Russia and the CIS have many advantages for foreign investors, such as abundant natural resources and strong domestic markets with well educated, highly productive workforces. However, administrative barriers, lack of transparency in business practices and a recovering financial system often compromise these benefits.
A huge potential of Russian market for foreign entrants is quite obvious due to the set of well-known reasons. But what is not obvious that there are also some specific features of the market that make it hard if not impossible to assess or analyze without local expertise. Foreign companies, which want to enter Russia and CIS growing market, often face several difficulties:
- Absence of reliable information on market (volume, structure, main competitors, trends, distribution channels, prices)
- Lack of knowledge of Russia and CIS business customs
- Language difficulties
- How to find a reliable partner in Russia and CIS;
- Which is the most effective way to enter Russian market?
On the basis of our deep knowledge of Russia and CIS business and wide network of contacts in different areas we are helping Indian companies to enter Russia and CIS market and to secure it.
We will be doing:
● Assessment of market, segmentation and niche identification;
● Understanding of market structure, value chain and channels of distribution;
● Identification of the most promising geographical markets, segments and sales channels for the company;
● Market entry strategy development: distribution, marketing, pricing.
● Choosing the most efficient model of market entry: independent entry or partnership, exporting or local production;
● Help in finding a local partner.
● Identification of sales growth potential on Russian and CIS markets, where you are already present.
We will also help you in setting up a subsidiary or in opening up a new company.
Setting up of subsidiary in Russia / CIS by the Indian companies:-
Here we are considering only Russia. At the same time, we would also like to mention that the Incorporation laws vary from country to country in the CIS. We possess all the expertise to set up a legal entity in any of the CIS countries.
Representative Office and Branch
The officially recognized subdivision of a foreign legal entity is an accredited representative office. The foreign companies could engage in commercial operation under a strict interpretation of the law. It could be done through registering a branch or a company in Russia.
There is a special procedure for registering the Branch with the Russian authorities.
● This procedure consists of several stages:
● Accreditation with federal bodies.
● Tax registration.
● State statistics authorities registration.
● Pension, medical and social security funds registration.
Then it is necessary to open the bank account.
Limited liability companies
A limited liability company (LLC) is a flexible form of enterprise that blends elements of partnership and corporate structures. Under the Civil Code, a limited liability company is established by one or several persons whose charter capital is divided into shares.
The company is taxed at the corporate level, and then, upon distribution of dividends, shareholders pay income tax (personal or corporate). A limited liability company is the most popular form of legal undertaking in Russia for simple shareholding structures.
Concerning to the Civil Code of Russian Federation, a joint-stock company is company which capital is divided into shares. The shareholders are not liable for its obligations and accept the risks of losses within the limit of their respective stakes. Shareholders could sign any agreements that will regulate their rights.
JSC may issue stock. There are open and closed joint-stock companies in Russia. In the whole world it is known as private and public companies. Open joint-stock companies must disclose certain financial and other information annually.
From the moment of the company’s register, it is considered that it is created. It could be created as a new entity as through reorganizing. The charter of the joint-stock company is 1,000 shares. Depending on the number of shareholders, there are different management bodies. In the company where are less than 50 shareholders the management Body is General Meeting of Shareholders. The board of directors takes place in joint-stock company that has more than 50 shareholders.
The liquidation process might be:
● court decision
Full and Limited partnerships
Concerning to the Civil Code of Russian Federation two partnerships could be registered:
- Full partnership.
The partners bear (full) joint and some liability for the partnerships obligations.
- Limited partnership.
It has both full partners and partners whose liability is limited to their contributions.