Doing business in Russia from an outsiders prospective can look daunting at times. For international businesses looking to enter the market for the first time we find a few questions become familiar.
We look below to answer some of the main questions raised when it comes to entering the Russian market.
Is Russia a viable place to do Business?
Despite the current economic situation Russia still has plenty on offer for foreign investors looking to implement projects in the Russian market, however not all companies are able to successfully setup and implement projects without the help of an experienced local partner.
What kinds of assistance is normally sort when setting up a business in Russia
Most foreign investors familiar with doing business in Europe or America are surprised by the number of legal requirements surrounding business activities in Russia.
Most businesses will need to market a product or service and this still requires a level of registration not found in other parts of the world, if for example a company wanted to start simply marketing goods or services then a representative office may suffice but even the registration of representative office requires extensive consideration in regards to corporate and commercial law, immigration law, employment law and tax.
What are the options for conducting business in Russia
Generally speaking there are three options for business entering Russia, firstly without the registration of a legal entity by partnership representation, secondly through the registration of the representative or branch office and finally the registration of a separate legal entity for example a Russian subsidiary.
Are there any limitations of doing business in Russia without establishing a legal presence?
It’s generally possible to export to Russia and render services to clients based in Russia without establishing a legal presence, some clients may experience difficulties with this approach. for example, location can be of interest for local authorities for Russian VAT purposes and for services rendered by temporary workers for an extended period of time may be considered a permanent establishment. Furthermore, being able to market products and services directly can also be limited without representation.
Is a Representative or Branch Office right for us?
In general, representative and branch offices used to be a popular option for businesses entering the Russian market, today they still play an important role in construction and assembly projects, however they are not sufficient for the import and subsequent sales of goods.
A common entry into the Russian Market comes in the form of representative partnership. The partner in Russia provides all the legal requirements and represents the products and services for marketing and distribution matters leaving the international partner with overall control of the direction within the territory.
What is required for setting up a legal entity in Russia?
The setting up of a legal entity requires a number of steps to be completed and listing them isn't in the scope of this page, instead I would refer to the accompanying documentation for a more detailed provision.
How long will it take to establish a legal entity in Russia?
A number of factors need to be taken into account which can delay documentation, some example would be; location sourcing, local directorship and document preparation as just a few examples. We normally advise to plan for between three and five months.