How Long Does It Take To Register A Company In California

05.09.2019

A guide to opening an LLC in Russia

Before focusing on the ways for strange founders to establish a legal presence in Russia, it would exist helpful to say a few words about common forms of local business structures for not-resident investors.

Distributorship contract

This form of business does not require opening a company in Russia. Distributorship contract is an economically feasible options for foreign small businesses. At an early stage, when in that location are no regular employees and no reliable distribution channels, a foreign legal entity (FLE) may allow the Russian companies to sell the FLEs' appurtenances in Russia.

Cooperation between the manufacturer and the official benefactor may have several forms. A FLE may grant a Russian distributor exclusive rights to import goods and sell them in Russia. A FLE may choose several distributors for diverse groups of goods or impose territorial restrictions requiring the customers to purchase products only from a certain distributor. Well-nigh commonly a benefactor grants smaller dealers the rights to work with clients and focuses on product promotion and partner network expansion.

Representative office or branch. A branch and representative role (RO) of a FLE are stand up-alone subsidiaries governed by a parent company and performing all or some of its functions. In practice, branches and representative offices are the most common forms of business for medium and large FLEs. They may open and shut accounts in the Russian and strange banks, make transactions and sign contracts. Branches and representative offices are managed by an appointed head/managing director.

FLEs' branches or representative offices registered in Russian federation pay taxes in line with the Russian tax legislation and international agreements. Double taxation treaties between Russia and FLE'southward countries of origin are meant to prevent double taxation. To work in Russia, branches and representative offices are subject area to accreditation, which takes about thirty days and requires a 120,000 roubles fee.

Joint venture. There is no such thing as a joint venture (JV) in Russian law. Essentially, it is an unofficial proper noun for an organisation established by local and foreign businessmen in Russia. JV is registered as an ordinary visitor, a joint stock company (JSC) or a limited liability company (LLC).

To course a joint venture a foreign investor may establish a new visitor or buy a stake in an existing Russian-owned enterprise by acquiring a participatory interest in the company'southward charter capital letter or by becoming a participant through an increase in the lease capital.

The advantages of this type of business in Russia include the ability to tap several markets and stiff economical growth. What is more than, the Russian partners are fully aware of the market climate, well versed in legal matters and have the required expertise and contacts.

A company with a strange founder.

The well-nigh popular forms of company registration in Russian federation are joint stock companies and express liability companies. Such legal entities operate under their ain lease and in line with the Russian laws. The incorporation procedures for a JSC and an LLC are very similar, the difference is that subsequently JSC incorporation, it is necessary to additionally annals the shares consequence and delegated the powers of keeping the register of shareholders to a professional registrar. The liability of the participants for the company'southward debts is limited to the payment of their shares in the charter majuscule. LLC may opt for a simplified tax arrangement (STS), a preferential tax authorities offered by the state, which is beneficial to small and medium businesses.

This commodity will focus on registration of an LLC with non-resident founders, as the most familiar and like shooting fish in a barrel-to-use business grade for greenhorn investors.

Before going into details, it is necessary to outline the existing terms for establishing an LLC with foreign participation in Russia.

Is information technology possible to open up an LLC with foreign participants (strange national or a FLE) in Russia? Under par. 4 of art. 66 of the Russian Civil Code the participants in the economic companies and the investors in the limited (commandite) partnerships may be the citizens and the legal entities. The constabulary may prohibit or restrict the participation of the individual categories of citizens in the economic partnerships and companies, with the exception of the public articulation-stock companies. The similar rule is set out in par. 1 of art. 7 of the Federal law "On Limited Liability Companies" (On LLC) dated 08.02.1998 N14-FZ.

Registration of LLC with strange participation
+7(495) 589-05-39 and info@ur-aid.ru

On the basis of par. seven of art. 11 of the Constabulary N xiv-FZ registration procedure for LLC with foreign participation is adamant past the federal law.

Nether fine art. half dozen of the Federal Law of 09.07.1999 N 160-FZ "On Foreign Investment in the Russian federation" (hereinafter – Law Due north 160-FZ) the foreign investor is entitled to implement investment on the territory of the Russian Federation in any forms not prohibited by the legislation of the Russia.

When registering an LLC, strange individuals and foreign legal entities may act equally founders (participants). Yet, Russian federation's Federal Law "On Limited Liability Companies" No. xiv-FZ dated 08.02.1998 (art. seven par. 2, sec. 3) sets out the following restriction with respect to LLC incorporation: A visitor may non have some other economical visitor consisting of one person as the but participant.

The provisions of this Federal Police force shall extend to companies with ane participant inasmuch every bit this Federal Constabulary does not stipulate otherwise and inasmuch equally this does not contradict the substance of appropriate relations.

