Note: the following discussion applies mostly to small- to medium-sized companies. Multinationals often have other concerns.

Q: Should I set up a company in Russia?
Q: How does one open a company in Russia?

Q: Should I set up a company in Russia?
A: We normally first get asked "How do I set up a company in Russia?" but after some consideration, companies often find that setting up a Russian company is not necessary.

Setting up a company in Russia is more expensive than in some other jurisdictions, but not very expensive. A few thousand dollars should cover most of the legal and administrative bills. However, Russian regulations require that accounts be filed with local authorities each month. This requires an inordinate amount of book-keeping (good accountants are in high demand in Russia and relatively expensive) and management oversight for small companies. Many small companies find that there are other ways of accomplishing their objectives.

The main need for reason for having a local company is if one wants to be able to sell locally for rubles - foreign firms cannot have local, ruble bank accounts and therefore cannot make local transactions. Owning property, running a warehouse, operating a factory, etc. might require a local company.

However, most companies will start doing business in rather large wholesale lots taking direct payment overseas and taking rubles is often not such an attractive option anyway. Foreign companies can rent premises, hire staff, etc. indirectly by passing transactions through a local company or law firm which is often a cost-effective and hassle-free alternative to opening an unnecessary company.

If one finds that a company is necessary or desirable, we often recommend doing this in partnership with Russians. We discuss the benefits of having good Russian partners in several places in this document, but there are some particular advantages when opening a company: local firms or individuals generally will tend to know about local legal and tax regulation, personnel policies, etc. They may also have premises in which the new organization can 'camp out'. Local partners can often improve ramp up time, lower costs, reduce the potential for costly mistakes and generally save time and hassle.

Q: How does one open a company in Russia?
A: Company registration is complex. Don't try to do it yourself. The first step is to find a good lawyer or company that can do the paperwork for you. There are an increasing number of such firms, and finding one should not be a problem. The foreign partner will certainly have to supply a variety of documents (business license, incorporation documents, perhaps bank references, etc.); regulations do not seem to be consistent, so these must be checked case by case. Sometimes documents must be notarized, and sometimes official translations (verified by, for example, a Russian embassy in your country) must be provided.