How much does it cost to start a business

And is it even worth starting one? The issues of international pressure and global economic instability are particularly pressing at the moment. However, the market is evolving, becoming more adaptive and dynamic. This year, the government launched a series of large-scale transformations: new tax benefits were introduced, grant support programs were expanded, access to financing was simplified, and the system for assisting small and medium businesses was updated with the introduction of the MSP+ format. So, what does the process of starting a business in Russia look like now, and how much does it cost?

Individual Entrepreneur (IE) or Limited Liability Company (LLC)

More than 95% of new businesses in Russia are registered as either an Individual Entrepreneur (IE) or a Limited Liability Company (LLC), with the latter traditionally accounting for the vast majority of registered companies.

An Individual Entrepreneur (IE) is a physical person officially registered to engage in commercial activities without creating a legal entity. This form is suitable for small and micro-businesses: it is simple to set up, does not require significant ongoing expenses, and allows for simplified taxation. The main drawback is that the entrepreneur is personally liable for business obligations with all their property.

A Limited Liability Company (LLC) is a fully-fledged legal entity established by one or more participants, with share capital divided into portions. This form provides more opportunities for attracting investment and sharing corporate control. It significantly reduces the personal risks of founders by limiting them to the funds invested. At the same time, LLCs require more complex legal and accounting structures and strict adherence to corporate procedures.

In practice, the choice between IE and LLC usually comes down to three questions:

• what level of personal liability the founder is ready to accept;
• whether outside investors or partners are expected;
• what scale of operations and turnover is planned in the medium term.

In addition to IE and LLC, other forms of business registration are available in Russia. Micro-entrepreneurs can opt for the self-employed status, which offers a very simple taxation and reporting system. For more complex corporate structures, non-public joint-stock companies are used, allowing for flexible management of shareholder rights and ownership structure. Public joint-stock companies are focused on large projects and access to capital markets. There are also less common forms — production cooperatives, full and limited partnerships, and economic partnerships — typically used in specific industries or for narrowly focused projects.

Key expenses for opening an IE

Starting an individual entrepreneurship in Russia involves moderate costs, many of which depend on the chosen registration method and organizational decisions. The main expense items look as follows:

• Registration and state duty. The standard fee for registering an IE is 800 rubles, but if documents are submitted electronically through the Federal Tax Service website, “Gosuslugi”, other online platforms, a notary or an MFC, the state duty is waived. Notary services for certifying documents usually cost 1,000–1,500 rubles depending on the region and tariff.
• Insurance and pension contributions. Starting in 2025, fixed insurance payments for individual entrepreneurs have been increased by 8.4%. The total annual contribution for mandatory pension and medical insurance is now 53,658 rubles. If annual income exceeds 300,000 rubles, an additional payment of 1% on the exceeding amount is required, subject to a statutory cap. These contributions are mandatory regardless of actual business activity — even if the entrepreneur has no income in a particular year.
• Bank account, cash register and digital infrastructure. Legally, an IE is not required to have a business account, but in practice, having one significantly simplifies operations: it automates payments, eases transactions with counterparties, and ensures greater transparency with tax authorities. The average cost of monthly account servicing ranges from 500 to 700 rubles, depending on the bank and tariff plan. According to 2024 digital banking rankings, banks such as Alfa-Bank, VTB and Gazprombank are among the leaders in online service quality, but conditions should always be checked on the banks’ official websites. The obligation to use cash register equipment depends on the type of activity and form of payment: for most operations with cash or electronic payments from individuals an online cash register is mandatory, with certain exceptions (for example, some activities under the patent or professional income tax regimes). Basic cash register models start from about 7,000 rubles; more advanced devices with online integration and automation can cost 30,000 rubles or more, plus setup and maintenance.
• Electronic digital signature (EDS) and optional extras. An EDS is a legally valid equivalent of a traditional signature used to confirm the authenticity of electronic documents. With an EDS, entrepreneurs can register as IE via the FNS website, submit reports online, and sign contracts electronically. The EDS itself can be obtained free of charge from accredited certification centers or trusted representatives of the Federal Tax Service (including some banks), but a physical token typically costs 1,200–2,000 rubles. The signature is issued for one year and must be renewed. Additional optional costs include a stamp (from about 1,000 rubles) and, in many cases, a patent or license for regulated activities. Under the patent tax system, the cost of the patent is tied to the potential (not actual) income determined by regional authorities for a specific activity; the rate is 6% of this potential income. Licenses for activities subject to state control (education, medicine, security, alcohol trade and others) usually start at 7,500 rubles, but the total cost may be higher, taking into account state duties and the services of specialists preparing the documents.

