Certain types of business activities can only be carried out in Russia with a special license issued by authorized licensing bodies. The following activities, and some others, are subject to licensing:
- Pharmaceutical activities and production of medicines;
- Development, production, repair, sale and trade of weapons and military equipment;
- Overseas and inland waterway passenger and freight transportation;
- Use of highly explosive and hazardous objects for production;
- Production, storage, usage and distribution of explosive materials for an industrial assignment;
- Activities related to the exchange of narcotic and psychoactive drugs.
Licensing is carried out on a Federal and regional level. To obtain a license, an application must be submitted to the licensing authorities. The licensing requirements for most activities are similar.
The decision to grant or deny a license is generally made within forty five days after the authorities receive the application and all accompanying documents. Regulations on the licensing of certain activities can stipulate shorter processing periods.
A license’s validity term depends on the licensed activity but, in general, licenses are issued for an indefinite term.
Licenses are issued separately for each type of activity. It is prohibited to transfer a license to another legal entity or individual. A license becomes invalid when an organization is liquidated or terminates activities as a result of reorganization (unless it is reorganized via transformation) and when a sole proprietor’s state registration certificate expires.
In accordance with the procedure established by the Administrative Code of the Russian Federation, authorized licensing bodies are entitled to suspend a license if the licensee is violating the licensing requirements and conditions.
If a regulated activity is undertaken without the appropriate license, the competent government agency is likely to request the court’s permission to liquidate the company and confiscate all income derived from the unlicensed activity.
Performing a regulated activity without the appropriate license is likely to cause significant penalties and other consequences. The penalties and consequences depend on specific circumstances.
For certain business activities, instead of receiving a license, companies are required to be members in professional self-regulated organizations that set their own membership criteria (e.g. applies to engineering, construction and valuation services).
Certain types of business activities can be conducted only on the basis of a special license issued by an authorized licensing agency.
Article reprinted from kpmg.ru, Copyright © 2013 ZAO KPMG, a company incorporated under the Laws of the Russian Federation, a part of the KPMG Europe LLP group, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Reprinted with permission of ZAO KPMG. All Rights Reserved.
All information provided is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the facts of a particular situation.
For additional news and information, please access KPMG’s Web site on the Internet at http://www.kpmg.ru.