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  • Rich natural resources
  • Significant investment potential
  • Qualified and competitive workforce

Tax benefits and incentives

In recent years, few tax incentives have been available in Russia, but that picture is now beginning to change. Regional authorities have the authority to reduce their regional allocation of profit tax of 18% to 13.5%, a minimum overall tax rate of 15.5%, including the Federal portion. They may also provide exemptions fr om property and land tax, chargeable at maximum rates of 2.2% and 1.5%, respectively. Such exemptions are normally conditional on meeting specific investment criteria in the region. The St. Petersburg, Leningrad and Kaluga regions, among others, offer incentives of this kind, but neither Moscow nor Moscow region have followed this lead.

Main forms of incorporation

"Open" Joint Stock Company

An OJSC may have an unlimited number of shareholders. Subject to elaborate disclosure requirements, an OJSC is the only form of legal entity whose shares may be openly traded similar to a western "public" company.

The minimum issued capital is set at RUB 100,000 (approximately USD 3,300). Additional obligations are imposed on OJSCs having more than a certain number of shareholders.

"Closed" Joint Stock Company

The most common type of joint stock company, a CJSC, is limited to a maximum of 50 shareholders. There is no obligation for published accounts. A CJSC is often the structure preferred by minority partners in a joint venture, as the JSC Law grants greater rights for minority shareholders than the LLC Law.

The main features of a CJSC are:

  • Shares are only distributed among its founders or another predetermined group of persons. A CJSC may not conduct an open subscription of shares to an unlim ited group of persons
  • The number of shareholders cannot exceed 50. If the number of shareholders is more than 50, it should be reorganized as an OJSC within one year
  • The minimum charter capital of a CJSC may not be less than RUB 10,000 (approximately USD 330)
  • Shareholders enjoy pre-emption rights over any shares offered for sale by an exiting shareholder


Sole Proprietorship

Branch of a Foreign Entity

Procedures and requirements

The registration process includes the following stages:

  • Accreditation and incorporation into the State Register of Accredited Foreign Representative Offices / Branches
  • Registration with the tax authorities (regardless of whether the activities are taxable or not)
  • Registration with the State Statistics Committee
  • Approval of the design of the organization's stamp
  • Registration with the social funds