If an IE is registered electronically, without cash register equipment, patents, licenses or stamp, the minimum cash outlay at the start is around 3,300 rubles, including the bank account and the EDS token.

Tax regimes for Individual Entrepreneurs

The taxation system for individual entrepreneurs in Russia depends directly on the chosen regime. Significant changes to tax rates and business conditions came into effect in 2025, which should be reflected in any financial model. The main regimes can be summarized as follows:

• Simplified Taxation System (STS). Designed for entrepreneurs with annual income of up to 450 million rubles. There are two options: “Income” at 6% of revenue, which is convenient when expenses are low, and “Income minus expenses” at 15%, which is more beneficial for businesses with significant documented costs. In addition to the STS tax itself, the entrepreneur pays fixed insurance contributions for themselves and, if there are employees, insurance contributions of roughly 15–30% of their salaries depending on the applicable rates.
• General Taxation System (GTS). Typically used when an IE works with VAT, large contracts or export operations. Under GTS, the entrepreneur pays personal income tax (PIT) at progressive rates (from 13% to 22% depending on income brackets), value added tax (standard rate 20%, reduced 10% for certain socially significant goods), and property taxes on vehicles, land plots and commercial real estate used in business. This regime is the most complex in terms of accounting and reporting, but it can be economically justified for certain business models and sectors.
• Professional Income Tax (PIT for self-employed). A special regime designed for individuals and IEs working without hired employees and providing services or selling goods they produce themselves. Annual income is limited to 2.4 million rubles. Tax rates are 4% on payments from individuals and 6% on payments from legal entities or other entrepreneurs. A key feature is the absence of mandatory insurance contributions. However, self-employed individuals may voluntarily contribute to the pension system to build up length of service and future benefits.
• Unified Agricultural Tax (UAT). A specialized regime for entrepreneurs engaged in agricultural production. At least 70% of revenue must come from the sale of the entrepreneur’s own agricultural products. The main tax is 6% of the difference between income and expenses, with the possibility for regional authorities to set lower rates, including zero, for priority categories. This regime is not relevant for most service or trade businesses but remains important for the agricultural sector.
• Automated Simplified Taxation System (ASTS). An experimental regime designed to reduce the administrative burden on micro and small businesses. Since January 1, 2025, ASTS is available in all regions of Russia. It exempts entrepreneurs from a number of taxes (including VAT in most cases, profit tax and personal income tax on business income) and from insurance contributions. The tax is calculated automatically by the tax authorities based on data from online cash registers, banks and the taxpayer’s personal account. Two options are available: 8% on income, or 20% on income minus expenses. To use ASTS, a business must meet several criteria: no more than five employees, annual income of up to 60 million rubles, residual value of fixed assets not exceeding 150 million rubles, and bank accounts only in authorized banks.

When choosing a regime, entrepreneurs should assess expected turnover, cost structure, the need to work with VAT payers, and long-term growth plans. A change in scale or business model may justify switching regimes.

Accounting and reporting for IEs

Maintaining records and filing reports on time is mandatory for individual entrepreneurs, regardless of the chosen tax regime. Modern digital tools have significantly simplified this process for small businesses. Online platforms such as “Kontur.Elba”, “Moyo Delo” and “Tinkoff Accounting” automate tax calculations, generate reports and remind users of deadlines. The cost of using such services usually starts from about 500 rubles per month.

