Russia - Market Entry and Legal Services

Lawyer & Law Firm in Russia

Russia, ranked at 31st place by the World Bank Group’s Doing Business-2019 rating, has large consumer market and wide range of business opportunities and over past few years, the Russian government has taken various steps to make it much more straightforward for international investors to establish their business in Russia. Abundant natural resources and highly skilled workforce are other two important reasons beside huge market that attracts entrepreneurs to operate in the Russian economy. In the recent years, India and Russia have seen a significant increase in trade turnover. In 2021, Indo-Russian trade reached US$ 13.5 billion which was almost 50% higher than in the 2020. With the ambitious target set by both countries to achieve trade volume equal to US$ 30 billion by 2025, the governments are implementing various joint projects especially in energy, oil, defence, pharmaceuticals, food, and the chemicals industry.

COMMERCIAL RELATIONS BETWEEN INDIA-RUSSIA

• Russia is positioned 27th in contributing FDI in India with cumulative FDI of around US$ 1.276 billion between April 2000 to September 2003.
• Surpassing the set targets, bilateral trade between Russia & India exceeded US$ 45 billion between April 2022 and March 2023. India exported amounting to US$ 3.14 billion to Russia with imports reaching US$ 46.2 billion.
• The INSTC that spans 7,200 KM integrates road, rail and maritime routes, linking India and Russia through Central Asia and Iran providing support to trade and transportation between the Indian Ocean and the Caspian Sea, extending into Russia and Northern Europe via the Persian Gulf.
• The Indo-Russian Forum for Trade & Investment and the India-Russia CEO’s Council serve as vital platforms for direct business-to-business interactions. India aims to strengthen trade relationship with Russia and CIS countries, especially in the light of the emerging Eurasian Economic Union.

BUSINESS ADVANTAGE FOR INDIAN COMPANIES IN RUSSIA

Indian companies operating in Russia enjoy several business advantages. Firstly, Russia's vast market offers immense opportunities for Indian businesses across various sectors. The country's diverse economy, rich in natural resources, presents lucrative prospects for Indian companies involved in sectors such as energy, manufacturing, technology, and pharmaceuticals. Secondly, India and Russia share historical ties and a strong diplomatic relationship, which fosters cooperation and collaboration between businesses of both countries. This relationship often translates into favourable trade policies, investment incentives, and regulatory frameworks, facilitating smoother market entry and operations for Indian companies. Moreover, Russia's strategic location serves as a gateway to the Eurasian market, providing Indian companies with access to not only Russia but also neighbouring countries in Central Asia and Eastern Europe. This geographic advantage opens up additional avenues for trade, investment, and business expansion. Additionally, cultural similarities between India and Russia contribute to better business relations, communication, and understanding, thereby enhancing the overall business environment for Indian companies operating in Russia. Furthermore, Russia's ongoing efforts to diversify its economy and promote innovation present opportunities for Indian companies to collaborate on joint ventures, technology transfer, and research and development initiatives. Overall, the combination of a large market, strong bilateral relations, strategic location, cultural affinity, and evolving business landscape makes Russia an attractive destination for Indian companies seeking to expand their global footprint.

INCENTIVES AND SUPPORT PROGRAMS BY RUSSIA FOR INDIAN COMPANIES

Russia offers various incentives and support programs to attract Indian companies and promote economic cooperation between the two nations. These initiatives aim to facilitate market entry, encourage investment, and foster business growth. Some of the key incentives and support programs provided by Russia for Indian companies include:

• Special Economic Zones (SEZs): Russia has established SEZs in different regions across the country, offering tax incentives, customs benefits, and streamlined administrative procedures to companies operating within these zones.
• Investment Promotion Agencies: Russia has dedicated investment promotion agencies, such as the Russian Direct Investment Fund (RDIF) and the Russian Export Centre (REC), which provide assistance and support to foreign investors, including Indian companies.
• Bilateral Investment Treaties (BITs): Russia has signed BITs India that provide a legal framework for investors to safeguard their investments, resolve disputes, and access dispute resolution mechanisms. Indian companies investing in Russia can benefit from the protections offered under these treaties.
• Technology Transfer and Collaboration Programs: Russia encourages technology transfer and collaboration with foreign companies, including Indian firms, through joint ventures, research partnerships, and technology licensing agreements.
• Export Promotion Initiatives: Russia actively promotes exports through initiatives such as trade fairs, exhibitions, and trade missions, providing Indian companies with opportunities to showcase their products and services, network with potential buyers, and explore new markets. The Russian government also offers financial assistance, export credits, and insurance schemes to support exporters.
• Support for Small and Medium Enterprises (SMEs): Indian SMEs looking to enter the Russian market can benefit from various support programs and incentives provided by Russia specifically targeted at SMEs, including access to financing, training, technology adoption, and export promotion services.

STARTING A BUSINESS IN RUSSIA

• Submit the required paperwork to the registration office of the Federal Tax Service (FTS) including:
  • Registration application with notarized signatures
  • Copies of foundation documents
  • Proof of legal status of business founder
  • State registration fees
• Upon approval, you will receive Incorporation Certificate, Tax Certificate & Tax Identification Number for your business and Extract from Common State Register of Legal Entities.
• Consider obtaining Company seal although not a mandatory legal requirement.
• Open a local business bank account using FTS documents.

The entire process typically takes around 18-21 days to complete.

VISA AND IMMIGRATION

To engage in business activities in Russia, foreign nationals typically require a business visa. The specific type of visa needed depends on the purpose and duration of the visit. Here are the common types of visas required for conducting business in Russia:

• Business Visa (Single Entry or Multiple Entry)
• Work Visa
• Investor Visa
• Commercial Representative Visa

To conclude, its pertinent to have a thorough understanding of the cultural, regulatory, and business landscape of Russia prior to entering the market. There are significant business opportunities in sectors such as automotive, aerospace, hydrocarbons, power generation, coal, nuclear energy, fertilizers, information technology, pharmaceuticals, minerals, and metallurgy among others but Indian businesses will also have to navigate strong competition and regulatory compliances.

To read more about the Russia market and various business opportunities – CLICK HERE

HOW DO WE HELP?

At India Law Offices (ILO), we are committed to provide outstanding legal support in India and globally. Over the last two decades, we have worked extensively in expanding our reach by forging robust partnerships, both formal and informal, with reputed professionals from premier law firms in major commercial centres around the world. These partnerships enable us to provide efficient and seamless representation of the highest caliber in any jurisdiction. Furthermore, with our wide international network, we are able to address the varied requirements of our clients, ensuring they receive exceptional legal services across borders.

With the extensive global affiliations with prominent law firms and international legal networks, India Law Offices makes business possible for its clients worldwide. We provide comprehensive support to Russian companies that are interested in entering the Indian market, covering setting up of subsidiaries or branches, negotiating commercial contracts, and compliance with legal regulations. On the other hand, we offer tailored legal and corporate support to Indian businesses looking to expand into Russia and CIS region. Through collaboration with our Russian partners, we provide advice on cross-border transactions between India and Russia that include Mergers and Acquisitions (M&A), Joint Ventures, and other related alliances. We are committed in assisting our clients in successfully navigating the complexities involved in Indo-Russian business collaborations. Our expertise spans across various segments, ensuring comprehensive legal support in wide range of areas such as:

• Corporate and M&A – Incorporation of Company, Branch Office, Merger & Acquisitions, Joint venture, Technical Collaboration, Taxation, Financial Reporting
• Commercial Contracts – Drafting & vetting of contracts like franchising, distribution, sales and marketing, licensing etc.
• Business and Civil Litigation – Representation before courts and judiciary bodies, Arbitration, Mediation
• Immigration – Obtaining Visa, Citizenship, Visa extension, Work Permit etc.
• Labour & Employment – Advice on Employment Laws, Tax implication on French nationals working in India, Drafting Employment Contracts & HR Policy
• Real Estate – Buying & Selling of Property, Development of real estate projects.
• Intellectual Property Rights – Trademark, Copyright & Patents registration
• Family Law and Inheritance – Cross border Divorce, Marriage Registration, Child Custody, Adoption, Drafting Will, Setting up Trust or Estate

OUR PARTNER IN RUSSIA

India Law Offices and BMS Law Firm, have formed a collaborative partnership to foster legal support between India and Russia. This partnership is built on their mutual membership in PraeLegal, an international network that comprises of independent business and commercial law firms from around the world. Both firms leverage this association to provide effective legal services to their clients on the legal matters that arise between the two countries. Founded in 2006, BMS Law Firm has office in Moscow and offers expertise in areas of Litigation and Arbitration, Foreign Trade and Custom Laws, Taxation, Bankruptcy and Restructuring and Business law.  

If you are a Russian company or individual seeking assaistance in India or an Indian entrepreneur planning to enter the Russian market, we encourage you to complete the form below and connect with our team of legal experts. We are dedicated to providing the best guidance and support you require.