Starting a Business in St. Petersburg
Foreign investments are of great value for the economy of the Russian Federation, so the government makes sure investors feel welcome in the market. In mid-2011 the government of St. Petersburg introduced the Program to Improve the Investment Climate in 2011-2015 (Resolution #834 of 28.06.2011), which aims to increase the investment potential of St. Petersburg while at the same time reducing investment risks. Part of the program simplifies the investment process so as to be attractive for investors.
The terms of the foreign investment activities in Russia are stipulated in the federal law № 160-FZ “About the foreign investments in Russian Federation”
According to this law all foreign investors (i.e. foreign legal entities, citizens, people without Russian citizenship, international organizations and foreign states) can enjoy the whole list of benefits and guarantees while working in Russia.
Possible options for foreign investments
1. Create a legal entity in Russia
Registration of an enterprise with a foreign investor follows the same procedure as any other enterprise as per federal law № 129-FZ “About the state registration of legal entities and entrepreneurs”:
You may need the following documents:
– application for the registration
– resolution of the legal entity set up as a protocol, agreement or any other document in accordance with the Russian legislation
– constituent documents of the legal entity
– an extract from a register of foreign legal entities of a corresponding country or any legally equivalent proof of legal status of a founder
– state due payment document (4000 RUR – €100)
You may choose to prepare all the documents yourself or ask a certified barrister or lawyer to help you with it. (This may cost from 15000 to 2000 RUR (€350-480).
2. Purchase a share in one of the existing Russian companies
The purchase must be approved by these authorities as sometimes the antimonopoly service may be engaged.
3. Create a branch or a representative office of a foreign legal entity
The difference between a branch and a representative office is in the amount and the type of its activities. The representative office is created to present and act in the interests of a foreign legal entity, while the branch office performs all or part of the functions of the foreign legal entity and may also include a representative office.
Neither the branch nor the representative office is an independent legal entity, as the foreign (parent) company is responsible for their activities.
The branch office gets an accreditation for 1-5 years; the representative office only for 3 years (extension needed).
Registration fees are 30000 to 40000 RUR (€700-950).
Russian Federation has some strategically important restrictions for foreign investments into:
- the state defense: nuclear machinery, radioactive substances, military and aircraft vehicles, space research
- mass media: television and radio broadcasting, editorial office or publisher of a big periodical print (more than 1 million copies), polygraphic activity (more than 200,000 copies per month)
- telecommunication (except access to the internet)
- minerals or natural resources (geological research, mining operations)
Please see the detailed list in law N 57-FZ – “Foreign investments into the organizations strategically important for state safety and defense”.
More information on this topic
The Investment and Strategic Projects Committee of St. Petersburg has created Investor Guidelines, which provides investors with all the information they may need to evaluate the object of interest and make the right decision.
www.cisp-spb.ru/SitePages/Home.aspx – the official website of The Committee for Investment and Strategic Projects
www.st-petersburg.ru – rates investment attraction based on the analysis of over 50 international ratings
www.investinfo.spb.ru – contains information about the existing investment objects and the newest development projects planned
www.hotelinvest.ru – supports investors throughout all hotel property projects, starting from market overview and ending with the hotel infrastructure development
In St. Petersburg you can get professional legal assistance with your company registration. The following are some firms that provide this kind of service:
Branch office of Baker & McKenzie in St. Petersburg www.bakermckenzie.com/ru-RU/Russia/StPetersburg/
Mauer Group: www.mauer-group.ru
Translation by Svetlana Serebryakova
Edited by Erin Swanson