Getting registered as an individual entrepreneur - Setting your bank account - Choosing an online register service provider - Setting internet-acquiring - Paying taxes.
Author: Laura Pickens Laura Pickens is an American teacher of English who has been living in Russia (in Krasnodar) since 2009. In this article she shares her experience of getting registered as an individual entrepreneur and setting everything for accepting payments.
While there are plenty of people who don’t work “in the white,” I cannot afford not to. I comply with the law in all aspects to keep my business legal. The system can feel intimidating to anyone, let alone a foreigner who doesn’t understand the foreign system and all while speaking in a foreign language. Setting up your Business If you want to work “in the white,” you must register your business, even if you are a private English tutor. This is true of all independent professions like hair dressers, nannies, cleaners. Russia has created an easy way for most of these professions to register under the self-employed structure called самозанятые. There are a lot of benefits to this structure including simplified laws and a smaller tax. Unfortunately, at the moment (April 2021), this structure is not available to non-Russian citizens. For us, we only have the choice to register an ИП (Индивидуальный Предприниматель - individual entrepreneur). Every year, Russia is making things more streamlined through the central government service gosuslugi, but, again, it is only available to Russian citizens.
To begin the process I went to Инспекция ФНС* to submit my documents to open my ИП. They are not very difficult to gather, but I used a service to prepare my documents. Also before this point I had not gotten my СНИЛС. This is a basic document you must have for most government services. It’s similar to a social security number. I also needed to get and hand over a notarized translation of my foreign passport. When opening your ИП you must select a ОКВЭД code, which is a description of your business activities. For example, this is mine: 85.41.9: Образование дополнительное детей и взрослых прочее, не включенное в другие группировки This code is most appropriate for private language tutors.
*In Moscow the only Tax office registering new individual entrepreneurs and companies is the one #46 - ИФНС №46 - MoscowLiving.
Tax Structure Once I registered my ИП, I had to go to my tax office to set up my tax structure (Упрощенная Cистема Налогообложения - УСН). I had 30 days to do this before facing penalty.
* You can set up your tax structure during the same visit you are registering your ИП. In the tax office, they will give you a form to fill - MoscowLiving.
Quarterly Payments I am on a simplified tax structure. There are minimum payments I make every quarter that are due before the end of the quarter. In this system 8 112 rub is paid to Страховая часть (pensions fund payment) and 2 106.50 rub to ОМС (Медицинское страхование - Medical insurance). My accountant handles this for me and sends me QR codes each quarter. In addition to this, if your income is higher than 259 584 RUB, you owe 6% of your total income minus the previous amounts. Again, this is handled by my accountant. These numbers slightly grow every year.
54-Ф3 - Онлайн-касса A new law is going into effect July 1, 2021. This will affect a lot of ИП holders, and more specifically tutors like myself. We will be required to have an онлайн-касса (online kassa), or online register. This is a payment system that allows the federal tax office to have records of all your transactions, and also provides checks to your customers - printed or virtual, sent to their email. In my case, I will not need an actual physical terminal, because I do not teach in person and therefore do not accept cash. My students all pay me through online transfers. I am using a cloud-based online register, which produces electronic checks. There are several steps in setting this up.
*Online register is needed only for accepting payments from individuals. If a company makes a payment to your account, an online receipt is not required - MoscowLiving
Open a Bank Account With your ИП, you can open a bank account at the bank of your choice. As my business is done all online, I wanted a bank who had strong online capabilities. For me that is Tinkoff. If you are unfamiliar with Tinkoff, they are an online bank. There is no physical office. When you must interact with someone, such as to verify your documents, someone drives to your location. It is extremely convenient and fits how my business works. Unfortunately, I have had many issues with Tinkoff. They had problems accepting my documents and needed to verify them twice. I couldn’t open an acquiring account and no one knew why. They claimed it was because I wasn’t a Russian citizen, but then it suddenly started working. My account was blocked, but when I called they just told me to delete my cookies when it was obviously a problem on their side. Why my account was blocked, I still do not know. They have gotten my name wrong twice now and I can’t seem to activate a second account. They do offer lots of business solutions that I like, but it hasn’t been easy going.
