “bulk” one (or you may say banned one). If such a fact is established by the tax authorities, then checking the information in the Unified State Register of Legal Entities for authenticity during the initial registration or changing the address of a legal entity cannot be avoided.
Registering a company at the home address (house or apartment) of the founder or manager.
The main conditions for registration in this case are registration of one of the founders or the ownership of the premises provided.
In this case, the Federal Tax Service does not provide a letter of guarantee, but the Consent of the owner of the apartment, drawn up in any form.
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Required documents for registration of LLC with foreign participation
Situation 1: The founder of the LLC is a foreign citizen, an individual.
Situation 2: the founder of the LLC is a foreign legal entity.
What documents do you receive upon registration
- Extract of the Unified State Register of Legal Entities, a document confirming the fact of making an entry in the unified state register of legal entities. It will be issued in the official form approved by the Federal Tax Service of Russia.
- The charter of an LLC with the mark of the registering authority - the tax office only affixes seals on it.
How to apply for company registration
- A foreign founder can personally submit documents for registration of a company.
- It is also possible to remotely submit documents for registration through a representative with a notarized power of attorney.
- Or send prepared documents by Russian post.
- Provided that the documents meet all the requirements, the founder-foreign citizen / legal entity receives registration documents within three working days and can start work.
- Regardless of the method of filing an application with the registering authority, a document confirming the fact of making an entry in the relevant state register, the constituent document of a legal entity, the applicant can receive without visiting the inspection, to the e-mail address.
For this, the e-mail address must be indicated in the application for state registration.
Specifics of choosing a taxation system for a Russian LLC with foreign participation
- If the share of a foreign company in the authorized capital is more than 25%, such an LLC cannot apply the simplified taxation system - this is a general rule that applies to Russian companies as well.
- If the organization has foreign founders-individuals, then regardless of the size of their share, the LLC can operate on a simplified taxation system or can choose a standard one.
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There are no special requirements for the name of an LLC with foreign participation. The general requirements for the name of LLC apply, which are enshrined in article 1473 of the Civil Code of the Russian Federation:
- the corporate name of a legal entity must contain an indication of its organizational and legal form and the actual name of the legal entity, which cannot consist only of words designating the type of activity.
- a legal entity must have one full company name and is entitled to have one abbreviated company name in Russian. A legal entity may also have one full company name and (or) one abbreviated company name in any language of the peoples of the Russian Federation and (or) a foreign language.
- The corporate name of a legal entity in Russian and the languages of the peoples of the Russian Federation may contain foreign language borrowings in Russian transcription or, respectively, in the transcriptions of the languages of the peoples of the Russian Federation, with the exception of terms and abbreviations reflecting the organizational and legal form of a legal entity.
The easiest way to check the name of a legal entity is through the electronic service of the Federal Tax Service – https://egrul.nalog.ru/index.html
The fee for the registration of an LLC with foreign investment is the same as for the registration of an LLC with fully Russian participation: 4,000 rubles.
Those who submit a package of documents for registration in one of the following ways are exempted from paying the fee:
OKVED codes are statistical information designed to inform state bodies what exactly a new business entity plans to do. The codes are indicated according to a special document – the All-Russian Classifier of Economic Activities, which gave the name to the abbreviation “OKVED”.
The selected OKVED codes affect many aspects of
Therefore, it is important to choose the correct OKVED codes from the very beginning of the company’s activities.
You can select one or more OKVED codes. If there are several codes, one must be defined as the main one (indicated first), and the rest are defined as the additional ones.
The main OKVED code is the code if the type of economic activity that reflects the activities of your organization to a maximum extent. That is, this is the activity that prevails in comparison with the rest.
The additional OKVED code reflects related activities, i.e. does not occupy a leading position among the rest. For example, for a car dealership, the main OKVED code will be the sale of cars, and the additional ones: maintenance, sale of auto parts.
The legislation does not contain restrictions on the choice of codes for only one group. Thus, if the main code involves activities in the field of agriculture, then you have the right to indicate codes from other groups, for example, transport services.
But, keep in mind that the rule is matching and simple logic. For example, if, again, your main code is associated with agriculture, then it is not logical to indicate the provision of legal services in additional codes.
A change in OKVED codes is a common occurrence for business, a change in codes may be due to business expansion, adjustments to current activities to increase competitiveness in the market (in this case, a new additional OKVED is introduced into those already contained in the Unified State Register of Legal Entities), or a legal entity or individual entrepreneur may decide completely change the scope of activity (in this case, there is a change in the main OKVED).
There are no special requirements in terms of OKVED for LLCs with foreign investments, but there are a number of significant restrictions on the type of activity carried out by such LLCs.