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Company registration & liquidation

Assistance in Company Registration and Incorporation in Russia

 

Foreign investment in the Russian economy is steadily increasing. Foreign companies evince keen interest in starting business in Russia. What are rules and regulations specified by the Russian laws applicable to investment?

 

Pursuant to Article 2 of the Federal Law on Foreign Investment in the Russian Federation, No. 160-FZ, dated 09.07.1999, foreign investment means investment of foreign capital in an object of entrepreneurial activity in the Russian Federation in the form of objects of civil rights held by a foreign investor, provided that such objects of civil rights have not been withdrawn from the commerce or restricted for commerce in the Russian Federation in accordance with the applicable federal laws, including money, securities (in foreign currency and currency of the Russian Federation), other property, proprietary interest, pecuniary exclusive rights to the results of intellectual activity (intellectual property), as well as services and information.

 

If a foreign company intends to run business in Russia, it has several options:

- to open a representative office of its company in the Russian Federation;

- to establish a new legal entity in the Russian Federation in accordance with the RF laws;

- to purchase a share in a Russian company or to acquire an existing business.

 

What is required to do this?

 

Procedures are different and depend on the form of incorporation of the target company (or its share): a limited liability company (LLC) or a joint-stock company (JSC).

 

The legislation of the Russian Federation sees acquisition of business or only a share in LLC as a transaction that must administered by a notary. No matter whether you buy a whole company or only its part, in addition to the agreement for purchasing of equipment and production facilities, the notary must prepare documentation for acquisition of a share in the authorized capital of a limited liability company. The notary will send the documents to the taxation authority for registration, but the company’s responsibility is to receive the extract from the Uniform State Register of Legal Entities and certificates.

 

If a foreign citizen is interested in a share in a joint-stock company, this transaction can be documented in a simple form, and it must be recorded in the register of shareholders of the company. Pursuant to Article 29 of the Federal Law on the Securities Market, No. 39-FZ, dated 22.04.1996, the right of ownership of shares is deemed as transferred immediately after the ownership right transfer is recorded in the register.

 

It should also be remembered that pursuant to Article 2 of the Federal Law on Foreign Investment in the Russian Federation, No. 160-FZ, dated 09.07.1999, a foreign investor must apply to the Consulate for a certificate evidencing his/her legal capacity and the right to do business and make investment in the Russian Federation.