How to open an IE in 2024 in Russia

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How to open an IE in 2024 in Russia: step-by-step instructions

7 minutes of reading

How to open an IE in 2024 in Russia: step-by-step instructions

Registration of an individual entrepreneur is a mandatory measure for legitimate business. We explain when it needs to be opened, when not, and how it is done.

Content

When do I need to open an IE?
Permissions and restrictions on opening an IE
Step-by-step instructions for opening an IE
What should I do after registering an IE?

20.09.2024

How to open an IE in 2024 in Russia: step-by-step instructions

An individual entrepreneur (IE) is an individual who is of legal age and capable of doing business on his own behalf.

Opening an individual entrepreneur is the easiest way to register your business with minimal costs and bureaucracy. An individual entrepreneur is suitable for both small and larger businesses, but not for everyone and not always.

When do I need to open an IE?

Income from entrepreneurship is taxed. If you make one–time irregular deals here and there, it does not mean that you are an entrepreneur. But you can be called that if you work:

independently and take on all the risks.
for a long time and regularly. You can paint and sell a painting once, but selling 10 paintings a month for several months in a row is already a business.
with property: you buy it to convert and sell, or monetize what you have. For example, you turn an apartment into a hostel – this does not apply to the simple rental of apartments.

Also, if you purchase the necessary resources in bulk and keep records of transactions. If at least two of the above items are suitable for you, then you need the status of an individual entrepreneur.

Unregistered business activity is punishable by a fine.

Permissions and restrictions on opening an IE

All capable citizens of the Russian Federation over the age of 18 have the opportunity to register the status of an individual entrepreneur, but with some exceptions.

Who can open a sole proprietorship:

Citizens of Russia;
Foreign citizens who have the right to temporarily or permanently reside in the Russian Federation;
Persons under the age of 18, if they are:

a. married;
b. (upon reaching the age of 16) they have the written consent of their parents or guardianship authorities;
c. (upon reaching the age of 16) are recognized as legally capable by a court decision or a guardianship and guardianship authority.

Only one sole proprietor can be registered per individual.

Who can't open a sole proprietorship:

Active military, state and municipal employees;
Persons deprived of the right to hold senior positions. For example, by a court decision;
Persons who are incapacitated or have limited legal capacity;
Persons who have already opened and closed IE, if the deadline has not expired:

a. from the date of exclusion of sole proprietors from the unified state register of individual entrepreneurs by decision of the tax inspectorate (3 years);
b. from the date of the court's decision to terminate the activities of the sole proprietor forcibly (1 year).

The concept of decomposition

Step-by-step instructions for opening an IE

Step 1: Select the activity type code

You probably already know what you will be doing, and your business needs the appropriate ARCEA code (the all-Russian classifier of economic activities). These codes are indicated in the application for registration.

There may be several codes if you plan to operate in several directions, but one of them should be the main one and bring most of the income. The main code can play a role, for example, in obtaining a loan.

Some types of activities require a license – you cannot engage in sole proprietorship without it. For example, the production of medicines and the sale of alcoholic beverages.

Step 2: Choose a tax system

At the registration stage, it is necessary to choose a tax system. All sole proprietors are automatically connected to the GTS system – a general taxation system suitable for any business. However, in 2024 it is possible to switch to any of the available six options:

the STS – simplified taxation system. It provides two options – 6% of income or 15% of income minus expenses. Most often, it turns out to be the most profitable, and sole proprietors choose it.
PTS is a patent taxation system.
The TPI is a tax on professional income. This system does not provide for employees in your business.
ASTS is an automatic simplified taxation system. This is an experimental system operating from July 1, 2022 to December 31, 2027 in the Republic of Tatarstan, Kaluga Region, Moscow Region and Moscow.
The SACT is a single agricultural tax. It is chosen only for agricultural business.

You can switch from one tax system to another. To do this, you need to submit an application to the tax service no later than 30 days after submitting documents for registration of an individual entrepreneur.

You can switch to the NAP and PSN systems at any time

Step 3: Prepare and submit a package of documents

To register an individual entrepreneur, you will need:

Application for state registration of an individual as an individual entrepreneur (form P21001): This document is the main one for registration.
The original passport and a copy of all its pages.
A receipt for payment of the state fee, if the application for registration is submitted personally through the tax inspectorate. The amount of the fee is 800 rubles, and it can be paid via the Internet or in a bank.
Notification of the transition to a special tax regime if you want to change the OSN system.
Additional documents if the sole proprietor registers a minor.

There are several ways to submit these documents to the tax inspectorate:

Personally at the tax office or by mail with a notarized copy of the passport and signature.
Through the MFC.
Via the Internet on the website of the Federal Tax Service or through the portal "Public Services". This is the most convenient way to submit documents for free.

The application for registration of an individual entrepreneur is considered within three working days. If everything is in order, you will be given a certificate of state registration of an individual entrepreneur; if defects were found in the documents, the applicant can correct them and resend them.

You can get a certificate in person at the tax inspectorate, the MFC, by mail or electronically.

What should I do after registering an IE?

Non-fulfillment of all of the following points carries penalties, so we strongly recommend that you do not forget about them.

1. Open a checking account

If your clients are not individuals who pay you in cash, and you make transactions for more than 100 thousand rubles, then you will need a checking account.

2. Register as a policyholder

If you hire employees – even one under a short–term contract - you become an insured, obliged to pay insurance premiums for it.

Sole proprietors must also pay insurance premiums for themselves – this is a simple duty.

3. Notify about the start of the activity

After registering an individual entrepreneur, the following authorities must be notified:

The Pension Fund.
Social Insurance Fund (SIF), in case you plan to hire employees.

Conclusion

Opening an IE in 2024 is a simple and fast process, but it requires care and responsibility at all its stages. Use the «My Tax» application to make it easier to register and run a business and follow our instructions, and you will be able to successfully register and run an individual entrepreneur.

The status of an individual entrepreneur is the first step towards big business. Create an individual entrepreneur together with the CODDY programming school team. We know how to develop a business.