Set up a Financial Company in Russia

Even if in recent years there have been significant organizational changes, Russia offers diverse openings for investors who want to open financial companies in the country. With respect regarding the provisions of the Banking Law and the Civil Code in Russia, foreigners are invited to establish their companies in the Russian financial sector. They can benefit from comprehensive and reliable support offered by our specialists in opening a company in Russia.

Types of financial companies you can open in Russia

The banking sector represents the most important financial source for the majority of Russian companies in the country. The Bank of Russia (Central Bank of the Russian Federation) oversees the activities of the financial field. It is good to know that there are also other financial institutions which can serve to natural persons and also corporations. Among these, the following entities can be successfully established in Russia:

• investment banks;

• brokerage companies;

• credit companies;

• insurance institutions;

• credit unions;

• retail banks;

• loan associations;

• mortgage firms;

A financial business in Russia may operate as a joint stock company or an LLC, depending on the licence, with sector-specific capital rules; joint stock companies which can be registered with a minimum share capital of RUB 100,000 (public) or RUB 10,000 (non-public). Our company formation agents in Russia can offer guidelines and help throughout the entire registration process of a financial company in the country.

Obtain the license for your financial firm in Russia

Just like in most industries, the financial sector also requires special licenses and permits to establish the activities as a foreign entrepreneur in this important domain. The Bank of Russia is the entity that issues the licenses for companies offering investment funds to both individuals or several types of enterprises, in compliance with the Federal Law. As for insurance companies or branches of foreign banks, the license to operate in Russia is issued by the Bank of Russia.

Banks and non-bank financial institutions in Russia offer services to clients based on financial licenses issued by the Bank of Russia. In the Russian Federation, there are two categories of banking licenses:

• the universal license: issued to banks with equity surpassing 1 billion rubles;
• the basic license: for banks with equity between 300 million and 1 billion rubles.

While the basic license enables simplified regulation, it also comes with certain restrictions. Two-thirds of banks in Russia possess universal licenses, representing 95% of the total banking assets in this country, while the remaining percent of the banks operate under the possession of basic licenses.

Requirements for opening a financial institution in Russia

Besides the above-mentioned rules linked to how a company can be incorporated in Russia, one should know that for creating a financial business, a minimum share capital is imposed. For example, minimum RUB 90 million is necessary for establishing a non-banking institution and minimum RUB 1 billion for a bank with a universal licence or RUB 300 million for a bank with a basic licence. Having a consistent and trustworthy financial environment, and varied incentives and policies to encourage the foreign investments, Russia remains accessible for financial businesses, but EU/US/UK sanctions cover much of the sector and transactions with persons from 'unfriendly' states require special approvals.

When attracting funds from clients, financial institutions in Russia assume responsibilities toward creditors and depositors, leading to various regulatory requirements, including mandated financial ratios. The Bank of Russia conducts ongoing supervision of financial companies in Russia to ensure compliance with legal standards and may remove banks from the market if their operations pose risks to creditors and depositors.

In Russia, there is a deposit insurance system created by the authorities to offer protection of the interests of depositors, consumers, individual entrepreneurs, and small businesses. Most banks are taking part in this arrangement, which leads to a maximum insurance coverage of 1.4 million rubles.

If you are planning to open a company in Russia and need support to follow the requirements imposed by the Russian authorities, our company formation lawyers in Russia are at your disposal. Furthermore, if you need assistance regarding tax regulations and other financial requirements for your company formation in Russia, you can rely on our specialized accountants in Russia.

Necessary documentation to open a financial company in Russia

Foreign investors wishing to open a financial company in Russia must submit the following documents to the Federal Tax Service (credit institutions are registered on the decision of the Bank of Russia):

• Original and copies of their ID or passport (with or without a Russian visa);
• The Memorandum and Articles of Association for the new established company in Russia;
• The decision appointing the company’s director, along with his/her personal details;
• Documentation of the Russian company’s legal address (either a lease agreement or property title);
• For ordinary companies, no proof of capital payment is needed at registration (an LLC pays its capital within four months after registration); for banks, proof that the share capital is present in a  Russian bank account;
• The power of attorney, if a representative is designated to handle the registration process.

Find assistance from our specialized company formation agents in Russia in order to prepare the documentation for your business.

Statistics on the financial sector of Russia

Official data shows that the financial sector in Russia is various, but generally dominated by the banking sector:

• At the end of 2020, 87% of the entire Russian financial sector was occupied by the banking field;
• In the same year, 5% of the financial sector was represented by the investment funds in Russia.
• Another 5% – by the insurance sector.

For complete information in this matter, please feel free to contact our company formation representatives in Russia.