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Russian Company Formation

Russian company formation has become more attractive recently as foreign investors attempt to gain access to one of the world's richest stores of natural resources. Russia also delivers many geographical benefits, and offers a vast consumer market that is becoming more inclined to spend money as it becomes more comfortable with capitalism and corporate globalization. Many nonresident entrepreneurs have discovered abundant investment opportunities, and the potential for new markets in significant numbers grows daily.

And though the corporate climate in Russia is rich in regulatory requirements and very strict about regular VAT reporting, Russia has done an incredible job the last few years attracting large volumes of international capital. The reason is Russia has decided to adopt a Germanic banking structure that permits banks to hold large stakes in non-financial firms. That has attracted many western banks, and branches of storied financial institutions such as HSBC and Barclays now call Russia home, lending credence to the Russian corporate climate and attracting more overseas investors.

For the foreign investor seeking Russian company formation and looking to open the doors on a physical business, the workforce is highly skilled, well trained and educated. Due to the nature of the previous governing body in Russia, workers are also highly dedicated and loyal. But one of the things that has stuck with Russia over the years is its corporate regulatory environment. Although Russian company formation is now available to the nonresident investor, something that would have been unheard of years ago, expert guidance and an intimate knowledge of the local Russian business requirements is paramount. Having access to local Russian attorneys and accountants who understand the strict corporate regulations that must be met is absolutely vital to benefit from Russian company formation.

And while the regulatory environment in Russia for the foreign investor is strict, and Russia provides few financial incentives for corporation formation, they do offer a wider range of corporation options than most European countries. Overseas investors can open a Limited Liability Company (OOO), a Closed Joint Stock Company that is privately held (ZAO), an Open Joint Stock Company which is publicly held (OAO), a Branch Office or Representative form of a current foreign company or they can conduct business as an Individual Private Entrepreneur.

While the filing process for Russian company formation is one of the more stringent in Europe, the benefits are many. Many Russian company formation entities have absolutely no restrictions concerning foreign or Russian shareholding. And some of the more common and popular foreign-owned corporations require only a minimum of one shareholder and director. Also, when you register as a Branch Office or Representative Form of a foreign company, no authorized capital is required. The process can be very difficult if you seek Russian company formation unless you employ a European firm who has local pros on the ground in Russia, and the reward is access to burgeoning new markets, a growing modern banking system, and important access to one of the largest global stores of natural resources.