<h2 class = 'uawtitle'>Starting A Business In Russia Successfully - This Is What You Need To Know</h2><br />
<div style='font-style:italic;' class='uawbyline'>by Michael Haase</div><br /><br />
<div class='uawarticle'>Russia is the largest European foreign trade partner. During the first six months of year 2013, imports to Russia grew by 3.6 percent. Year by year new companies enter the Russian market to sell their good and services with the aim to increase profits and revenues. With this article, we want to give you a first rough overview about the mostly used corporate forms for establishing a business in Russia. It shall give you an orientation path to go towards your new company in Russia.<br />
<br />
There are different corporate forms a foreign company may choose to become present in the Russian market. Namely these are the representative office, the branch and the subsidiary. As Russian legal system and bureaucracy is rather complicated the proper legal form should be chosen with a long term view because it will be difficult to change the corporate form later on.<br />
<br />
At the end of the century, the representative office foreign companies chose mainly the representative office for market entry. After Russian law representative offices are conceived a taxable long-term establishment of a foreign company in Russia. They are usually used to execute marketing activities in Russia and arrange for agreements between a Russian local firm and the mother company abroad. Usually representative offices do not execute business activities like import and trade. Russian local businesses perceive the representative office as giving only a minor priority of a foreign mother to the Russian market. This and a large bureaucracy related to currency control make the representative office rather unpopular between local firms.<br />
<br />
The second corporate form here to mention is the branch. As a representative office, the branch is not a separate legal entity but is a part of the foreign company. Branches usually have business activity, and they can import goods to execute trade activities in Russia. As representative offices and branches are considered as part of a foreign company, they are subject to a currency control mechanism. All payments for goods and services to local businesses exceeding USD 5.000 require comprehensive documentation to be issued by the Russian company. This makes representative offices and branches quite unpopular.<br />
<br />
The most prioritized corporate form among foreign companies and Russian local businesses is nowadays the subsidiary, which can exist in the form of a Limited Liability Company (LLC) or Joint Stock Company (JSC). The LLC is the preferred form between those as it has only small capital requirements (RUB 10.000 or USD 350). Another positive fact is that the subsidiary is not subject to currency control. It is, therefore, very welcome for doing business among local Russian firms.<br />
<br />
All permanent corporate establishments in Russia, like representative offices, branches and subsidiaries, are taxable, social security fees need to be calculated, financial accounts have to be issued, and up to 15 different reports have to be provided to various Russian authorities on a quarterly basis.<br />
<br />
The start-up financing of representative offices and branches is easy as are considered as foreign companies. Cash transfers can be done without complication. However, the subsidiary as a corporate form by Russian law is subject to currency control. Cash transfers and payments from outside Russia need to have a legal reason as loan- or dividend payment. They also take much longer as documents have to be prepared for the currency control and banks have to check those. Incorrect documents may lead to reject of cash transfers.<br />
<br />
Depending on your products and services and your derived business strategy for the Russian market the one or the other corporate form might more fit your business plans. Besides of choosing the right legal form, there are other considerations that have to be done before starting your business in Russia, and it is recommended to visit an business consultant in Russia, as well.<br />
<br />
</div><br />
<div class='uawresource'><br />
<div style='font-style:italic;' class='uawabout'><br />
About the Author:<br />
</div><br />
<div class='uawlinks'>Want to find out more about the <a href='http://www.rusconsult24.com'>start-up of a business in Russia</a>, please visit our web site which informs comprehensively about all aspects of the <a href='http://www.rusconsult24.com/index.php/services/company-formation-russia'>corporate forms</a> forms you can chose from including accounting and bookkeeping in Russia, financing, work permit and work visa..</div><br />
</div><br />
<hr><br />
<p>You are receiving this because you signed up for it on 2012-11-21 from IP 65.49.14.75</p><br />
<p>To fine-tune your selection of which articles to receive, just <a href='http://www.uniquearticlewizard.com/bloggers/'>login here</a><br>using your username: </p><br />
<p>To unsubscribe please use the following link:<br><br />
<a href='http://www.uniquearticlewizard.com/unsubscribe.php?mail=jabartts.muhmmad @blogger.com&code=49e7b32116d525bd162ea182cd5ad8f6'>Unsubscribe</a><br />
<hr><br />
No comments:
Post a Comment