There are four ways a foreign individual can do business in Russia — self-employed, sole-trader IP, LLC or as an agent — and they're taxed very differently. The right one depends on what you'll actually do and earn.
Self-employed (NPD, 4–6%) or a sole-trader IP on a simplified regime keeps tax low and admin light — but check you have the right-to-work status to use them.
An LLC gives you a proper company, limited liability and the ability to employ — more setup and reporting, but the structure that scales and repatriates.
Four structures available to foreign individuals
LLC (ООО): the standard business entity
Individual entrepreneur (ИП): personal business registration
Self-employed (самозанятый): the simplest option
Agent or distributor arrangement: operating through a Russian partner
A foreign individual who wants to operate commercially in Russia has four main structural options, each with different tax treatment, registration requirements and practical implications:
LLC (ООО) — a separate legal entity, the most common structure
Individual entrepreneur (ИП / IP) — registered personal business activity
Self-employed (самозанятый / samozanyaty) — simplified regime for service providers
Agent or distributor arrangement — operating through a Russian counterparty
Each option is available to foreign nationals under certain conditions. The right choice depends on the nature of the activity, the expected revenue, the need to hire employees and the individual's tax residency status.
4–6%, minimal admin — for a small operation, if your status allows it.
6% simplified — for a larger or growing solo operation, more obligations than NPD.
A full company: limited liability, can hire, repatriates at treaty rates — more setup and reporting.
Sell through a Russian agent — but watch the permanent-establishment line.
An LLC (Общество с ограниченной ответственностью) is the most widely used structure for foreign-owned businesses in Russia. As a separate legal entity, it provides liability protection and allows for multiple owners.
A foreign individual can be the sole owner and director of a Russian LLC. Key points:
Registration takes 3–5 working days with the Federal Tax Service (FTS)
Pick what sounds like you — we'll tell you the best fit:
Minimum charter capital: RUB 10,000 (~$110) — in practice, most companies register with RUB 10,000
The LLC pays corporate income tax at 25% (from 2025) and VAT at 22% (from 2026)
Profit extraction: dividends paid to a foreign individual are subject to withholding tax — 15% under the domestic rate, or a lower DTT rate if applicable
The foreign director can be employed under an HQS work permit, reducing their personal income tax to 13%
Tax on dividends received by the individual: When the individual receives dividends from their LLC, this is personal income for НДФЛ purposes. Tax residents pay 13–22% on dividends depending on the amount; non-residents pay 15%. If the individual also lives in another country, applicable DTT provisions may allow relief.
Self-employed (NPD) and sole-trader IP registration depend on your immigration status. Registering the wrong vehicle for your status creates problems later — confirm eligibility before choosing on tax alone.
Self-employed (NPD): 4–6%. Sole-trader IP (simplified): 6%. LLC: 25% CIT, but limited liability and the ability to hire and repatriate.
A foreign individual who is a Russian tax resident can register as an individual entrepreneur (индивидуальный предприниматель — IP). This is not a separate legal entity — the individual conducts business under their own name and is personally liable for all business debts.
Who can register as IP: Foreign nationals with legal basis to stay in Russia — typically a work permit, HQS permit, residence permit (ВНЖ) or temporary residence permit (РВП). Tourists and short-stay visitors cannot register as IP.
The simplified system (УСН) at 6% is the most popular choice for foreign service providers and consultants. Revenue threshold for УСН: RUB 450 million per year (from 2025). Social contributions (фиксированные взносы) are mandatory: approximately RUB 50,000 per year fixed, plus 1% on revenue above RUB 300,000.
The self-employed regime (налог на профессиональный доход — НПД) is available to foreign nationals who are citizens of EAEU countries (Belarus, Kazakhstan, Armenia, Kyrgyzstan) or who hold a residence permit (ВНЖ) in Russia.
If you qualify, this is the simplest and cheapest way to operate commercially:
Tax rate: 4% on income from individuals, 6% on income from businesses
No social contributions required
Registration via the "Мой налог" (My Tax) mobile app — no paperwork
Revenue ceiling: RUB 2.4 million per year (~$26,000). Above this, the regime must be abandoned
For a small operation, self-employment (NPD) at 4–6% or a sole-trader IP on the simplified 6% regime is usually cheapest and simplest. But both depend on having the right-to-work status in Russia to register — that's the first thing to confirm, before choosing on tax alone.
If you're billing a client or two and won't hire, an individual status (self-employed or IP) is often enough. If you expect real revenue, want limited liability, or plan to employ people, an LLC is the structure that fits — and it registers in 3–5 days. The choice turns on scale and hiring, not just tax.
Not automatically — access depends on your immigration and right-to-work status in Russia. Some statuses allow it, others don't, and registering the wrong vehicle for your status creates problems later. It's worth checking your eligibility before you register.
This compares the four structures. The real question is which one fits you — because an LLC, a sole-trader IP on 6%, self-employed on 4%, or an agent arrangement lead to very different tax bills and obligations for the same activity.
Practical support for international business in Russia.