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Foreign Legal Entities will be Allowed to Participate Without any Limitation in the Authorized Capital of SME in Russia
August 9, 2018 00:14


Foreign legal entities will be able to participate without any limitation in the authorized capital of small and medium-sized businesses in Russia. On Wednesday the corresponding draft law was adopted by the State Duma in the third and final reading. To find details check the law or consult our Russian attorneys for comprehensive clarifications. 

Previously, legislation prohibited  enterprises with the share of foreign legal entities exceeding 49% to register as SME. Now such companies will be able to maintain their "small" status, but only if the foreign company that has invested in it also belongs to the SME sector and is not offshore. Introduction of this regulation will require identification of foreign company as a representative of small or medium-sized businesses: a new law provides for the confirmation of compliance of the company with established criteria based on the conclusion of the audit organization.

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We would like to remind that in Russia, the SME sector includes enterprises where the income for the calendar year does not exceed 2 billion rubles, and the number of employees does not exceed 250 people. Currently, more than 381 thousand companies in Russia work without hiring any employees, this statistics prepared by the Federal Tax Service (FTS) became available on August 1. This is 15.3% of all companies, as disclosed by the service.

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The Tax Service does not include the number of employees working under the job contract, and part-time employees. Most of all companies in Russia employ only one employee - that is 41.5%; 13.7% of the companies employ from three to five employees, and in 10% of companies there are two employees. More than five employees work in less than 20% of companies. The largest companies in the list of the Federal Tax Service were Balashikha  Express (LLC), and   Gorillasmart (LLC), registered in the village of Kachelino in Tatarstan. According to this service, the first one employs 697.5 thousand employees, and the second - 638.9 thousand employees. However, the representative of Express, commenting on this information, said that the list contained a mistake and he worked alone in the company. General Director of Gorillasmart also pointed out the mistake and said that the company did not conduct any activities.


Author: Anna Dorozhkina

Tags: Russian business Russian law Legal Services in Russia   

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