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For questions and inquiries write to: Julia Yurkevich <[log in to unmask]> www.ilpp.ru Louis Skyner Establishing Business in Russia: Selecting a Company Structure. – Moscow: Institute of Law and Public Policy, 2003 – 24 p. The Russian government over the past two years has developed a comprehensive programme for economic policy. Not only legislative but judicial and procedural reform have repeatedly been emphasised as a key component of this policy of overall structural reform. In contrast to previous initiatives the emphasis has been placed on measures to improve the environment for private business and investment. The years 2001 and 2002 witnessed the approval of a number of laws that lay the groundwork for the emergence of a market based institutional structure; the Land Code, Parts 1 and 2 of the Tax Code, the Labour Code, the amendment of Company law and Insolvency law as well as the introduction of a new Commercial Procedure Code. Perhaps most crucially, the tax system has been changed to favour bona fide taxpayers engaged in commercial activity on legal grounds This attempt to develop a more integrated structure resulted from the realisation that an effective private law system capable of dealing with modern commercial relations had not evolved. This paper examines the establishment of business activity in this context. Whilst giving a practical guide to the structure and functioning of companies it analyses the extent to which legislative reform has closed the gap with Western economies in terms of the rights, obligations and benefits of ownership. To this extent it recognises the difference between the letter of the law and its application. The failure to approve and implement the regulatory mechanisms envisaged by new legislative acts perpetuates administrative barriers and high transaction costs. An understanding of this environment and the extent to which it is changing is of crucial importance to any potential investor.