Following your request, I

researched the Russian company

law and I can provide you with
some
advice about what would be the
best next step for establishing your
business in Russia.
Following your request, I
researched the Russian company
law and I can provide you with
some
advice about what would be the
best next step for establishing your
business in Russia.
Following your request, I
researched the Russian company
law and I can provide you with
some
advice about what would be the
best next step for establishing your
business in Russia.
Following your request, I researched the Russian company law and I can provide you with some advice
about what would be the best next step for establishing your business in Russia.

First, I will explain to you what a WFOE is. WFOE stands for “Wholly Foreign Owned Entity”. Before
WFOEs were allowed in Russia, the only thing companies could do was to either go into Russia whith a
joint venture or representative office. With a WFOE, you can establish a limited liability company or in
Russian, OOO, on the other hand a representative office can only be used for representing and
marketing for a foreign-owned entity.

there are some advantages as well some disadvantages of using a WFOE to lunch your new chocolate-
flavoured energy drink. The biggest advantage of a WFOE is that a WFOE is an independent legal entity
with limited liability. That means it has the same legal status as any other Russian company and if in the
worst case your business wouldn’t as planned, your main company wouldn’t be liable. The biggest
benefit of a representative office is also the biggest disadvantage of WFOE, the taxation. Because the
WFOE is considered a legal person, it also has the same obligations as other Russian legal person, such
as tax and reporting requirements. With a representative office, you don’t have these obligations, but
the business activities are restricted, so it is not much more than your company’s marketing arm in
Russia.

My advice to you would be to go with a WFOE. The energy drink market is very competitive and bears
many risks, so it would be the best to lunch the new product from a safe position, so if the project fails,
your main company is not liable. I really hope that the letter helped you with your decision and I’m
looking forward for an answer.