Challenges and difficulties of establishing an LLC with 100% foreign participation by a strange company consisting of i person in Russia.

Features of registration of an LLC with a foreign founder. Registration of LLC with foreign participation is a rather popular service in the Moscow legal services marketplace.

Requirements for the preparation and submission to the registering body of an awarding for registration of an LLC with foreign capital letter. Applicant.

Until recently, it was rather easy to constitute an LLC with foreign investments. Opening an LLC by foreign nationals was even easier, if the newly established visitor consisted of both foreign individuals or companies on the i hand and Russian founders on the other hand.

If a founder of an LLC was a foreign individual or a legal entity and for some reasons could non come to Russia, a Russian national used to get the founder of an LLC. This was the easiest and most oft used option, the point being that both nationals (foreign and Russian) used to go the founders of the LLC.

The share of a Russian national in the lease capital letter could have been 001%, ane%, or of any other insignificant size. In line with the minutes of the meeting of founders, the Russian national was ordered to register the company. It was this national who could accept acted as an applicant responsible for filing the documents for state registration of the visitor.

The process allowed to avert many problems with the signature'southward certification by a consul or translation of applications and their certification by foreign notaries. After registration of an LLC with foreign participation, the share owned by a Russian national could have been sold to a foreign national, or the Russian national could accept left the LLC, upon application, and his share was subject to distribution or buyback by a strange participant.

But the Gild of the Federal Revenue enhancement Service of Russia No. MMV-7-six-/25@ "On Approval of Forms and Requirements for the Execution of Documents to be Filed with the Registering Body for State Registration of Legal Entities, Cocky-Employed Individuals and Peasant (Farm) Holdings" dated 25.01.2012 has significantly complicated registration of LLC with foreign participation.

In line with the new forms for legal entities registration, all founders of the visitor were charged with responsibility to act as applicants for company incorporation, i.e., it was no longer possible for one of them to take on powers delegated by other applicants. (Previously, 1 applicant for registration of an LLC with few founders was plenty.) Therefore, if the future legal entity is founded by ii or more persons, the application for the LLC registration in cavalcade two.20. List Northward of the application "Data about the Bidder" is be filled with information near all founders (including foreign ones). The application's listing "Information well-nigh the bidder" is signed by the specified person and notarized.

Therefore, foreign individuals, likewise equally heads of foreign entities who are willing to register an LLC in Russia, take to come up to Russia and certify their signatures in the application for the company registration. If there are three or 5 or more participants, all of them have to apply to Russian federation'southward notary offices and notarize their signatures in the application.

Fortunately, when registering an LLC, foreign founders don't have to come to a notary all at once, information technology is possible one by one, and come to different notaries, nevertheless, the new requirements accept significantly complicated the registration of an LLC with strange participation.

Do I need to come to the Russia to register an LLC with foreign founders?
When registering an LLC with strange investments in Russia, there are a number of difficulties associated with the impossibility of a strange national - founder or head of a foreign legal entity – to come to Russia for registration.

However, the founders are finer required to come up to Russia. Equally was mentioned earlier, during registration of an LLC in Russia, the application on the state registration of a legal entity when incorporated (form P11001) is filed with the registering body, and the application should be signed by all founders of the legal entity, and their signature should be certified by a notary.

According to par. 1 of art. 9 of the Federal Law dated Baronial 8, 2001, No. 129-FZ "On State Registration of Legal Entities and Private Entrepreneurs" the following individuals may act as applicants during registration of a legal entity when incorporated:

• founder (founders) of a legal entity at the time of its establishment;

• head of a legal entity acting every bit a founder of a legal entity beingness registered;

Russia's legislation therefore does not permit signing an application for state registration of a legal entity when incorporated by a person acting under ability of attorney. A founder of a company or the caput of a FLE that is the founder of an LLC has to personally come to a notary.

Every bit for signing the decision on establishing an LLC, this decision may be signed by a person acting on the basis of a verified power of chaser. The application on land registration of a legal entity tin be submitted to the registering body under the power of chaser, the certificate of country registration of a legal entity and the visitor's articles of association tin also be received by a representative under the power of attorney.

What if a strange national cannot come to Russia to certify the signature by a notary? There are several options.

Certification of an application for land registration in a consular office. According to art. 1 of the Russian law on notaries public, notarial acts on behalf of Russian federation in the territory of other states are performed by the authorized officials of Russia'south consular offices.

However, practice shows that there are many pitfalls in this process, and it is necessary to inquire virtually the possibility of certification of the founder'southward signature in each particular consulate.

