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Open an Offshore Company in Russia

Open an Offshore Company in Russia

There are special economic zones where foreign entrepreneurs can open an offshore company in Russia, and this because the legislation of the Russian state does not allow the establishment of such companies in the entire country. We recommend those interested in starting an offshore company in Russia confidently contact one of our company formation representatives in Russia for complete information and support. Our team can help entrepreneurs open a company in Russia and manage the paperwork.

Special economic zones for opening offshore companies

As we mentioned at the beginning of this article, Russian legislation is not permissive regarding the establishment of offshore companies. However, there are special economic zones, created on the territory of Russia, where those who want to open an offshore company in Russia can benefit from a preferential tax system. Among them, we list:

Registration steps of an offshore company in Russia

If you want to open an offshore company in Russia, you must choose the right business structure. Most foreign entrepreneurs choose a limited liability company in this case. Here are other formalities to take into account:

  • Foundation documents are requested. Articles and Memorandum of Association can be prepared by our specialists.
  • Opening a bank account and obtaining a company seal are other important aspects linked to an offshore company in Russia.
  • You must consider the registration for the payment of taxes in Russia.
  • It is recommended to have the support of an accounting firm for your offshore company in Russia and to contract the necessary services in this regard.
  • Those who want to hire staff from countries other than Russia must consider the immigration formalities. In this case, a work and residence permit is needed.

What activities can offshore companies undertake in Russia?

The special economic zones of Russia mentioned above allow the establishment of offshore companies, and these are divided into several economic sectors, for different activities. For example, imports and exports of goods are accepted, without them becoming the subject of customs duties.

This is an advantage for foreign investors who want to carry out their business and operations on the territory of Russia, without submitting to an expensive tax system. Regarding how to open an offshore company in Russia, we recommend those interested contact one of our local specialists to benefit from support in this endeavor. We are here to help you set up a company in Russia.

How many years can an offshore company operate in Russia?

Offshore companies in Russia can be active in this market for around 15-20 years. Thus, companies of this type, established in jurisdictions such as Saint Petersburg, Dubna, or Murmansk, can have a validity of up to 20 years. We recommend that after the establishment of an offshore company in Russia, you also contact our accountants in Russia to be able to align with the legislation in force in this field, as well as with the financial requirements. More about company incorporation in Russia can be found if you solicit our support.

Offshore zones in Russian Island and Oktyabrsky Island

According to Law no. 291-FZ, Primorsky Krai of the Russian coastal region and Oktyabrsky Island of the Kaliningrad Region are two special administrative regions where international companies can operate. There are a series of tax benefits and even a special currency regime that encourages the attraction of foreign investors in Russia’s business climate.

Credit institutions, as well as payment infrastructure or payment systems operators, are not accepted in this line of business. On the other hand, it is allowed to re-domicile foreign companies in the offshore zones mentioned above.

Our company formation specialists can help you with opening offshore companies in Russia, respectively with the formalities involved in this process.

International changes for offshore zones and Russian companies

In 2023, certain changes were made regarding offshore zones globally. The previous list included 42 offshore territories, but it was expanded to 91. Thus, states that are currently in social debates with Russia were introduced, and this might directly concern Russian taxpayers. Here is what this means in general:

  • Russian enterprises that receive dividends from foreign companies established in the countries on the modified list will no longer benefit from tax exemption.
  • Transactions with Russian companies from the countries on the list of offshore territories may be controlled.
  • The problem of property rights taxation was raised, which could be introduced, and not exempted as it was before modifications brought in 2023 referring to Russian offshore companies.

Opening an offshore company in Russia requires attention regarding the changes made to the legislation. This is also valid for Russian companies located in offshore territories. We recommend specialized assistance and invite those interested to contact our Russian local agents.

Statistics about companies in Russia

Discover below some statistical data about companies registered in Russia:

  • In 2021, over 47,000 limited liability companies and around 329 joint-stock companies were registered.
  • Although over 500 companies have suspended their activity, according to the data for the end of 2022, they keep open the option of returning to the Russian market.
  • The data for June 2022 showed that over 3.6 million self-employed operated micro-sized enterprises in Russia.

How can we help foreigners open offshore companies in Russia?

The business climate in Russia can be different in the current social and political context. Caution is recommended in the business environment, especially when it comes to offshore companies, where certain rules have been changed. There may be situations where opening an offshore in Russia requires more time and extra documents. Therefore, it is recommended to have the support of a team with experience in registering offshore companies in Russia, such as our specialists in company formation.

We invite you to contact our company formation agents in Russia to find out all the details about company formation in Russia, including offshores.