Business Structures in Russia: IP, OOO & AO

Legal form, tax regime and permission to work are separate choices. Compare the main options before choosing a registration route.

By Igor Fedorov, Moscow Welcome project editor · Sources checked 20 October 2026

Compare the main options

Structure or regime	What it means	When to investigate it
IP · ИП	An individual registered as an entrepreneur, without a separate company.	A business carried on by one person who meets the registration requirements.
OOO · ООО	A limited liability company with membership interests held by its participants.	One or more owners, a separate company and organised management.
AO / PAO · АО / ПАО	A joint-stock company; public and non-public arrangements have different rules.	Projects requiring a share-based ownership structure and more extensive corporate administration.
Branch / representative office	A presence of an existing foreign company, with a separate establishment or accreditation process.	An overseas business evaluating its own Russian presence.
NPD · НПД	Professional income tax: a special tax regime, not another type of company.	Eligible independent activity that satisfies nationality and other statutory restrictions.

This is a planning comparison. A structure’s availability and obligations depend on the proposed activity and participants. A foreign company’s branch or representative office should be assessed as its own project, rather than treated as an ordinary OOO application.

IP or OOO: the practical difference

An IP operates in their own name. An OOO is a separate legal entity. That changes how ownership, decisions, contracts and business funds are organised. An IP is not a company with shares that can simply be divided between partners.

The IP model involves personal responsibility for business obligations within the applicable law. Limited liability in an OOO does not eliminate all possible personal liability for directors, guarantees or particular conduct. Discuss the expected contracts and risks with a lawyer rather than choosing solely by the apparent filing cost.

A sole consultant and a business with several founders may need different arrangements even when they sell similar services. If partners will invest, agree decision-making, profit distribution and how a participant can leave before registering.

What changes for foreign citizens?

IP registration requires evidence of a qualifying temporary or permanent right of residence. A visitor’s migration card is not a substitute. The IP guide sets out the document checks and filing sequence.

For an OOO, assess the person who owns the interest separately from the person who manages or works for the company. Becoming an owner does not automatically authorise employment in Russia. The OOO guide explains the preparation needed for individual and corporate foreign founders.

Why NPD is not a universal freelance option

The term samozanyaty commonly refers to a person using NPD. It is a tax status, not an LLC. The FNS describes access for Russian citizens and eligible foreign nationalities, including Belarus, Armenia, Kazakhstan, Kyrgyzstan and Ukraine; other conditions also apply. An English-speaking or foreign resident cannot assume eligibility merely because the app is available.

The regime has a RUB 2.4 million annual eligible-income limit and does not allow employees under employment contracts for that activity. Its basic rates are 4% for relevant income from individuals and 6% from companies or IP customers. Check the full activity restrictions and current eligibility on the official FNS NPD portal.

Choose the tax regime separately

OOO and IP are not tax rates. Availability of USN or another regime depends on its conditions, and USN can involve VAT. Compare forecast revenue, recognised expenses, customers and staff with an accountant using the business tax guide.

Will there be one owner or several?
Can the intended activity use this structure?
What residence and work position does each person have?
Who will sign contracts and keep the accounts?
How much ongoing administration can the project support?

Questions, answered

Is an OOO the same as a foreign LLC?

It is a Russian limited liability company, but Russian law governs its documents, management and obligations. A familiar foreign label does not mean that your home-country rules apply.

Can I use NPD as an alternative to any business registration?

No. NPD has nationality, activity, annual-income and staffing restrictions. Check eligibility before accepting payments under that regime.

Does an IP always pay 6%?

No. IP is a registration status. The applicable tax regime and individual taxes must be assessed separately.