Russia: Types of Company
Foreign companies have various options when setting up a business in Russia. Most often, the first step is to open a Representative Office, but then or later it is also possible to form a separate Russian legal entity, or to participate in a joint activity agreement.
Russian business activity is conducted under the Civil Code, which allows foreign companies to form Russian organisations, including Joint Stock Companies (JSC), Limited Liability Companies (LLC), or Partnerships.
New businesses have to obtain tax registration, statistics registration and state non-budget funds registration (Pension Fund, Social Security Fund and Mandatory Medical Insurance Fund). The statutory timeframe for registration of a newly established Russian company is five business days, but taking into account certain preparatory work preceding filing of company documents for state registration as well as additional filing and registration requirements, 2 - 4 weeks is a more realistic registration period, and that's if there are no problems.
A foreign investor may pay for his participation interest (shares) in a Russian company's equity (registered) capital either in roubles or in foreign currency. Payment in foreign currency may be made directly from the investor's account with a foreign bank, while payment in roubles requires a special type "K" rouble account, which involves registration with the Russian tax authorities and therefore increases overall company formation time. In fact, few banks provide this service.
Incorporated Russian companies are managed via a members' (Shareholders') General Meeting (the supreme governance body) and an Executive Body (represented by either a sole General Director or a General Director jointly with a Management Board). Should a Board of Directors be created, it has supervisory rather than managerial functions; members of a Management Board or of a Board of Directors may not legally bind the company other than on the basis of a power of attorney.