Registering Property in Russia
Registration Requirements:
| Procedure | Time to complete: | Cost to complete: |
| Seller obtains the technical passport at the Bureau of Technical Inventory (BTI)* |
7-30 days (simultaneous with procedures 2, 3, and 4) | coordinate individually |
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Comment: The seller should obtain technical inventory documents (the technical passport) from the local bureau of technical inventory. The cost of BTI documentation represents the cost for local technical inventory services to draft these documents. The cost of services is variable in different regions of Russia. In Moscow, the costs are the following: - extract from technical passport (form 1a): RUB 106 - floor plan: RUB 1.3 for each square meter (929 sq.m. = RUB 1207.7) - explanation of floor plan: RUB 90 for each page of this document (2 pages) The documentation shall include: Application (standard form) The document certifying rights of the seller to the property (must be in possession of the seller) A letter of guarantee (with respect to payments for BTI services) An official document confirming applicant's authority to act on behalf of a legal entity (i.e. power of attorney and passport of the applicant) A document showing the legal boundaries of the property (i.e. to ensure that there are no unauthorised alterations or modifications). Under Clause 28 of the New Competition (dated 26 July 2006) Law the buyer must obtain preliminary approval of the Federal Antimonopoly Service (the FAS) for an acquisition of real estate property if the book value of the real estate property being acquired exceeds 20% of the book value of fixed and intangible assets of the seller, provided that (i) the aggregate value of assets of the buyer, according to its latest financial statements and the seller (group of the seller) exceeds three billion roubles (currently approximately US$111 mln); or (ii) their aggregate proceeds from the sale of products (works, services) for the last calendar year exceeds six billion roubles (currently approximately US$111 mln) and, at the same time, the value of assets as per the latest financial statements of the seller exceeds one hundred fifty million roubles (currently pproximately US$5.6 mln); or (iii) either the buyer or the seller is included in the register of business entities as having a market share of a particular product (work or service) of more than 35% . The FAS must be notified about the purchase of real estate property by the buyer if the aggregate assets value, according to the latest financial statements of the buyer and the seller, or their aggregate proceeds from the sale of products (works, services) for the calendar year preceding the year of acquisition of real estate property or other actions, exceeds two hundred million roubles (currently approximately US$7.4 mln); and, at the same time, the aggregate assets' value according to the latest financial statements of the seller (group of the seller) exceeds thirty million roubles (currently approximately US$1.1 mln) The antimonopoly permission is not necessary for the state registration of the transfer of title to the property in Procedure 6, but its absence may lead to recognizing the transaction as void. NOTE: Due to the recent changes in the Russian antimonopoly legislation, such would normally apply to major transactions and would not be necessary for small and medium transactions such as the one described in this case study.It would take about one month and cost the equivalent of 100 minimum wages. The documentation shall include: Application (standard form) Other documents specified in the governmental regulations.
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| Seller obtains the cadastral plans at the Committee for Land Resources and Land Management* |
7-30 days (simultaneous with procedures 1, 3, and 4) | coordinate individually |
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Comment: The seller should obtain the cadastral plans from the local subdivision of the Federal Agency for Cadastre of Real Estate. The documentation shall include: Application (standard form) The document certifying rights of the seller to the property (must be in possession of the seller) Proof of payment (fee for obtaining information from the cadastre) Proof of payment (fee for copying information from the cadastre).
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| Seller obtains the extracts from the Unified State Register of Real Estate Property* |
7 days (simultaneous with procedures 1, 2, and 4) | coordinate individually |
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Comment: A non-encumbrance certificate on the property must be obtained from the Unified State Register of Real Estate Property maintained by the State Registration Department of Rights to the Real Estate Property. The cost of the extract is RUB 100 for individuals and RUB 300 for legal entities.
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| Buyer or the seller obtains an extract from the Unified State Register of Legal Entities containing the information about the seller* |
7 days (regular procedure) or 1 day (expedited procedure) (simultaneous with procedures 1, 2, and 3) | coordinate individually |
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Comment: A certificate containing information about the seller can be obtained from the Unified State Register of Legal Entities maintained by Federal Service of the Russian Federation on Taxes and Duties. Although the expedited procedure is not defined by law, it is widely practiced by most branches of Russian Tax Authorities – keepers of the Unified State Register for Legal Entities.
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| Notarization of corporate documents by seller and buyer | 1-2 days | coordinate individually |
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Comment: The seller should obtain notarized copies of the certificate on state registration of ownership title on the building as well as the certificate of ownership. The buyer and seller should obtain notarized copies of the certificate of LLC state registration, the charter, the foundation agreement, the certificate on individual taxpayer numbers, and the informational letter of State Committee on Statistics. Notarization costs about 500 RUR for each document (RUB 10 per page) with a state notary, whatever rates are established by a private notary. The documentation shall include: Certificate on state registration of ownership title to the building and certificate on state registration of ownership title to the land plot (Obtained in Procedure 3). Certificate of LLC state registration, the charter, the foundation agreement, the certificate on individual number of a taxpayer, and the informational letter of state committee on statistics (must be in possession of the buyer and seller).
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| Registration of the transfer of the building and the land plot at the State Registration Department |
30 days | coordinate individually |
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Comment: The documents obtained in procedures 1, 2, 3, and 5 shall be presented to the Moscow Department of the State Registration Service. According to the law, state registration is implemented in the following order: - acceptance of registration documents - legal scrutiny of documents and examination of the lawfulness of the agreement - clarification of the grounds for refusal or suspension of state registration - entry to the registry in case there are no grounds for refusal, or suspension of state registration - notes on the title documents and issuance of certificates regarding implemented state registration As of January 2005, the Order of the Ministry of Justice No. 4 allowed for the possibility of expedited registration procedures. However, this Order was merely an advisory document and not intended to establish official expedited procedures. Moscow does not have a law in place that grants expedited procedures. Instead, there are private, commercial organizations which offer expedited services – however, their services may be limited (for example, servicing only certain areas) and costly. These services are not widely used. Current legislation imposes on the seller an 18 percent VAT on the sale of property. However, sale of land plots is not subject to VAT in Russia since 1 January 2005. These taxes are regulated by the regional legislation and generally equal to up to 2.2 % (property tax). Parties are not required to pay any other fees or taxes connected with the property, besides those noted here. The documentation shall include: Cadastral plans and technical passport (obtained in Procedure 2) Certificate on state registration of ownership title to the building and the certificate on state registration of ownership title to the land plot (obtained in Procedure 3) Extract from Unified State Register of Legal Entities (obtained in Procedure 4) Signed sale and purchase agreement Corporate documents and the power of attorney Application for state registration.
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