One of the ways in which a business can be opened in this country is through a special purpose vehicle/entity (SPV/SPE), a special legal entity which can be registered as a subsidiary of a foreign company. Unlike the general understanding of a subsidiary, the SPV/SPE company may secure its own assets in a manner in which the respective business will be protected even in the situation in which the parent company enters bankruptcy. Our company formation agents in Russia can offer an in-depth presentation on the registration procedure available for this vehicle.
Formalities to register a SPV/SPE business in Russia
In order to register a company in Russia under a SPV/SPE, the entrepreneur must establish its legal entity. This type of business can be set up as one of the following:
• joint-stock company;
If Russia is the country where you want to carry out your activities, we recommend that you also use the specialized services of our accountants in Russia. Payroll, bookkeeping and submission of annual financial statements are among the most important procedures necessary for the smooth running of a company. Therefore, contact our experts for in-depth support and guidance in this matter.
Holding companies for setting up an SPV/SPE business in Russia
In Russia, holding companies for establishing an SPV/SPE business can also be chosen from the following considerations:
- • The company can be controlled by shareholders without residence in Russia.
- • There may or may not be hired employees, depending on the projects of the owners of this type of business.
- • There is no need for a physical presence in Russia.
- • Business assets can be located or registered in countries other than Russia.
- • Holding companies can be traded on foreign markets.
- • Taxes can be minimal for this type of business structure.
- • There is legal protection for this kind of business established in Russia.
- • SPV/SPE company in Russia can be treated like a non-resident, under the shell of the holding company.
- • A holding company in Russia can also be chosen to protect the identity of true shareholders of an SPV/SPE business in Russia.
So, if you want more information about how to set up an SPV/SPE business in Russia through holding companies, don’t hesitate to contact our specialists. We are at your disposal with information about company incorporation in Russia and the formalities involved.
Top uses for SPVs/SPEs in Russia
The following information may interest you when you want to register an SPV/SPE in Russia:
- Securization – With the help of SPV/SPE in Russia you can secure specific assets and/or other receivables. Such assets can be purchased by issuing debt secured on these core assets. Thus, holders of the asset-backed securities have priority in receiving payments on the debt while restraining the option to the initiator of the assets above-described.
- Asset transfer made easy – The same business structure is optimal for transferring assets along with related material arrangements. This option allows the transfer of all or a certain part of the company ownership without touching the physical agreements that might be required to retain the value of the specific asset.
- Financing – It is a good idea to set up an SPV/SPE business in Russia for financing purposes. This vehicle can be used for ring-fence investments and financing without raising debt levels for the foreign company or revealing the assets to cross-liabilities.
- Real estate investments – An SPV/SPE business in Russia can serve to purchase real estate properties and to limit the route of mortgage creditors liable on the location of the specific asset. Certain jurisdictions allow lower tax rates with the help of the sale of the SPV’s shares, compared to the fees imposed on the asset transfer.
- Intellectual property – This can be exploited to separate significant IP into a detached SPV that has the smallest obligations. An SPV/SPE in Russia can also be an effective instrument to run products with a wide range of IP mechanisms.
- Raising capital available – An SPV/SPE can also be applied for raising capital at positive rates in precise conditions, with credit value concluded by the available guarantee of the SPV.
Legislation referring to SPV/SPE companies in Russia
The SPV/SPE companies in Russia are regulated under the Securitization Law, which was amended in 2013 to provide a clearer framework available for this type of entities. The Russian legislation prescribes two main types of securitization, which refer to financial assets and infrastructural bonds.
Those who are interested in company formation in Russia under the form of a SPV/SPE should know that there are two main categories, which are prescribed in accordance with theform of securitization preferred by the investor.
Thus, the law recognizes the following:
• special purpose financial company;
• special purpose project financing company.
The second type of SPV/SPE is created for infrastructural bonds and businessmen are required to invest on a long term basis in this type of company. The minimum period refers to an investment project created for at least three years and our team of company formation agents in Russia may offer further information on the requirements to set up this legal entity. We can help international investors open a company in Russia in a reliable and fast manner.
Making investments in Russia
Russia has always been an optimal business destination for international entrepreneurs interested in extending their portofolios in a stable and solid economic climate. If you want to invest in this country, the following figures and statistics might interest you:
- • Russia’s GDP contracted by 3.5% YoY (year on year), according to data for December 2022.
- • In December 2022, Russia’s nominal GDP reached about USD 677.5 billion.
- • Around USD 15,074.8 was Russia’s GDP per capita registered in December 2022.
We invite you to contact our company formation consultants in Russia for more details referring to the registration of a SPV/SPE company.