Entity incorporation

There are a wide variety of legal entities under which you may carry on your business in Russia.

Deciding on incorporating an entity in Russia the important choice is the type of legal entity you choose for your business. Your decision can affect how much you pay in taxes, image of your business among your customers and suppliers, the amount of paperwork and tax returns your business is required to do, the personal liability you face, and the ability to expand your business.

Below we provide a general overview of the various types of business entities in Russia and the differences among them. Each of these is subject to different regulatory and tax regimes reflecting their organisation and ownership.

LIMITED LIABILITY COMPANY

The most common type of business entities in Russia is a Limited Liability Company (LLC).

A Limited Liability Company (LLC) is a company limited by shares. LLC is a business entity registered under the Federal Low about Limited Liabilities Companies. In a LLC, the liabilities of the owners are limited to the net assets in the company and their personal assets are protected from business liabilities.

For more detailed information about limited liability companies, refer to Russian entity registration guide.

JOINT-STOCK COMPANY

Joint-Stock Company (JSC) is a business entity registered under the Federal Low about Joint-Stock Companies. A joint-stock company may be two types: closed and open. Closed JSC is not public. Open JSC is a public company and must have at least 50 shareholders and is listed on stock exchange.

For more detailed information about joint-stock companies, refer to Russian entity registration guide.

FOREIGN COMPANY REPRESENTATIVE OFFICE

A foreign company which is going to gain market insight, exposure and a better understanding of the Russian business environment before setting up a full-fledged office can opt for establishing a representative office first. A representative office cannot carry onprofit making activities e.g. enter into any contracts on behalf of the representative company, raise invoices and engage in trading activities. The representative office has to restrict itself to marketing and liaison activities and coordinating activities on behalf of the parent company.

For more detailed information about foreign company representative office, refer to Russian entity registration guide.