Company Set-Up in Russia
Learn more about the most common
legal form in Russia
For you in Russia!
Are you planning to found a Russian limited liability company? We would be pleased to support you with our expertise and knowledge.
The Russian OOO (Obschtschestvo s Ogranitschennoj Otvetstvennostju) is by far the most frequently represented legal form in Russia, with a share of just over 80% of all licensed companies. The great popularity of this method results from its advantageous corporate law attributes.
The main focus of the establishment of a Russian limited liability company is on the limited liability of the shareholders towards the company. This means that they are liable for the company's liabilities solely in the amount of their respective shares in the share capital. This means that private assets remain untouched and the risk of loss can be limited. This makes this legal form the Russian counterpart of the German GmbH (Gesellschaft mit beschränkter Haftung) or the American LLC (Limited liability company) and thus the first choice for foreign companies wishing to establish a subsidiary in Russia.
The number of shareholders of an OOO can vary between 1 and 50, whereby a Russian participation is not mandatory. Accordingly, a foreign parent company may hold 100% of the shares only, provided that it is owned by at least two unrelated shareholders, in order not to come into conflict with the so-called "grandchild prohibition" that is applied in Russia.
By renting a legal address and subsequently registering it as a legal entity, the Russian limited liability company is permitted to act as a separate legal entity in full commercial activity. However, before any operational activities can be carried out, a Russian business or bank account must be opened and a separate company stamp must be created. Although this stamp is no longer required by law, it is in practice indispensable for document traffic.
The minimum share capital of the Russian limited liability company is about 10,000 rubles. In individual cases, it must be examined to what extent an increase in the share capital can be used to reduce dividend and withholding tax in accordance with the applicable double taxation treaty. It should be noted that an increase in the share capital at the time of formation is associated with considerably less expense than a subsequent increase. Further costs are incurred in connection with the establishment of a Russian limited liability company for lawyers, notaries and translations, the opening of business accounts and government fees.
Whether the registration of an OOO is successful, i. e. whether it is approved by the state authorities, depends primarily on the previous care with which the necessary documents are prepared.
The outstanding position of the General Director in Russia
According to Russian company law, a managing director, or more precisely a general director, must be appointed at the time of foundation. Together with the shareholders' meeting, it is the only corporate body of the OOO established by law. This means that the general director in Russia has more extensive authority to dispose and make decisions than the managing director of a limited liability company in the West and therefore regularly confronts foreign companies with unusual challenges.
If the function is to be executed by a foreign citizen who does not hold a Russian passport, he or she requires a work permit and a corresponding work visa. The problem is that both can only be applied for in the name of the company after the company has been founded, which inevitably leads to delays. In order to bridge this gap or to be able to draw on an independent, locally experienced person in the long term, a so-called interim manager is often appointed to ensure full control of the newly founded subsidiary at all times.
Step by step to your own limited liability company in Russia
Name of the company
Definition of the company's purpose
Determination of the amount of the share capital
Determination of a legal address
Appointment of the general director
Which legal form is suitable for which project in Russia?
The establishment of a Russian limited liability company is particularly suitable for foreign companies wishing to operate and do business locally in Russia or whose kind of activity requires the formation of an independent legal entity. With a representative office, this is prohibited by law. A branch office, in turn, makes it possible to carry out commercial business activities, although it does not have any legal autonomy, which means that the parent company can be held fully liable for liabilities of the Russian subsidiary.
The appropriate legal form for a company's purpose and intentions is usually very individual. In collaboration with a locally experienced consultant, it is possible to put business activities in Russia on a solid footing from the very beginning.
Our services in the area of business set-up in Russia
We would be pleased to support you with expertise and competence in close cooperation with our German-speaking Law Partner in Russia during the establishment of a Russian limited liability company. Our service includes:
Advice on the choice of the legal form suitable for your project
Support during the process of foundation
Provision of a legal address and a virtual office in one of our offices in Moscow or St. Petersburg
Short-term or long-term provision of the General Director
Opening of a Russian bank account
Do you have any questions regarding the establishment of a limited liability company in Russia? Do not hesitate to contact us. Please feel free to send us an e-mail, give us a call or make an appointment at one of our offices in Moscow, St. Petersburg or Vienna.
Further information on the establishment of a company in Russia as well as on numerous other topics relating to business in Russia can be found in the publications section or on our Russia Economy blog.
Business Set-Up, accounting and reporting in Russia
Ausserer & Consultants is an international tax and accounting company based in Moscow, St. Petersburg and Vienna. Since our foundation in 2012, we have made it our mission to support small and medium-sized companies in local accounting including tax returns, reporting, business Set-Up and expansion in Russia. We also advise on individual questions regarding the Russian market and support our clients at all times.