Accreditation of Representative Offices and Branches of Foreign Companies in Russia

If you are looking to do business in Russia and are not yet ready to form a Russian company, setting up a branch or representative office in Russia could be the right choice for you. With an accredited representative office or a branch office, foreign companies can transact business in Russia without forming a Russian corporation.

Understanding the Difference Between a Representative Office and a Branch Office

An accredited representative office differs from a branch office in the following way:

  • Representative offices of foreign entities are strictly limited to liaison and support functions.
  • Branch offices are free to perform all of a foreign entity’s activities in the territory of Russia.

Setting up a branch may be preferable to forming a Russian LLC or JSC if the foreign company is just starting to pursue business in Russia. Furthermore, branch offices are easier to establish and subject to less onerous reporting requirements than those in place for Russian companies.

The advantages of an accredited representative office include less frequent reporting requirements and greater latitude in issuing invitations for foreign partners to visit Russia on business visas. A representative office is an officially recognized extension of a foreign legal entity. Russian law restricts the scope of an accredited representative office’s activities to that of auxiliary representational functions.

It is important to be aware that branch and representative offices are not Russian legal entities and you are, therefore, limited as to what business you can conduct from them. For many investments, including joint ventures, and owing to issues relating to licensing, customs and privatization of state property, a Russian legal entity may be better suited to an investor’s needs.

Steps Necessary to Establish a Branch or Representative Office in Russia

Before a foreign company may begin doing business in Russia through an accredited representative office or branch office, it must register with the authorized Russian authorities. However, in contrast to Russian legal entities, registering a branch or representative office of a foreign company involves several federal and local authorities. As of January 1, 2015, major amendments were introduced to Russian laws regulating the establishment of branches and representative offices in Russia. According to the current rules, the following steps should be taken in order to establish a branch or representative office:

  • Agreement on the anticipated number of foreign employees of a branch or representative office with the Chamber of Commerce and Industry
  • Filing for accreditation with authorized federal authorities
  • Tax registration
  • Registration with the state statistics authorities and obtaining statistics codes
  • Registration with social funds for pension and social security
  • Opening bank accounts

At the moment, most branches and representative offices should be accredited with the tax authorities except for the branches or representative offices of banks and organizations operating in the aviation industry. The state duty for branch accreditation is currently RUB 120,000 (approx. USD 1,740).

Documents Required for Establishing a Representative Office

The list of required documents is, unfortunately, somewhat lengthy and the assistance of a lawyer familiar with the requirements is unavoidable. The attorneys and staff at Jus Privatum have considerable experience in dealing with these applications and will take care of the accreditation process for you.

An application letter for the accreditation of a representative office should be submitted to the appropriate accrediting body and must be accompanied by the following documents:

  • The charter (or articles of association or by-laws) of the foreign legal entity.
  • The registration certificate, Certificate of Incorporation, an excerpt from the trade register, or certificate of good standing of the foreign legal entity.
  • The resolution of the foreign legal entity to establish the representative office in the Russian Federation and to appoint the chief representative(s).
  • The regulation of the representative office.
  • General power of attorney issued to the chief representative(s).
  • Power of attorney for filing the application for accreditation on behalf of the foreign legal entity.
  • The certificate from the tax authorities in the country of the foreign legal entity's incorporation, confirming that the foreign legal entity is registered as a taxpayer and specifying the taxpayer identification code.
  • A copy of a lease agreement or landlord guarantee letter, along with a document confirming the landlord's right to the property to be leased by the representative office.
  • Certificate of payment of a registration fee.

Documents Required for Establishing a Branch Office

Branch offices must be accredited in accordance with the Russian Law on Foreign Investments. An application letter for the accreditation of a branch should be submitted to the authorized registration authority and should be accompanied by the following documents:

  • The charter (or articles of association or by-laws) of the foreign legal entity.
  • The registration certificate, Certificate of Incorporation, an excerpt from the trade register, or certificate of good standing of the foreign legal entity.
  • The resolution of the foreign legal entity to establish the branch office in the Russian Federation.
  • The regulation of the branch office.
  • General power of attorney issued to the director of the branch office.
  • Power of attorney for filing the application for accreditation on behalf of the foreign legal entity.
  • The certificate from the tax authorities in the country of the foreign legal entity's incorporation confirming that the foreign legal entity is registered as a taxpayer and specifying the taxpayer identification code.
  • Certificate of payment of a registration fee.

Final Steps in the Process

All documents from a foreign legal entity must be notarized and apostilled or legalized in the country of execution. Any document supplied in a language other than Russian must be accompanied by a notarized translation. Following accreditation, the representative office or branch office must carry out a number of post-accreditation procedures before it becomes fully operative, including registration with the State Statistics Committee of the Russian Federation, with the tax authorities of the Russian Federation, and with the Russian extra-budgetary funds.

Jus Privatum’s Legal Team Can Simplify This Process for You

The process of accrediting a branch or representative office in Russia can be very complicated for a foreigner trying to navigate the system on his own. With the attorneys of Jus Privatum on your team, however, the process is much simpler. We will help you gather the documents you need, offer translation and notary services, and file all the necessary paperwork with the appropriate authorities.