As the business grows, it may become more efficient to involve professionals. Outsourced accounting or legal firms often charge from around 3,000 rubles per month depending on the volume of operations, number of employees and complexity of tax accounting. For larger businesses with employees, warehouses and extensive document flow, hiring a full-time accountant (with typical salaries from 40,000 rubles per month and higher) is often justified.

For individual entrepreneurs with a simple business model, no employees and cash accounting (where all incoming funds are treated as income and all actual payments as expenses), it is often possible to handle accounting independently using online tools, submitting reports electronically via services connected to the tax authorities.

Key expenses for registering an LLC

Registering a limited liability company (LLC) involves a broader range of mandatory and optional expenses compared to an IE, but the entry threshold is still relatively low by international standards.

The main cost items include the following:

• State duty and EDS. The state duty for LLC registration is 4,000 rubles but is waived when documents are submitted electronically through the FNS website or via a notary. For paper submissions, the duty must be paid in advance and the payment document attached to the application. An electronic digital signature for the company is required for online registration and subsequent interactions with authorities; it usually costs 2,000–3,000 rubles, plus 1,200–2,000 rubles for a USB token if needed.
• Charter capital. The minimum charter capital for an LLC is 10,000 rubles. It must be fully paid within four months from the date of state registration. As a rule, there is no requirement to keep this amount permanently in the company’s bank account — after registration, it can be used in the business. For certain regulated activities, legislation or regulators may require higher capital.
• Social insurance and pension contributions. As an employer, the LLC must pay contributions on employees’ salaries. The standard combined rate is around 30%, including pension, medical and social insurance. For income above a certain annual threshold, the rate on the excess is reduced. Additional contributions for accidents at work and occupational diseases are set individually depending on the professional risk class. Companies in the register of small and medium-sized enterprises (SMEs) benefit from reduced rates: 30% on payments up to 1.5 times the minimum wage and 15% above that amount. Some manufacturing companies with at least 70% of revenue from qualifying activities can apply a reduced rate of 7.6%.
• Legal address and office costs. The company must have a legal address specified in the founding documents. This can be the founder’s residential address (with owner’s consent), a rented office or a virtual address for registration purposes only. Renting a small office of 15–20 m² in a regional city may cost from 10,000 to 18,000 rubles per month, while in Moscow similar premises may cost around 50,000 rubles. Virtual addresses typically cost from 5,000 to 30,000 rubles per year depending on the region and service package.
• Bank account, cash register, license and stamp. An LLC must open a bank account for cashless settlements and tax payments. The monthly servicing fee usually ranges from 500 to 700 rubles. According to recent digital banking rankings, banks such as Alfa-Bank, VTB, Gazprombank and several others are leaders in terms of online service for businesses. Where a company accepts cash or card payments from individuals, cash register equipment (KKT) is mandatory, with some exceptions when funds are transferred directly to the account or processed by couriers using their own KKT. Equipment prices start from about 7,000 rubles and increase with integration requirements. For activities subject to licensing (education, medical services, alcohol trade, hazardous substances, private security and others), a license is required; the basic cost usually starts at 7,500 rubles plus related expenses. As with IEs, a company stamp is optional and costs from around 1,000–2,000 rubles if the company decides to use one.

Taking into account the minimum charter capital, state duty (if not exempt), EDS token and basic legal address, the total initial cash outlay for setting up an LLC often starts from approximately 15,500 rubles, not counting optional equipment, licenses and office rent.

Tax regimes for LLCs

LLCs in Russia can use several taxation regimes, depending on the scale of the business, type of activity, cost structure and composition of clients.