For example, in that location are conventions in force, according to which "a consular official has the right to certify signatures of nationals of the represented state", which ways that only signatures of Russian nationals are subject to certification.

Moreover, in accordance with par. 12 of Annex 1 to the Gild of the Federal Tax Service of Russia of 01.xi.2004 N SAE-three-09/sixteen@ "On methodological clarifications for filling the forms of documents used in the state registration of legal entities and private entrepreneurs" section 12 of an awarding for state registration of a legal entity when incorporated is filled by a notary in line with article lxxx of the Russian law on notaries public.

If section 12 is filled in by a consul rather than a notary, the Federal Tax Service may officially refuse registration of an LLC with strange participation. In the best-case scenario, there's a notary in a Russian consulate.

Certification of an application for registration of an LLC by a foreign notary, apostilization.

Alternatively, a notary may concord to certify an application in Russian, for case, if one translates an awarding only to ensure a notary understands the purport of the document without certifying the data specified in the application and certifies the signature of a signee. In this case, a notary verifies the authority and certifies the signature of an applicant on a separate page, and attaches it to the application in Russian, then the documents are apostilized, translated (apostille + notary's signature sheet), the translation is certified by a notary and and then the documents are submitted to the registration body. This is the about pop mode of registration of an LLC by a foreigner, with no demand to come up to Russia.

It should be noted that all strange documents are accepted only with the marks of consular legalization or apostilized, as well as with a notarized translation of these documents. Other requirements are gear up for participants from countries that have signed a mutual assistance treaty with Russia, countries that have signed and countries that have not signed the Hague Convention of 1961. Thus, for the countries that signed the treaty "On legal assist and legal relations" dated October 07, 2002 (Ukraine, Belarus, Czech Republic, Latvia, etc.), documents notarization is enough. Residents of countries that signed the 1961 Hague Convention submit apostilized documents to the Russian registration body. Both the documents themselves and the apostille must exist translated into Russian, and a translation must exist certified past a notary public. Documents of foreign investors from countries that accept not signed the Hague Convention are legalized in Russian federation's consular offices located in these countries.

Registration of an LLC without participation of a foreign national or a legal entity, followed by incorporation of foreigners into an LLC. An LLC is being registered with the participants who can certify their signatures in the application for registration of the LLC with a Russian notary public. Later on that, a foreign national or a foreign legal entity is incorporated into a registered LLC on the basis of a sales agreement or by an increase of charter capital of the company through contributions of third parties accepted into the company. Of form, this process takes longer, consists of several stages of registration of an LLC with foreign participation. However, information technology requires much less coin that could take been spent for travelling to Russia, accommodation, etc. Though, as exercise shows, foreigners yet adopt more than "traditional" options, they are non used to looking for loopholes of "uncomfortable" legislation.

Ownership a ready-made company, followed by re-registration and incorporation of foreign participants into an LLC.

Less attractive choice for foreigners. Still, we have to mention it too.

If a foreign national or a foreign legal entity are planning to exist the simply participants of the registered LLC and cannot come to Russian federation to annals a company, have no partners in Russia, who could act equally founders for the future LLC, it is possible to buy an already registered company. After the purchase of a prepare-made company, the head of the legal entity may submit documents to the registration body to modify the participants of the LLC and incorporate foreign participants into the LLC. Actually, we're going back to option 4. While changing participants of an LLC a quondam participant who used to be a founder leaves the company, and his share is bought out or distributed among foreign participants.

Documents required from foreign founders for registration of an LLC with foreign participation.

If a foreign company is the founder, the extract from the register of foreign legal entities of a corresponding state of origin or other equivalent legal proof of the juridical status of the foreign legal entity, as well as a Russian translation of the passport of the head of the investor's company, is submitted for registration of the LLC.

It should be noted that if an application for registration is notarized by a Russian notary, the latter volition ask the director of the investor's company to provide a certified translation of the company's charter and a conclusion to appoint him as the head of the company. A notary will need these documents to confirm the authority of the director, they are not submitted for registration. Moreover, if the director of a foreign company does non speak Russian, a certified translator will be required, equally the director must confirm that he or she is conscious of his or her deportment and intentions to register the company.

Other documents may include a certificate of state registration, a lease and a conclusion on the establishment. It is recommended that all available documents be provided. Foreign documents must be translated into Russian, the translation must be notarized, and the documents must be apostilized.

If the founder of a company is a foreign individual, a notarized translation of the passport of the foreign founder of the LLC will be required.

Regardless of whether the founder of a company with foreign participation is an individual or a legal entity, a notarized power of chaser for submission and receipt of documents from the registering body is required. Of course, the power of attorney must be translated into Russian and the translation must be notarized. Once more, this power of attorney is issued only to submit and receive documents from the registering body, information technology is impossible to use it to verify an application for registration of an LLC.

