Entering a new market every company faces many obstacles.

Depending on the goals a foreign company may chose to found an affiliate in Russia or to open a representative office. Each form has its own advantages and drawbacks.

Affiliate or a daughter-company can be founded in the form of a legal entity. This implies that such a legal entity shall be entitled to carry out commercial activities.

The representative office, on the contrary, does not vest you with such a right but it has a significantly more simple accounting responsibilities.

Whereas promotion of a legal entity is a more simple procedure in comparison with the opening of a representative office the latter will save much time and money for accounting and tax reporting.

Usually, prior to entering the market the company need to make necessary market studies and to prepare business relations for the promotion of an affiliate company.
For such goals it is more convenient and easy to found a representative office. At the same time you will be not obliged to deal with many tax accounting procedures due to the non-commercial nature of the representative office.

The goals of a representative office can be as follows:

- constant monitoring of the market and thus a possibility of the timely response to the changes at the market;
- a closer business contact with partners and clients in Russia;
- more possibilities of promotion of the products and services at the market;
- possibilities of a constant (and not every once in a while) advertising activities, e.g. participation in exhibitions etc.

Opening a representative office is a long and complicated procedure consisting of the stages listed below:

• Accreditation
• Entry into the state register
• Registration by tax authorities
• Fabrication of a seal
• Obtaining of statistics codes
• Opening of accounts
• Registration by funds (retirement, medical and social fund)

In general this procedure takes from 2,5 to 4 months.

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