Doing business

Russia

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Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Types of companies and capital (max/min)	Number of partners/shareholders and liability
Open Joint Stock Company (AO) 100,000 RUR	No minimum. Liability is limited to the amount of capital invested.
Closed Joint Stock Company (AOZT) 10,000 RUR	No minimum Maximum: 50 Liability is limited to the amount of capital invested.
Limited Liability Company 10,000 RUR	No minimum. Liability is limited to the amount of capital invested.
Limited Partnership 10,000 RUR	No minimum. At least one person has unlimited liability and the others have limited liability.
Full Partnership No minimum capital.	No minimum. Liability is unlimited.

Business setup procedures

Setting up a company	Russia	Eastern Europe & Central Asia
Procedures (number)	9.0	6.3
Time (days)	30.0	16.3

Source: Doing Business.

For further information: Consult Doing Business Website, to know about procedures to start a Business in Russia.
Registration Chamber
The competent organization: The local tax office.

FDI in figures

Foreign Direct Investment	2008	2009	2010
FDI inward flow (millions USD)	75,461	36,500	41,194
FDI stock (millions USD)	213,734.0	381,962.0	423,150.0
Performance Index*, ranking on 141 economies	62	57	-
Potential Index**, ranking on 141 economies	9	-	-
Number of Greenfield investments***	574	399	-
FDI inwards (in % of GFCF****)	20.4	2.4	-
FDI stock (in % of GDP)	12.7	20.3	-

Source:

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk. *** Green field investments are a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest Russia

Strong points: Significant natural resources, investment potential largely under-utilized and a qualified workforce.
Weak points: Unstable investment climate, complicated and sometimes contradictory accounting regulations and legislations, infringement of intellectual property, many sectors closed to foreign investment as considered strategic.
Government measures to motivate or restrict FDI: The establishment of investment assistance in Russia is still in its infancy, despite many declarations of intent. The government prefers to improve the general investment climate by tax reductions and economic reforms.
Majority foreign ownership is subject to authorization in many sectors, particularly those linked to raw materials, heavy industry and aerospace.
Bilateral investment conventions signed by Russia: Russia inherited 14 bilateral treaties with most of the European countries, China and Canada.
Since then, Russia has signed 34 treaties of which 20 have been ratified (especially with Central European countries, Japan, India, Egypt and South Africa). On the other hand, it has not yet ratified the bilateral investment treaty signed with the United States in 1992.
It has recently asked to renegotiate these contracts, fearing that they may not be compatible with its joining the WTO.
To see the complete list of the countries, click here.
To see the treaties, click here.

Procedures relative to foreign investment

Freedom of establishment: Usually guaranteed.
Investment in certain domains which might affect national security may be limited.
Acquisition of holdings: The majority acquisition of holdings in the capital of a local company is authorized in Russia.
Obligation to declare: No obligatory declaration, except for banks.
Competent organization for the declaration: Bank of Russia
Requests for specific authorizations: Natural resources, energy, transport, communications, defense industry.

Finding assistance for further information

Investment aid agency: National agency for direct investment
European Bank for Reconstruction and Development
Federal agency for the Management of Special Economic Areas
Other useful resources: Ministry of Economic Development and Trade