So, I cannot quite recommend them.
Renting an Online Register You need a separate company to provide your online register. Tinkoff has a limited number of online kassa providers that work with their bank. I researched each one. Searching reviews online, I found some have poor records of customer service. Some were not quick to answer my phone calls. Looking at the remaining, when broken down, they all cost essentially 30 000+ rub a year. The final factor for me was Бизнес.Ру promised they would handle the registration process with the tax office, and I would not have to do anything else myself. Electronic Signature - ЭЦП для регистрации кассы I also needed to establish an electronic signature. I faced a problem with this. I tried to register one when I opened my ИП , but my accountant told me my request was denied by the tax office. Probably connected to the fact I am not a Russian citizen. My Online Register provider also provides this service for 2 500 rub. I needed my СНИЛС, ВНЖ, passport, translated and notarized copy of my passport, and Оригинал или копия свидетельства о постановке на учет физического лица (свидетельство о присвоении ИНН) / уведомление о постановке на учет. They handled the rest. I was able to scan and send in my documents, but I still needed to physically visit an office to finalize the process. Luckily for me their local partner had a branch very close to where I live.
Acquiring Once I had established my bank account with Tinkoff, I had to turn on acquiring services. It was a second separate application process, different from opening my account. Tinkoff offers this service, but I had problems opening it. At first my application was approved, but then I couldn’t establish my store. No one could understand why. I believe it was a problem because I am not a Russian citizen. A few very angry phones did manage to get it to work, however. Once I had an acquiring service, I had to create a store. There are 2 types of stores that Tinkoff allows you to create. One is a typical e-commerce store where you handle checking out on the website. The other allows you to create checks via link that you can send over something like Whatsapp. This is meant for people who advertise and sell over social media, but who do not have an actual website. I went with this option as I don’t have an online store and I’m not selling products.
*An acquiring service we can recommend is YooKassa. They can also handle the online register - Moscowliving. Connecting the Online Register to my Bank Once I had my tax office login information, a functioning bank account with acquiring turned on and an approved store, and an electronic signature, I was ready to have my online register provider set a time to set everything up. Funnily enough this requires me to have Teamviewer and allow a third party to connect to my computer and my bank. This is how many phone scams work as well. But this is just a coincidence. As I said before I went with business.ru and it was a good decision. I watched as the tech set up everything on my computer. He walked me through how I would interact with it and it was all done in about 90 minutes. He took care of the ФН, and connecting to the tax office and ОФД.
Day to Day Operations Tinkoff’s internet-acquiring (интернет-эквайринг) Before my lessons, using my computer, not my phone, on Tinkoff’s site I go to internet-acquiring and create a check (выставить счет). Here I fill out all the information for my client. Once it’s created I send my client the link.
When my student gets the link, they see a checkout screen similar to any internet store. I have activated all types of payment. I pay a higher percentage for things like apple pay, but I wanted it to be as easy as possible for them. To save money you can have your clients pay by QR code.
Once my client pays, that transaction is ‘caught’ by my online kassa. The sale is registered and a receipt is sent to the email that they put in the payment screen. Taxes
As of now, I don’t know how this will affect how I pay taxes at the end of this quarter. I will continue to use my current accountant. I will post updates as I go through it.
How long does it all take I opened my ИП last year, and it took about a month. It shouldn’t take that long, but I had to translate my passport, get my СНИЛС, things you should already have. As for opening a bank account, getting an online register, I started that process March 27 and finished April 9. I was going as fast as possible. I can’t imagine that it could be faster. Online registers will be required by July 1, 2021. My experience is, don’t wait till the last minute.
This article originally appeared at https://www.laurapickens.ru/ and has been republished here by a kind approval of Laura Pickens.