Doing business in Russia

The minimal charter capital of an insurance company depends on the kind of insurance the company is involved in and is between RUR 60 million (€600,700) and RUR 480 million (€4,700,600).

Insurers must comply with the solvency requirement established by law as related to reserves, an assets structure, reinsurance quotas, obligations against own capital ratio, etc.

Also, in some cases (e. g. life insurance, health insurance) insurance company activities shall be limited to only one type of insurance.

Currently, insurance services are provided for more than 100 types of insurance, the most popular of which are compulsory motor third party liability insurance (MTPL), accident and illness insurance, and personal property insurance.

Regulation, control and supervision of the activities of insurance entities: insurance organizations, insurance brokers and mutual insurance societies is carried out by the Bank of Russia.

The main tasks of the Bank of Russia are to prevent and suppress violations of insurance legislation and unfair practices, ensure the protection of the rights and legitimate interests of consumers of insurance services and the effective development of the insurance business.

The focus of insurance supervision is aimed at creating a reliable insurance environment, increasing the responsibility of the insurance business and consumer confidence in the insurance service. One of the key focuses of the Bank of Russia concerns the improvement of mechanisms for protecting the rights and legitimate interests of consumers of insurance services, as well as the development of behavioral supervision practices.

Taxation

Individuals

Personal income tax is imposed on the income of Russian residents and individuals who have sources of income in Russia. Individuals are deemed residents of Russia, for tax purposes, if they are present within the Russian Federation for at least 183 days in the calendar year (which is from January 1–December 31). In this case they are subject to Russian tax on their worldwide income. Non-residents pay tax on the Russian-source income only, at a rate of 30%, as against a flat rate of 13% for residents. Residents pay tax at the rate of 13% (against 15% for non-residents) on dividends received. However, from 1 January 2021, a progressive taxation scale will be used (so-called «wealth tax»), so resident individuals whose total personal income exceeds RUR 5 million (€54,555) subject to income tax of RUR 650,000 (€7,092) plus 15% of their income.