How a Chinese Citizen Can Start a Business in Russia

Publication date/update: 09.09.2024

With the imposition of sanctions on Russian businesses and the growing closeness between Russia and China in business matters, the issue of how a Chinese citizen can register a business in Russia is becoming increasingly relevant. There are many nuances and regulations that a Chinese national must adhere to in this process. We will explore these details in our article.

The most optimal form of business for Chinese investors is a Limited Liability Company (LLC). Chinese entrepreneurs often select this structure as the most suitable for developing their enterprises. What other advantages can be highlighted?

The process of establishing a company in Russia is straightforward. Generally, a set of documents is submitted to the tax authority. Within three working days, the Federal Tax Service (FNS) will make a decision on whether to register the company or deny the registration. Denials typically occur due to procedural non-compliance, incomplete documentation, or errors in the forms.

To register a company, the following documents are required:

The compiled set of documents can be submitted to the registrar either in paper form or electronically. In the latter case, all documents must be signed with an electronic digital signature (EDS). Once the FNS approves the registration, the next step is to open a bank account.

As we noted, the process of establishing a company is similar to the registration of an LLC by a Russian citizen. However, there are some distinctions in the procedure, primarily due to the investor's remote location relative to Russia. Thus, a Chinese citizen has two options for setting up an LLC—either by traveling to Russia or without visiting the country.

This option requires obtaining a visa, except for citizens of Hong Kong and Macau, who can visit Russia for up to 30 days without a visa. The investor then personally or with the help of a lawyer collects and submits the necessary documents.

If the Chinese citizen prefers not to visit Russia, remote registration is also possible. This requires the use of intermediaries who, based on a power of attorney, will verify and prepare all necessary documents and submit them to the registration authority on behalf of the investor.

It's important to note that there are differences in the submission of documents depending on the Chinese citizen's region of origin. Residents of Hong Kong or Macau can provide an apostille and a notarized translation. However, for residents of other regions of China, consular legalization at the Russian consulate is required. The collected documents are then sent to an official representative in Russia, who will complete the registration process.

Often, Chinese nationals not only want to own a company but also to manage it. However, there are certain nuances that must be addressed. For example, a Chinese citizen can only become the head of a company after the company has been fully registered and the individual has obtained a visa, preferably a "business" visa. The necessary documents can be processed with the assistance of the employer after the registration process is completed. Until all bureaucratic formalities are resolved, only a Russian citizen or a resident of an EAEU country with legalized status (residence permit or temporary residence permit) can be appointed as the director.

For a Chinese citizen to become a director, the following steps are required:

It is important to obtain the visa and work permit because the position of general director requires the signing of an employment contract.

A foreign citizen, such as a Chinese national, can also become an individual entrepreneur (IE) in Russia. To do this, the individual must have a Temporary Residence Permit (TRP) or a Permanent Residence Permit (PRP). Registration of an IE is not possible in other cases, such as on a visa. If the requirements for legalizing residence in Russia are met, the following steps are required to open an IE:

The collected set of documents is submitted to the tax office, which reviews the documents within three days. If a positive decision is made, the tax office sends a registration certificate in the Unified State Register of Individual Entrepreneurs (USRIE) by email.

Chinese investors often seek to start businesses in Russia in sectors such as trade, construction, and agriculture. The motivation lies in the desire to fill the void left by Western producers who are actively leaving these markets. Additionally, the Russian business environment is generally favorable to Chinese entrepreneurs, offering good logistics, high demand, and the possibility of tax benefits.

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