Types of Entity in Russia

One of the first questions which foreign entrepreneurs face when starting doing business or investing in Russia, is the type of entity, which will best suit the needs of future activity. The choice you make on this stage will let you avoid the difficulties, connected with a procedure of reorganization and other substantial obstacles.

The form of legal presence in Russia influences all aspects of activity including possibility for making deals and tax consequences of the deals, financial and tax accounting and reporting, possibilities under customs, currency control legislation, ability to employ foreign nationals, repatriation of income, application of international treaties and many others.

The Civil Code of the Russian Federation provides for different types of legal entities among which the most common commercial organizations are Limited Liability Companies ("OOO") and Joint Stock Companies ("AO"). The Civil Code also includes provisions about general partnerships, additional (or unlimited) liability companies and non-profit organizations.

For example if You are going to organize business jointly with several partners, providing there are stable and trustful relations with the partners, You don't want an entity with a complicated inner structure and would like to avoid additional risks - the best type of entity will be "OOO". If you are planning to establish an entity, which will be independent from the decisions of its separate founders and will have a regulated management structure You should choose either "ZAO" or "OAO".

Here you can find information about the current legislation and legal entities in the Russian Federation.

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