• General Taxation System (GTS). This is the default regime for LLCs if another option is not chosen at registration. It includes value added tax (VAT) at a standard rate of 20% and a reduced rate of 10% for certain categories of goods and services, corporate profit tax (up to 25%, depending on the allocation between federal and regional budgets), property tax on real estate based on cadastral value, and, in some regions, trade tax. GTS requires full accounting, regular VAT and profit tax declarations and is usually chosen by companies working with large customers, government contracts or foreign trade where VAT invoicing is essential.
• Simplified Taxation System (STS). Available to companies whose annual income does not exceed 450 million rubles. Organizations under STS are exempt from VAT, provided their revenue remains below a statutory threshold; where limits are exceeded, a partial VAT obligation may arise. STS offers two options: 6% on total revenue, which is optimal for low-cost business models, or 15% on profit (income minus expenses), which is more beneficial when there are significant deductible costs. Depending on the region, property tax on organizations may apply if real estate is taxed based on cadastral value, and trade tax may apply for retail operations. STS substantially simplifies tax administration and is popular with small and medium-sized businesses.
• Automated Simplified Taxation System (ASTS). Since 2025, ASTS has been available across all regions of Russia and is aimed at micro-enterprises. It is structurally similar to STS but with fully automated tax calculation by the tax authorities, based on data from cash registers, banks and the taxpayer’s online account. Companies under ASTS pay either 8% of income or 20% of income minus expenses. The tax period is one month, and payment is due by the 25th of the following month. Businesses under ASTS are relieved from filing standard tax returns and from paying a number of other taxes and insurance contributions, subject to restrictions on revenue, number of employees and types of activity.

Progressive personal income tax

As of 2025, Russia operates a five-tier progressive personal income tax (PIT) system. The basic rate of 13% applies to annual income up to 2.4 million rubles, while higher brackets are taxed at increased rates, up to 22% on income exceeding 50 million rubles per year. This approach is designed to distribute the tax burden more fairly and to increase budget revenues from high-income individuals.

For entrepreneurs, this is relevant both when they work as IEs under GTS and when they receive salaries and dividends as owners or managers of LLCs. When planning business structures and personal income strategies, it is important to consider how PIT interacts with corporate taxes and the chosen regime.

Accounting and reporting for LLCs

Like IEs, LLCs are not formally required to maintain an in-house accounting department. Accounting and tax reporting can be organized through online services, outsourced to external providers or handled internally with a dedicated specialist.

Online accounting platforms for legal entities usually start from around 500 rubles per month, offering tools for calculating taxes, preparing declarations and submitting reports directly to the authorities. Outsourced accounting firms often charge from 5,000 to 15,000 rubles per month, depending on the complexity of operations, tax regime and the set of services (accounting, tax compliance, payroll, consulting). For growing or large companies with significant transaction volume and complex financial flows, hiring a full-time accountant (or a team) with salaries starting from about 40,000 rubles per month is typically more practical.

IE vs LLC: entry threshold and business perspective

Compared with many other jurisdictions, the entry threshold for entrepreneurship in Russia remains relatively low. For instance, in Armenia the creation of a legal entity normally requires a full-time accountant from the outset, while in Turkey the minimum charter capital for some corporate forms is 50,000 Turkish liras, which is significantly higher than the Russian minimum when converted to rubles. Against this background, Russian requirements — a charter capital of 10,000 rubles for an LLC and minimal direct costs for registering an IE — look relatively modest.

At the same time, Russia offers a wide range of promising and growing niches: from IT and e-commerce to professional services and small manufacturing. The state actively supports entrepreneurs through programs for small and medium businesses, innovative sectors and import substitution projects, as well as through new tax regimes such as ASTS and various benefits under STS and UAT for qualifying activities.

In numerical terms, minimum cash costs to start an IE (when registering online and without additional optional expenses) can be kept around 3,300 rubles, while launching an LLC with basic infrastructure usually requires at least about 15,500 rubles. The real budget will depend on the chosen tax regime, need for licences, cash register equipment, office space and professional support.

For foreign entrepreneurs or those planning cross-border structures, it is important not only to compare formal costs, but also to assess regulatory risks, currency controls, tax treaty networks and long-term business strategy. In many cases, an initial choice in favor of a simple IE or a small LLC becomes only the first step in a broader structuring process.

If you have specific questions about how these rules apply to your project, it is advisable to discuss them with professional advisors familiar with Russian corporate and tax law and with the practical requirements of registration authorities and banks.