Intricacies related to the participation of a strange investor in the management of a visitor registered in Russian federation. Is a piece of work permit required?

The most important thing is that the founder may lack a piece of work permit or residence allow to register a company with foreign participation. Moreover, as mentioned above, the registration can be carried out in the founder'southward absence, therefore a visa is not required. In other words, a foreign national may be both the founder and the head of the company to be established in Russia.

Nonetheless, in society for the head of the visitor to piece of work successfully, it is withal recommended that a foreigner use for a work permit in Russia. Since work permits and visa invitations are issued for top-managers without quota, hiring of highly qualified specialists (HQS) is greatly simplified.

In that location'southward no need to use for a permit to recruit foreign workers, to mail a vacancy in the employment centre, to provide a Russian linguistic communication certificates and medical certificates.

The highly qualified specialists (HQS) according to Russian police force include foreign nationals earning over two one thousand thousand roubles per twelvemonth nether agreements/contracts. It is assumed that these employees take strong cognition and feel in their surface area of specialization. A three-year work let is granted to them under a simplified procedure compared to other strange workers.

Importantly, if y'all hire a foreigner for an executive position when registering a visitor in Russia and plan to issue a work allow for him/her, it is not recommended that you register him/her every bit a director at once!

The procedure for obtaining a work let for HQS from visa countries implies issuing invitations and work visas. Therefore, if you kickoff annals a foreigner as a director of the futurity visitor, and then utilize for a work allow for him, you will face difficulties and will accept to make changes to the register of legal entities and lay him/her off. Therefore, one should follow the dominion: offset work permit, and so registration as a director.

Restrictions on LLCs with foreign participation

The Russian legislation does non provide for whatsoever restrictions on the use of a simplified tax system (STS) by Russian entities formed by foreign founders. These restrictions are listed in art. 346.12 and 346.13 of the Russian Tax Code.

The Russian legislation provides for rather strict regulation of participation of entities with non-resident founders in certain sectors of Russia'due south economic system.

The law imposes restrictions on strange investors' participation in the charter upper-case letter of entities accounted strategic for Russian federation'south defense and security. The following sectors accept been defined as strategic: repairing, disposal of weapons and military equipment, using radioactive materials, TV and radio broadcasting with a large coverage, publishing a periodical print publication with the circulation at to the lowest degree 1 yard copies for each consequence and 39 more industries. Under the Federal Constabulary No. 57-FZ dated April 29, 2008 and the Federal Law No. 58-FZ dated April 29, 2008, a foreign investor seeking control over strategic business concern entities has to either apply for a prior authorisation or notify the authorized body of a planned transaction. The procedure for applying for a prior authorisation is explained in fine art. 12 of the Law.

There are restrictions on foreign investments in insurance and banking sectors. The Law "On Organization of Insurance Business in the Russian Federation" dated eleven.27.1992 Due north 4015-one, Federal Act "On banks and banking activity" dated 02.12.1990 N 395-ane;

Restrictions as well employ to strange buying and leasing of country plots.

Nether par. 2, art.15 of the Russian Land Code, foreign legal entities shall not have title of plots of land located in the edge territories recorded in the list established by the President of the Russian Federation in compliance with the federal legislation on the State Border of the Russian federation and other territories of the Russian federation specifically indicated nether federal laws.

This means that the land plots in the border territories and within the seaport boundaries cannot be in the buying of foreign citizens or foreign organisations (par. iii. fine art. 15, Country Code; par. two. art. 28 of 261-FZ dated 08.11.2007).

Strange citizens, foreign legal entities, stateless persons, likewise as the legal entities in whose authorized (pooled) capital letter the share of strange citizens, foreign legal entities and stateless persons exceeds 50%, may only possess land plots pertaining to farm lands on a leasehold basis, except for cases provided for by the 119-FZ dated 05.01.2016 (art. 3 of 101-FZ "On Farm land turnover").

These are certain state plots in certain border territories, within the boundaries of seaports, etc. Russian companies with a foreign participation of more than than l% cannot own agricultural land, foreign investors may just lease agricultural state.

Exclusive Processing services in the field of registration of LLC with foreign participation.

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Our primary business organisation focuses on country registration of legal entities and private entrepreneurs. Nosotros volition help you lot to annals your company in Moscow in the shortest possible time and on favourable terms.

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Modify of LLC participants by ways of shares sale agreements.

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Source: https://businessgarant.com/announce/2019/09/05/a_guide_to_opening_an_llc_in_russia/

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