While investment here presents its share of problems for Western companies, from legislation in flux to a haphazard tax regime, the one step that puts investment in motion-could be one of the most taxing.
Missed signatures, improper translations, missing documents and long lines at virtually every registration point are the common problems most companies endure.
Registering in Moscow typically takes four to six weeks. The process can be smoothed out with the use of Western law firms, but the price can range as high as $20, 000.
"The process is not designed to attract small investors, it's a shame", said James Mandel, an attorney with LeBoeuf, Lamb, Leiby & MacRae.
The initial documents required for registration from the home country must all be originals and notarized either by a Russian embassy abroad or a foreign embassy in Moscow.
They include: a certificate of incorporation; company by-laws; a bank letter, a power of attorney which gives locals the right to sign documents; a written decision by the board of directors on forming the Russian subsidiary; and, the company charter.
The charter is of particular importance since it defines just what activities a company may pursue -- i. e. which commodities it can import and export. It should therefore be broad and take into account business growth and development.
After this, a formal application must be filed at the Ministry of Finance. Most legal sources recommend that companies have at least three original copies of each document as insurance, with exact and notarized translations.
The application must also be filed with the State Committee on Foreign Investment, which lists the company on a national register.
After filing, a company must open a bank account, with at least 50 percent of the amount specified in the charter deposited within 30 days, and 100 percent within a year. The minimum charter fund is 10, 000 rubles (less than $40), although a 100, 000 ruble minimum is advisable, Mandel said.
Bank accounts can't be opened without a legal address or a company rubber stamp. Stamp designs must be approved by the militia.
After registering and setting up a bank account, a company receives a temporary license, and is finally registered after proving it has deposited 50 percent of its charter fund in its bank account.
The best advice is patience, making company registration no different in principle than most of the processes we have all come to know and love here.
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