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When registering a Limited Liability Company (LLC or Общество с ограниченной ответственностью, ООО in Russian), it is essential to decide who will hold the position of the CEO. The CEO acts on behalf of the company, entering into transactions, signing contracts, and exercising other powers transferred from the founder. Therefore, it is crucial to choose a trusted individual who can accurately account for the risks of business activity.
Let's examine who can become the CEO and whether a foreign citizen can hold this position in Russia.
Who can become the CEO of a Limited Liability Company in Russia?
The founder of the company or the general meeting of founders appoints the sole executive body, also known as the CEO. The term of office of the CEO is determined by the founder in the company's charter and cannot exceed 5 years. Information about the CEO is entered into the unified state register of legal entities (ЕГРЮЛ in Russian) when registering a company.
The CEO of an LLC can be:
- One of the participants of the LLC or its sole participant;
- An individual not a member of an LLC, a citizen of the Russia;
- An individual not a member of an LLC, a foreign citizen.
The easiest way to appoint the CEO is to select him from among the company's participants or, if the company has one participant, to appoint that individual. This ensures the founder chooses a trusted person aimed at business growth, as the founder will benefit materially. However, the question arises whether all founders can really become the CEO since a foreign citizen can also be a founder of an LLC.
FYI: how a foreign citizen can register a company in Russia can be found in our article.
The CEO – a citizen of Russia.
Requirements for the CEO – a citizen of Russia:
- full legal capacity and at least 18 years old;
- no criminal record for crimes against state power, interests of public service or local government service;
- no disqualification by a court or administrative body from holding leadership positions;
- conclusion of an employment contract in accordance with Russian law.
FYI: a Russian citizen who was a founder owned at least 50% of the share in the authorized capital or the CEO in another company that was forcibly liquidated and had a debt to the budget cannot become the CEO for 3 years from the moment the company is excluded from the register of legal entities.
A citizen of Russia does not need any additional documents, such as a work permit, to become the CEO. For quick LLC registration, appointing a Russian CEO is the simplest solution. However, this person must be trusted since they will have access to the company’s funds and assets, enter into transactions, and significantly influence the company’s activities.
The CEO – a foreign citizen.
Different requirements for the CEO – a foreign citizen:
- Temporary residence permit. A person with a temporary residence permit does not need a work permit or patent to be the CEO but can only work in the constituent entity of the Russian Federation where he is permitted temporary residence.
- Residence permit. A person with a residence permit does not need a work permit or patent to be the CEO.
- Patent. A patent is required for citizens from countries with visa-free agreements with Russia (e.g., Azerbaijan, Moldova, Tajikistan, Uzbekistan and Ukraine).
- Work permit. A work permit is required for citizens of visa countries. They must obtain a work visa in their home country, then receive an invitation from the registered company to work, and finally get the work permit.
- A highly qualified specialist status.
FYI: citizens of Belarus, Kazakhstan, Armenia and Kyrgyzstan are equal in labor status to citizens of the Russia; they do not need to provide additional documents and registration for work is carried out in the usual manner. These citizens also do not require any additional documents order to become the CEO, just like for a citizen of the Russia.
Thus:
- if a person has a temporary residence permit or residence permit, a foreign citizen can immediately become the CEO upon registering a company;
- if a person is a citizen of one of the countries: Azerbaijan, Moldova, Tajikistan, Uzbekistan, Ukraine, then he must first obtain a patent before registering a company, after which he can also be the CEO;
- if a person is from a visa country, then he needs to obtain a work visa, then an invitation to work and then a work permit.
A highly qualified foreign specialist (HFS or ВКС in Russian) and how to obtain this status.
An HFS is a foreign citizen with work experience, skills, or achievements in a specific field, requiring a certain salary level to work in Russia. A work permit for HFS is issued for up to 3 years (renewable).
Salary requirements:
- No requirements for foreigners involved in the Skolkovo project;
- At least 83 500 rubles. per month:
- foreign researchers or teachers invited by universities, state academies for research or teaching activities in state-accredited programs;
- foreigners attracted to work by residents of industrial-production, tourist-recreational, port special economic zones;
- foreigners attracted by state accredited organizations operating in the field of information technology;
- foreigners involved in labor activities by legal entities operating in the territories of the Republic of Crimea and the federal city of Sevastopol.
- At least 58 500 rubles. per month for foreigners attracted to work by residents of the technology-innovation special economic zone.
- At least 250 000 rubles. per month for all other foreigners.
To become a HFS:
- Apply for an account card at the Main Department of Migration Affairs of the Ministry of Internal Affairs as the inviting party;
- Submit documents for a work permit. At the same time the following is issued: work invitation – for visa HQS; labor contract; notification of the conclusion of a labor contract;
- Based on the invitation obtain a work visa at the Consulate (a person receives it in his homeland, or in the specified country, to enter the Russia);
- After entering Russia undergo a medical examination within 30 days from the date of entry;
- With the results of the medical commission, fingerprint registration and photography are carried out;
- Obtain the work permit from the Ministry of Internal Affairs.
Thus, obtaining HFS status and a work permit allows a foreign citizen to become the CEO of an LLC.
