A branch or representative office of a Latin American company in Russia

What is happening

An Argentine winery wants to attend trade fairs and meet distributors, while selling through a Russian importer. A representative office suits it, and its functions need to be described precisely in the regulations.

A Brazilian company decided to set up a branch almost a year ago, but the documents are not ready. Only weeks remain of the twelve-month filing period, and it must decide whether it can still make it or should start again with a new decision.

A Peruvian engineering firm is opening a representative office but plans to perform contracts in Russia within a year. It is worth assessing at once whether a branch or an LLC would be better, since the structure drives tax and banking.

What the law says

• Branches and representative offices of foreign legal entities are established and accredited under Article 21 of Federal Law No. 160-FZ of 9 July 1999 on Foreign Investment in the Russian Federation. The application must be filed within twelve months of the decision to establish, together with information on the number of foreign employees certified by the Chamber of Commerce and Industry of the Russian Federation.
• Accreditation takes no more than fifteen working days from filing (Article 21(3) of Law No. 160-FZ). Article 22 of the same law sets the requirements for branch and representative office regulations.
• The procedure for accreditation, changes to the register of accredited branches and representative offices and termination of accreditation is approved by FNS Order No. ED-7-14/691@ of 27 July 2021. In Moscow, accreditation is handled by Interdistrict Inspectorate No. 47 of the Federal Tax Service (FNS Order No. MMV-7-14/668@ of 22 December 2014).
• The state duty for accrediting each branch or representative office of a company from outside the Eurasian Economic Union (EAEU) is RUB 120,000 (Article 333.33 of the Tax Code).
• Unlike an LLC with foreign participation, a branch or representative office of a foreign company is a non-resident under Article 1 of Federal Law No. 173-FZ of 10 December 2003 on Currency Regulation and Currency Control.
• The Bank of Russia's risk grading on its Know Your Client platform (Articles 7.6 to 7.8 of Federal Law No. 115-FZ of 7 August 2001 on Countering the Legalisation (Laundering) of Proceeds of Crime and the Financing of Terrorism) covers legal entities incorporated under Russian law, not branches of foreign companies. The general rules on identifying the client and its beneficial owners (Article 7) apply in full.

What we do

• We help you choose between a branch and a representative office based on what the unit will do; where the task is wider, we compare both with an LLC (a separate service within this practice).
• We prepare bilingual drafts of the parent company's decision, the regulations under Article 22 of Law No. 160-FZ and the power of attorney for the head of the office.
• We prepare the information on foreign employees and have it certified by the Chamber of Commerce and Industry.
• We set a control date twelve months from the decision and build the schedule for signing, apostille, courier and translation around it.
• We arrange notarised translation and check that the parent company's name and personal names are spelled consistently across all documents.
• We file the package, monitor the accreditation deadline and obtain confirmation of the register entry.
• After accreditation we register changes (head of office, address, regulations) and, if needed, handle termination of accreditation.

What we will need from you

• The parent company's commercial register extract and constitutional documents.
• A description of the unit's functions: what it will do and whether it will earn revenue.
• Details of the future head and the number of foreign employees the company intends to send to Russia.
• The intended address in Russia or your requirements for premises.
• Who within the company is authorised to decide on the establishment and sign the power of attorney.