For overseas companies thinking of investing in a new, small-to-medium enterprise in Russia, it’s worth remembering things have changed.
Russia is keen to encourage the launch of start-ups and small businesses and has massively simplified the regulations connected with them.
One key advance has been that, until fairly recently, any Russian-based start-up company would be denied advantageous SME status if more than 49% of its capital came from overseas.
Now it’s possible for micro, small or medium-sized foreign companies to invest more than 49% in a small business in Russia, without the Russian firm losing its valuable SME status, provided the investing company meets certain additional criteria in its home country. These include:
- Income received in the previous calendar year must not exceed the equivalent of RUB2bn or roughly USD28.8m or EUR25.2m euros.
- No more than 250 staff were employed on average in the previous calendar year.
- The business is not located or registered in an offshore zone.
If the investing company meets the above criteria, they should be confirmed by either an audit organisation or share register keeper, depending on the organisational and legal structure of the business.
However, if the overseas company’s capital investment share doesn’t exceed 49% of the Russian business, the above requirements do not apply.
For more information, contact: