Starting a business in Russia: foreigner's guide (2026)

Russia's registered small and medium-sized enterprises hit an all-time high of 6.835 million at the start of 2026, up 247,000 year-on-year, signalling continued formal-sector growth despite macroeconomic sanctions pressure and higher tax burdens introduced in 2025.

President Putin signed the Federal Law 'On Specifics of Regulation of Corporate Relations in Economically Significant Organizations,' allowing Russian courts to exclude foreign shareholders of strategically important Russian companies from governance and distributions. This restructured the practical feasibility of foreign-owned business formation and exit in Russia.

Following the Ukraine invasion and Western sanctions, Russia issued presidential decrees and government resolutions requiring exit transactions by 'unfriendly' jurisdiction investors to obtain government-commission approval, undergo mandatory independent valuation, sell at a minimum 50% discount to market value, and contribute 10% of deal value to the state budget — effectively locking in many foreign-founded structures and chilling new foreign business formation.

After the successful 2019 pilot, Russia made the Tax on Professional Income (NPD) available nationwide from 1 July 2020. Citizens and EAEU nationals can now formalize solo activity at a flat 4–6% tax rate via the 'My Tax' app with no mandatory registration as an individual entrepreneur — creating the lowest-barrier formal business entry in Russia's history.

Russia enacted Federal Law No. 422-FZ 'On Conducting an Experiment to Establish a Special Tax Regime — Tax on Professional Income,' creating a legally recognised pathway for individuals to operate as micro-businesses without full individual-entrepreneur registration. A 2019 four-region pilot saw over 850,000 sign up within months, confirming structural demand for a simplified entry point.

Amendments effective 29 December 2015 reduced the statutory LLC and sole-trader registration period from five to three working days. A companion 2015 law removed the mandatory corporate-seal requirement, eliminating one of the most-cited administrative nuisances for new businesses and contributing to Russia's rise in the World Bank Starting a Business sub-indicator.

From 5 May 2014, founders appearing personally at the registrar no longer needed notarized signatures; the same reform cycle eliminated the requirement to deposit charter capital before registration and the duty to notify tax authorities of new bank accounts. The World Bank credited these changes with helping Russia climb ~30 places in the Starting a Business indicator.

Putin's 'May Decrees' set a binding government target to move Russia from ~120th to 20th in the World Bank Doing Business ranking within six years, launching the most sustained deregulation programme in post-Soviet history. This mandate directly drove the 2014–2016 legislative overhaul of registration procedures, permitting requirements, and tax administration.

Russia enacted a single registration law centralising all LLC and individual-entrepreneur registration under the Federal Tax Service (FTS) and establishing the Unified State Register of Legal Entities (EGRUL). It replaced a fragmented multi-ministry system, introduced a five-day standard processing time, and created the legal infrastructure that underpins Russian business formation to this day.

Russia adopted its dedicated LLC statute (Об обществах с ограниченной ответственностью), providing the first comprehensive framework for the country's dominant business form: member rights, profit distribution, a minimum 10,000-ruble charter capital, and liability protections. Federal Law 14-FZ remains the foundational corporate law governing Russian LLCs.

Russia's post-Soviet Civil Code (Federal Law No. 51-FZ) introduced for the first time a coherent legal framework for private business entities, defining the concept of legal person, private ownership, and enforceable contracts. It laid the constitutional-level foundation upon which all subsequent business-registration and corporate laws — including the 1998 LLC Law and the 2001 Registration Law — were built.