During the last 5 years Cyprus construction companies are widely used in building business in Russia. A lot of foreign construction firms register their branches in Cyprus or establish new companies and perform through them building activity in Russia. There are more than thousand Cyprus companies that got licenses for building activity in different regions of Russian Federation (R.F.). There’s a contract between Cyprus and R.F. about avoidance of double taxation. That is the main reason why construction companies’ register in Cyprus.
According to the contract Cyprus company working in R.F. during 12 months is free from income tax. It doesn’t mean that Cyprus company can’t work in Russia more than 12 month it is possible to arrange the building activity in periods, not overcoming 12 months each and to have separate contract for each period.
As a rule, many construction companies carry out not only building works, but also projects, project-constructive and investigating works, engineering, projects or works, examining of samples, tools and equipment, etc. Income from these kinds of work is also free from income tax in R.F.
Cyprus company must have a special certificate from Cyprus tax inspection. This document excludes a company from income tax paying. According to it, the profit, received by Cyprus company from sources situated in R.F., is taxed in Cyprus.
According to Russian legislation, only companies, which have got license from the appropriate Ministry of R.F., have the right to carry out building work. So, only registration of Cyprus construction company isn’t enough for building activity in Russia. The next step is a representation office of Cyprus company in R.F. and an application for getting the Federal License. For getting the License, the following documents must be attached to it:
1.Charter and an extract from the Register of the country the firm is registered in, certified by Russian Embassy in the country of registration or by putting an Apostille................{Annex No 2,3)
2.General application about the enterprise.........(Annex No 4)
3.Organizational structure of the enterprise.......{Annex No 5)
4.Financial standing of the enterprise................(Annex No 6)
5.State Administration personnel qualification....(Annex No 7)
6.Condition of material and technical base........(Annex No 8)
7.Information on the availability of the intra production system of quality control in design and engineering surveying, civil engineering and erection works, production of building materials, products and structures.......(Annex No 9)
8.High-quality level of carried out works, products and services, determined according to the testimonials of the largest clients (consumers of products)……………(Annex No 10)
9.Notification of the clients.....................(Annex No 11)
10.Creating of special accredited expert basic centers for carrying out special types of work, according to the list (at the request of the Federal Licensing Center of the appropriate Ministry of Russia)……………(Annex No 12)
11.Booklets, leaflets, schemes and other visual materials confirming the opportunities of the enterprise to be engaged in construction activities and characterizing the quality of the works (-----items).
Registration of representation office and getting the appropriate license from Ministry usually takes 3-5 months. There must be an individual scheme worked out for every company. A scheme depends on the kind of construction work, the company will carry out, as well as on the client and the place the object is situated at.