A subsidiary established in Russia is a Russian company where a majority of capital or shares with voting rights are owned by a foreign legal entity. For a proper perception of how a subsidiary can be established in Russia, we invite you to contact our team of company formation agents in Russia. We can manage the formalities linked to company formation in Russia and also provide you detailed information about subsidiaries, in this article.
| Quick Facts | |
|---|---|
| Applicable legislation (home country/foreign country) |
Regions may impose their own legislation |
|
Best used for |
– banking, – insurance, – manufacturing, – trading |
|
Minimum share capital |
Yes |
| Time frame for the incorporation (approx.) |
Around 8 weeks |
| Management (local/foreign) |
Local |
| Legal representative required |
Yes |
| Local bank account |
Yes |
| Independence from the parent company | Yes |
| Liability of the parent company | No, the subsidiary is liable for its debts and obligations |
| Corporate tax rate | 20% |
| Possibility of hiring local staff | Yes |
Table of Contents
How can I open a subsidiary in Russia in 2025?
A foreign investor can incorporate a subsidiary in Russia in 2025 in the form of a private limited liability company and a public limited liability company, open or closed. The limited liability company can be founded by one or more shareholders (maximum 50), with a minimum share capital of RUB 10,000. Half of the minimum share capital must be deposited in a bank account before the registration is done, and the other half in a maximum of three months from the date of incorporation. You should also consider the following steps in a subsidiary formation in Russia:
- the management is assured by a board of directors and an executive committee, appointed by the general meeting of the shareholders;
- the capital of such a company is divided into non-transferable shares;
- the liability of the shareholders is determined by their contribution to the capital;
- a subsidiary needs to be registered with the tax authorities in Russia.
More about how to open a subsidiary in Russia in 2025 and the requirements that must be respected can be discussed with our Russian specialists. Also, you may explore this infographic with details on this subject:
Necessary documents for opening a subsidiary in Russia in 2025
With complete support offered by our team of company incorporation consultants in Russia, a subsidiary is registered with documents like the Articles of Association (in a notarized form), the declaration provided by the foreign company that intends to open a subsidiary in Russia, statutory documents, and the registration application form. The Russian Trade Register is in charge of subsidiary incorporation in Russia. Complete information about how to establish a subsidiary in Russia in 2025 can be provided by one of our Russian specialists in company formation.
Subsidiaries registered as joint stock companies in Russia
Two types of joint stock companies can be registered in Russia: open – when the shares are freely transferable to the public, or closed – when the shares are transferable only between the shareholders in the company. An opened joint stock company is based on a minimum share capital of RUB 100,000 while RUB 10,000 represents the minimum share capital that must be deposited by the closed joint stock company. The management is assured by the general manager, but if the company has more than 50 shareholders, a board of directors must be appointed. Also, a supervisory board can be appointed, but it’s not mandatory.
Choosing between subsidiaries and branches in Russia
Both domestic and international entrepreneurs have the same business rights in Russia, however, they need to choose the proper entity that suits most of the needs and activities they want to develop. In this case, it is recommended to understand in the first place the differences, advantages, and disadvantages of branches and subsidiaries in Russia. For example, a branch will completely depend on the parent company, compared to the subsidiary which is 100% independent. In matters of registration costs, branches are more expensive compared to subsidiaries.
Also, there are restrictions when it comes to licenses and permits, meaning that branches cannot perform specific operations, a matter where subsidiaries are advantageous. A branch will only have to develop the specific activities as established by the foreign company, while the subsidiary in Russia is free to change the operations or add new ones if that is the case. As for the taxation of these entities, the profits of subsidiaries are protected by the double taxation treaties signed by Russia with countries worldwide, while branches will only pay the taxes imposed on the incomes registered in Russia.
You can also watch the following video presentation on this subject:
Accounting services for subsidiaries in Russia
Subsidiaries might seem complicated from a taxation point of view, but instead of dealing with such aspects, you can decide on the services of our accountants in Russia. This is in many cases the ideal choice of foreign entrepreneurs in Russia instead of creating a whole new accounting department.
Tax registration and reporting, tax planning, payroll services, audits, annual financial statements, tax management, and tax minimization methods are part of the accounting services we can provide for your subsidiary in Russia if you decide to hire us.
The advantages of subsidiaries in Russia
Subsidiaries in Russia are separate legal entities and are not limited in matters of business licenses and can apply in agreement with the applicable laws. The double taxation treaties signed by Russia with different countries worldwide apply to all subsidiaries in Russia in terms of taxation. It is good to know that the registration process of a subsidiary in Russia is not time-consuming or bureaucratic, letting foreign companies establish their operations rapidly.
Russia’s economy in numbers
Despite the recent challenges of Russia’s social context, the country remains on the list of foreign entrepreneurs interested in business expansion. The following information may give you an idea of Russia’s economic direction:
- The economy in Russia grew by approximately 4% in 2024.
- The manufacturing sector of Russia rose by 8% in 2024. This significant business sector was the one that mainly supported the economic growth in Russia in 2024.
- Russia’s defense expenditure is expected to reach around USD 132 billion in 2025, representing about 6.3% of the country’s GDP.
- On the other hand, it has been registered an annual profit of around USD 40.7 billion by the banks in Russia in 2024.
Setting up a company in Russia is not a complicated process, However, we recommend from the start the services of our experts in company incorporation in Russia, including for subsidiaries. Please explore our website for information and also contact us at any time for extra details.