Entrepreneurial activity of foreign investors in Russia

The most common forms of entrepreneurial activity by foreign investors in Russia are:

  • establishing branches of foreign legal entities in the Russian Federation;
  • launching commercial enterprises with foreign investments;
  • establishing of a Russian business by a foreign citizen or foreign legal entity;
  • acquisition of a share in the charter capital of a Russian business by a foreign citizen or a foreign legal enterprise.

Establishing of a branch office of a foreign organization is accomplished by accreditation with the State Registration Chamber within the Ministry of Justice of the Russian Federation in compliance with the regulation of the Russian Government No. 1419 as of 21.12.1999.

Note: Under Russian legislation it is also possible for a foreign company to open a representative office in the Russian Federation which conducts solely representative functions for the foreign company without performing entrepreneurial activities, unlike a branch office which can partially or completely perform all the functions of the head office. The opening of a representative office is accomplished by accreditation.

In Russia joint stock and limited liability companies are the most common forms of legal business structures, in which legal entities carry out their activities.

A joint stock company is an entity, the charter capital of which is divided into a definite number of shares; participants of the JSC (shareholders) are not liable for the company and have a risk of losses connected with the activities of the company according to the shares that belong to them.

PJSC is such joint stock company, the shares and securities of which converted into its shares are publically placed (under the open signature) or publically turned on conditions stipulated by the laws on securities. Rules on the public companies are applied also to the joint stock companies, Articles of Association and company name of which include the indication, that the company is public.

Joint stock company not corresponding to the characteristics indicated above, is considered the non-public.

The minimum charter capital is equivalent to 1,000 minimum monthly wages, as stated by the federal law (100,000 RUB). The minimum charter capital of the non-public joint-stock company shall not be less than 10, 000 RUB.

Regulation: Russian Federal Civil Code, part 1, Federal Law of the RF No. 208-FZ  as of 26.12.1995 "On joint stock companies".

Limited liability company is an entity, the charter capital of which is divided into shares; participants of the limited lability company are not liable for the company and have a risk of losses connected with the activities of the company according to the shares that belong to them.

The minimum charter capital shall not be less than 10, 000 RUB.

Limited Liability Company is a company, established by one or several people, whose equity capital is divided into shares, the size of share is defined by the articles of association; participants of the limited liability company are not liable for it and share the profit and loss connected with the activity of the company according to the amount of the contributions made.

The minimum equity capital is 100 minimum monthly wages, as stated by the federal law (10, 000 RUB).

Regulation: Russian Federal Civil Code, part 1, Federal Law of the RF No. 14-FZ as of 8.02.1998 "On limited liability companies".

NEWS
Conference "State support measures for industrial export-tailored enterprises"
On November 15, 2017 in congress and exhibiting center "DonExpocenter" in Rostov-on-Don the conference under the name "State support measures for industrial export-tailored enterprises" took place.
17.11.2017


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