To start a new business enterprise in Russia as a foreign entrepreneur, you must do some important planning and research before you will be able to officially launch your business. Without proper forethought and strategising, you are likely to miss out on important actions that must be undertaken to launch a successful business. Attention to these details in the early stages will ensure that you are well positioned for success as a business owner in Russia.
In order to start preparation of important legal documents, you will have to make some decisions regarding your business, and you will need to provide some specific information. You will need a legal company name, a registered address in Russia, a certain amount of capital investment, and information about the director, board of directors, Russian bank, and your chosen tax regime. Along with these preliminary pieces of information, you will also need a list of your proposed business activities, including the primary activity of your business.
Listing Business Activities to Register a Business
The primary purpose of your business must be specified, along with a list of the other related business activities you intend to pursue. Your main business activity is usually the activity that will be your main source of income. Examples of business categories along with a sampling of representative activities include:
- Agriculture: Growing fruits or vegetables in a field or greenhouse; raising livestock for meat, dairy products, or wool; fish farming in ponds or tanks.
- Cleaning: Residential cleaning; office or retail cleaning; dry cleaning; carpet cleaning.
- Construction: Houses, commercial property, roads, telecommunications infrastructure, fences, carpentry.
- Education and training: Tutoring; teaching a language; corporate training; arts education.
- Investment: Property investment; stocks and bonds; venture capital.
- Sales: Wholesale or retail sales of raw or manufactured products.
- Service business: Restaurant or food service; home health care; child care; handicapped assistance.
- Manufacturing: Fabrication of any product including clothing, technology, chemicals, baked goods, or prepared meals.
Often businesses are involved in a variety of different activities and all of these must be listed while identifying the main business activity.
Some Business Activities Require Licensing or Membership in Self-Regulated Organizations
In Russia, foreign companies are prohibited from engaging in certain business activities, including selling certain strategic objects, weapons, ammunition, and nuclear products. Other activities require a special permit or license granted by the government or membership in self-regulated organizations. There are 49 activities currently on the list, including the following:
- Medical and pharmaceutical products
- Restoration of historical or cultural buildings or monuments
- Arts trading
- Passenger traffic
Legislation regarding the licensing of certain activities went into effect in 2011, which reduced the number of activities requiring a license by more than half and limited state and local control of such licensing in an effort to eliminate the corruption that had become a part of the licensing process across the country. If your business proposal includes an activity that requires a license, the attorneys at Jus Privatum can help expedite the application process and see to it that you are able to obtain the required licenses and certifications.
Only the membership of self-regulated organizations (“SROs”) authorize their members to carry out following activities by issuing admission certificates:
- Bankruptcy trustees
- Consumers cooperative societies
- Qualified appraisers
- Agricultural cooperatives
- Heat supply companies
- Energy auditors
- Betting and gambling companies
- Designers of buildings and premises
- Constructing buildings and premises
- Engineering and surveying for the purposes of erecting buildings and premises
Some construction-related activities (for example, fire- and industrial-hazardous-security designing) are still subject to licensing.
Construction and design activities—as well as construction supervisory activities with respect to any commercial property—that require SRO membership may only be carried out by a company holding a valid admission certificate. This also applies to subcontractors, since Russian law does not recognize the ‘umbrella principle’ with respect to admission certificates. Both Russian and foreign legal entities may obtain admission certificates. SRO membership fees depend on the type of activity and may be substantial.
Jus Privatum Can Be Your Partner in Russia
While much has changed in Russia in recent years, making it easier for foreign investors to do business here, there are still very specific steps you must follow to launch a business successfully. Especially if you are not already living in Russia, you will need the assistance and advice of the business and legal experts at Jus Privatum. We understand the process and can provide you will all the tools you will need to establish your business. From translation services to document filing, our services take care of business for you. Contact us through the link on this page and we will answer any questions you may have.