Open a Joint Stock Company in Russia

Opening a joint stock company in Russia is a straightforward process that requires attention in terms of formalities. With the help of our company formation agents in Russia, you can benefit from support in order to fulfill the conditions for opening such a business structure. We invite you to discover some important information about joint stock companies in Russia and how these can be incorporated.

Quick Facts
Purposes of a JSC in Russia	– commercial activities, – capital raising, – investor participation etc.
Registration authority of a JSC in Russia	The Trade Register of Russia
Legislation base	Governed by the Civil Code and Federal Law on joint stock companies.
Minimum share capital required	RUB 100,000 for opening a JSC in Russia
Requirements for a JSC in Russia	– minimum number of shareholders: 2, – statutory documents, – management structure, – registered office
Constitutive meeting required [YES/NO]	YES
Signature sample solicited for registration [YES/NO]	YES
Number of directors	Minimum 1 director, with no residency requirement
Management requirements	Can be managed by a Board of Directors, structure defined by the statute.
Requirements for opening a bank account specific for JSCs	company documents, ID of signatories, proof of registration
Board of executives meeting requirement [YES/NO]	YES (annual meetings required)
Corporate income tax rate	Typically 20%, depending on specific conditions and deductions
Dividend tax rate	13% for residents, 15% for non-residents (may vary based on treaties)
Time frame for registration	Usually 5 to 10 business days, depending on completeness of documentation
Working with our Russian agents	Recommended for navigating local regulations, compliance, and efficient processes.

What are the steps for opening a joint stock company in Russia?

To set up a joint stock company in Russia, the following steps are required:

• Registration with the tax authorities;
• Registration with State Committee;
• Company seal creation;
• Registration with the State Statistics Committee; 
• Registration with social insurance funds (Pension Fund, Social Security Fund, Obligatory Medical Security Fund);
• Registration of the shares issued by the joint stock company with the Central Bank of Russia.

The entire process of company formation in Russia for a joint stock company could take up to two months. In some cases, approval of the Federal Antimonopoly Service may be required depending on the size and significance of the assets or revenue of the founders. Our specialists in company formation in Russia are available to assist you through the registration procedure.

Public joint stock company 

The key characteristics of a public joint stock company incorporated in Russia are as follows:

• The legal name and the charter of the company must show that it is a public entity;
• There is no limit on the number of shareholders;
• The company is allowed to distribute shares via open subscription and/or via the stock exchange; 
• It may not have as its sole shareholder another business entity consisting of a single entity;
• The charter capital must be at least 1,000 times of the statutory monthly minimum wage (in current term,  RUB 100,000);
• The company board of directors shall consists of at least five members;
• The functions of the Registrar and the accounting commission must be done by an independent licensed organization;
• The Charter cannot make reference to the competence of the general meeting of shareholders for functions not listed by the Russian Federation Civil Code and the laws on joint stock company.

Private joint stock company in Russia

The key characteristics of a non-public joint stock company incorporated in Russia are as follows:

• The shares and securities of the company are not publicly listed and it is not open for subscription;
• No obligation to establish a board of directors;
• The number of shares and votes that belong to one shareholder as well as the nominal value of shares can be restricted;
• The charter capital must be at least 10 times of the statutory monthly minimum wage (in current term,  RUB 10,000);
• The charter of the company can make reference to the competence of the general meeting of shareholders for functions not listed by the Russian Federation Civil Code and  the laws on joint stock company.

The flexibility of joint stock companies in Russia

As mentioned earlier in this article, joint stock companies in Russia are a popular structure among international and local entrepreneurs, due to their flexibility and more. Here are some of the most important aspects in this regard:

• In general shareholder’s meetings, the management can be in charge of questions related to the business they handle, in this case, the joint stock company in Russia.
• In a private JSC in Russia, the board of directors can also act as a supervisory body. Moreover, a single director can substitute for the management board in the firm.

Considering the above, you can decide what kind of joint stock company you can establish in Russia. In this regard, we remind you that our company formation agents in Russia will be able to assist you with the formalities involved, so do not hesitate to contact us.

Audit for joint stock companies in Russia

Auditing the annual accounts for a joint stock company in Russia requires an external auditor. In this sense, the following information is important if you are thinking of setting up a joint stock company in Russia:

• The audit committee is needed for public joint stock companies in Russia. The committee can be appointed by the board of directors.
• Also, an executive in charge of organizing and performing an internal audit will be appointed for the assessment of risk management and the efficiency of internal control systems.
• The internal audit can take place on the initiative and the decision of the shareholders, following a meeting in this regard.

Transfer of shares of a JSC in Russia

It is good to know that the shares of private and public joint stock companies in Russia are treated like securities and must be registered in compliance with the Securities Market Law. As such, issuing new shares means carrying out requires filings with the Central Bank of Russia, as the legislation stipulates. As such, the decision of issuing shares, alongside the prospectus for issued shares are the documents requested in this endeavor.

On the other hand, once the share transfer is registered in the company’s documents it will then take effect. Public joint stock companies in Russia can make closed and public offerings of shares in Russia, without restrictions on transferability to third parties. In the case that 30% of shares are acquired by a third party or existing shareholder, a buyout offer is required to be backed by a bank guarantee.

Managing a joint stock company in Russia

Managing joint stock companies in Russia is relatively simple if certain rules and formalities are taken into account. Here is what you need to know in this regard:

• The board of directors of a JSC in Russia must be composed of at least 5 members. They are in charge of general meetings with shareholders, transaction approvals, supervision of activities and company staff among others.
• The CEO of the joint stock company in Russia is responsible for daily operations and may have the support of a collegial executive body, but this is optional. The same CEO appointed in a JSC must ensure good management of the company’s transactions, act on behalf of the company, and manage staff.
• One of the important rules in managing a joint stock company in Russia is to appoint two auditors, one internal and one external. Here we offer you the services of our accountants in Russia to learn more about what the audit process for joint stock companies entails.

Therefore, joint stock companies in Russia must comply with certain management rules, for a good and correct operation. Moreover, they make the subject of public information disclosure, among others. We invite you to collaborate with us if you want to set up a company in Russia and especially a joint stock company.

What are the advantages of joint stock companies in Russia?

There are many reasons to believe that a joint stock company can be the ideal business entity for a foreigner in Russia. Here are a few examples:

• The long-term existence is connected to joint stock companies in Russia.
• The members forming the joint stock company in Russia are not liable for any company debts or losses.
• Because of the issued stocks, JSCs in Russia have complete access to large capital contributed to the company.
• The directors of joint stock companies in Russia are selected by the owners.
• Fiscal funds and liquidities can be used by joint stock companies in Russia.

Private and public joint stock companies in Russia are often the options at hand for foreign entrepreneurs who want to develop their operations in this country at a large scale. The management of such a structure can be expensive and quite complex, but there are quite a few reasons why it is chosen as a business option. The taxation system and the attraction of investments in the portfolio can be considered strong points at the time of incorporation of a joint stock company in Russia.

We remind that our local specialists can help you set up a company in Russia by handling the formalities of the selected structure.

Making investments in Russia

Even in the social context, Russia is still a solid business destination and on the list of international investors with perspectives. You might want to read the following facts about Russia’s economy:

• According to recent data, the Russian GDP grew by 3.6% in 2023, and it is expected to reach around 4% by the end of 2024:
• The fiscal incentive reached around 10% of the GDP in Russia, during 2022 and 2024, while preferential loan portfolios in the banking sector topped around USD 150 billion.

For more information on setting up a joint stock company in Russia and on the relevant legislations and corporate governance, please contact our Russian experts on company formation in Russia.