Russia is obviously the largest country in the world in terms of the land area it occupies. Recent statistics placed Russia as the 9th most populous nation of the world, and the country stretches and covers over 1/8th of the total inhabited land in the world.
The economy of Russia is considered to be one of the biggest in the world (9th largest) and it has the largest reserves of minerals and energy resources in the world.
Russia generates most of its income from oil, natural gas, timber and metal. The agriculture sector is another income generator for Russia and the government (Download the Corporate Governance in Russia PDF from here) has put in place policies that support farmers. This is so because since Russia has the fourth largest total area suitable for cultivation in the world hence the encouragement of investors to go into farming.
Russia is also noted as one of the largest exporters of grains, meat, fish and seafood to other European nations and the United States of America.
How to start business in Russia
Starting a business in Russia has been tarnished for a very long time by reports of corruption. The future prospects of Russian economy are still bright as forecasts have predicted a 1.7% to 1.8% growth in consumption annually.
As a foreigner who wants to start a business in Russia there are several options for you:
1. You can register as an individual entrepreneur or sole proprietorship.
2. Establish your business in Russia using a Branch or Representative Office (RO).
3. You, as a foreigner, are allowed to establish a Russian Legal Entity as a Limited Liability Company, a Partnership or a public or private Joint Stock Company.
Related Article: How to start a small business
Steps for setting up a new business in Russia:
- Notarize your foundation documents such as registration application, copy of charter and foundation agreement.
- Make a bank deposit of your capital and get a proof of that. You have to pay half the charter capital before your business starts and the other half in the first year of the company’s operation. Opening a bank account will not cost you any money and you can do it in one day.
- After this, you need to pay the registration fee to a legal body of the State Tax Inspectorate. The registration fee is approximately $70.
- Next, you have to register at the Federal Tax Service locally in order to obtain your tax registration number and state registration number. This registration can take up to 18 days and you are required to submit a number of documents with your application such as registration fee payment receipt, notarized registration application, charter, foundation agreement and others. Failure to fulfill all requirements laid down by tax authorities can lead to rejection of your registration application.
- You need to notarize you bank Signature Card, Taxpayer Identification Number Certificate and Registration Certificate. All this will cost your about $40 to $45.
- Set up a company bank account. The opening of the bank account can take anywhere from 1 to 5 days and you will have to submit documents related to your company.
- You have to submit your company bank account number to the Federal Tax Service and get a special letter of confirmation from them. Doing this will take you an average of 5 days and you have to do this within 10 days of setting up the company bank account.
- Lastly, you should find out if you need to register your business with any local body.
The financial year in Russia ends on December 31st and it is mandatory for all limited companies to submit their financial statements by March 30th.
The business culture of Russia is very different from that of Western countries. Most businesses follow a hierarchical system but the work environment is very democratic where everyone is allowed to have an opinion.