Business in Russia - checklist before setting up a company

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Foreigners quite often ask us how to start a business in Russia. I must say that even though registering a company in Russia is seemingly easy, there are some serious nuances, especially if you are a foreign national. And you yourself understand perfectly well that doing business is not limited to registering it with a government agency.

STARTING A BUSINESS

1) DIRECTOR

Before you incorporate an LLC (OOO in Russia), you need to decide how many members it will have and who will be the director (i. e., the head of the firm). The paradox is that «director» is a position, a job, and a foreigner must work, with some exceptions, on a work visa. When the company doesn't exist, he cannot invite himself to be a director in this company, and the company must have a director from the very beginning. There are several options to solve this problem, if necessary, feel free to contact us.

2) ADDRESS

You should also preliminarily find premises - a Russian company cannot help but have a real address. Sadly, in our practice, we have encountered fake office scams. The future founder finds a landlord on the Internet, they sign a lease agreement without even looking at the office. Then the Federal Tax Service fines the founder for providing false information, since the alleged «landlord» did not confirm the existence of these premises. So due diligence is always a good idea when searching for premises. In addition, of course, any landlord will offer you a contract that is favorable to them, not you, so if you sign their version without reading it, you may find yourself in a disadvantageous position – e. g., the owner will be able to kick you out within 24 hours without written notice. Better have a specialist read the contract not to get in trouble.

3) TAXATION

What else should a founder(s) decide before registering a business? What taxation system they will choose. There are four of them for a limited liability company: general, simplified, automated simplified, and unified agricultural. Some of them have subsystems, they have their own restrictions and advantages. It is a complex topic, and to find out which system works for you better and how to switch to it, please contact our team.

BANK ACCOUNT

No company can do without a bank account. However, not every bank now accepts transfers from abroad, and some charge huge fees for making such transfers, so I recommend reading the terms and conditions offered by a particular bank before opening an account there.

TRADE MARK AND NAME

The name of the company should be unique, otherwise you may get a lawsuit from a namesake company registered earlier. Needless to say, things are even more complicated with a trademark. While it is easy enough to check the name in the database and, if it is not taken, create an LLC under that name, registering a trademark is a separate, very troublesome process.

HIRING EMPLOYEES

Even if a company does not have any income, it is obliged to file tax returns and various reports in accordance with an «accounting calendar». No one except accountants understands it, and therefore any LLC simply needs such a specialist. Feel free to reach out to us if you are in need of an accountant for your enterprise.

Another issue to look at is a lawyer. You might think that if you don't have lawsuits with clients or contractors, you don't need one, but that's not true. First, a company must have some documents that are not directly related to its registration - from GDPR to a fire safety log. This list depends on the type of activity. Secondly, there are various requirements dictated by the Consumer Protection Service, Fire Service, Russia's Government, etc. They can prescribe rules for storing food and PPE, the location of certain premises, standards for the work of employees, and so on - the list depends on what the business does. Not only a foreigner, but even an ordinary Russian citizen will not be able to remember these details without the help of a professional.

A separate question is inviting employees from abroad. This is probably one of the things that ordinary lawyers dislike the most, since there is a strict procedure to follow, otherwise the Ministry of Internal Affairs will refuse your application.

MARKETING

It's a truism that without advertising, business cannot survive. Marketing in Russia has its own features, and we help entrepreneurs promote their business through Yandex, 2GIS, Avito, Telegram, VK, Instagram, and of course by creating a website.
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