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Russia

 
   
Executive Summary
Russian Federation is the world’s largest country covering almost 1/6 of the Earth land area – 17,075,400 sq km, it consists of 83 federal subjects and extends over two continents – Europe and Asia. Moscow is its capital and St. Petersburg is the second major city with a not less important history and cultural heritage. Its population exceeds 140 million people, the country covers 11 time zones and its nature is very diversified, having the world largest resources reserve and it is considered as energy superpower. Russia possesses large forest reserves and its lakes contain approximately ¼ of the world’s unfrozen fresh water.

Since the collapse of the USSR Russia has managed to establish and develop friendly relations with EU and NATO as well as it is one of five permanent members of the Security Council of the UNO. Russia conducts a diversified international politics and has established diplomatic relations with a large number of countries. It has a strong military industry and its scientific research is well developed. Russia is the leader in the number of higher education graduates in Europe.

Political stability and major foreign investments starting from the end of 1990ies in the country have significantly improved and accelerated economic development. Oil, natural gas, metals and timber are exported and constitute 80% of all the exported goods.  There is uneven development of different zones of the country with Moscow and St. Petersburg being significantly different from the rest of Russia. The country has a comparatively low number of middle class representatives on the national level, even though it continues to grow together with the overall tendency of strengthening the internal market

Geography
Due to its size Russia possesses a wide diversity of climates, flora and fauna. Its forests produce a big part of the world oxygen, and the access to three oceans ensures a huge contribution to the world’s fishing industry. Mount Elbrus (Caucasus) is the Europe’s highest point – 5,642 m. Ural Mountains divide Europe from Asia and are rich in minerals. 10% of the world’s arable land belongs to Russia. There are thousands of lakes and rivers on the territory of the country. Baikal is the world’s deepest and purest lake.

It is hard to define the climate of Russia as there are too many and too diverse factors that have impact on its formation in various zones. However, it is considered as continental climate, January-February are the coldest months, while July is the hottest month of the year.

Map, Flag and Coat of Arm
 


Types of Company

Branch and Representative Office

Any foreign company can register a branch or representative office in Russia; not being a separate corporate entity the activities within Russia are regulated by local authorities.

Public and Private (shareholding) Company
Every shareholder is liable up to the value of the shares belonging to it. Public company can offer its shares to the general public.

Partnership
General partnership is the structure within which partners agree to cooperate and conduct a business activity under the same name and are fully liable to the debts of the partnership. All the parties should sign the constitution agreement.

In order to constitute a limited partnership there should be at least one unlimited and at least one limited partner who does not directly take part in partnership’s management, and is liable to the debts of the partnership up to the capital invested.

Limited Liability Company
This structure can be formed by one or several (not more than 50) shareholders and the liability is limited to the capital invested.

Taxation
Tax returns should be submitted quarterly and the annual tax return form should be filed not later than on the 28th of March of the following tax year.

Personal
A new fiscal policy introduced in 2001 significantly reduced personal income tax, and as a consequence achieved major state revenues. A flat rate of 13% as personal tax has been approved by the government.

Corporate
Local and international companies are liable to pay income tax on profits generated in Russia, while several companies are taxed on the worldwide revenues. Income tax rate is 24% of which 6.5% is payable to the central government and the rest to the regional authority, which can be reduced up to 4% constituting a 20% income tax rate. Standard capital gains tax is 24%, but it can be reduced to 20%. Social security contributions are payable. All the companies registered in Russian Federation automatically become VAT payers, the standard rate of which is 18%, and a reduced rate – 10%. Other significant taxes are asset (up to 2.2%) and advertising (5%) taxes.

 
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