May 27, 2010

The Russian parliament has approved a new decree that promises significant and positive change for companies bringing foreign nationals into Russia.  Immigration procedures for foreign nationals earning over 2 million rubles (approximately $65,000USD or €53,000EUR) a year will be significantly quicker and less administratively burdensome for the employer.

The decree, an amendment to Federal Law #115, is set to take effect from 1 July 2010.  As always, in every country but perhaps particularly in Russia, it is important to note that, although the changes detailed below have been approved by the Duma, and signed by President Dmitry Medvedev, implementation is likely to be gradual and may be subject to some delay and confusion.  Pro-Link GLOBAL will, of course, be monitoring the situation carefully and guiding our clients through the Russian process as the changes take place.

What’s New? 

Russia is joining many other countries in a bid to attract the best foreign professionals. A quicker, simplified procedure has been introduced for all foreign nationals who meet the highly qualified professional criteria.

Who Qualifies? 

According to Section 1, Article 13.2 of the named Federal Law, the definition of a highly qualified professional is largely salary based.  To qualify, the worker must be paid at least 2 million rubles (approximately $65,000USD or €53,000EUR) a year.  He or she must also have significant work experience, skills and achievements. 

In addition, an initial review of the amendments indicates that the new route will only be available to Russian LLC (“OOO”) companies, branches (филиалы) of foreign companies and Russian scientific organizations.  Representative offices are not mentioned in the amendment.

Finally, if a Russian LLC company or branch office of a foreign company has been administratively penalized for violating rules and procedures around hiring foreign nationals during the two years immediately prior to the application, they will not be permitted to use the new route.

What Are the Benefits? 

Highly qualified professionals will benefit from the following improvements:

  1. Exemption from the quota requirement.  As many of our clients will know, Russian work permits are issued under a quota system.  Quotas are allocated federally and then subdivided by region.  Each company wishing to hire foreign nationals for the coming year must submit a labor forecast request by 1 May of the previous calendar year, and will then receive their allocated quota places based on that labor forecast.  Currently, only certain named and specialized positions are quota exempt, so the move to make all “highly qualified professionals” exempt is a significant change.
  2. Company work permits will no longer be required
  3. Processing time for the personal work permit will be reduced to 14 days(from 30 days)
  4. The personal work permit will be valid for three years (rather than one year)
  5. The corresponding work visa will also be valid for up to three years
  6. Conversion from business visa status to work visa status will be possible
  7. The work permit can be valid for multiple regions on the territory of the Russian Federation (provided these regions are listed in the employment contract)
  8. Certification of educational level will no longer be necessary
  9. Work permits will be “extended”, provided the application is submitted at least 30 days prior to expiry of the current work permit and that correct supporting documents are included.  Currently, a new work permit application (rather than an extension application) must be submitted each time a foreign national’s work permit expires.  The new extension process should take only 14 days.
  10. Permanent residency may be sought upon arrival in Russia.
  11. Foreign nationals will be taxed only 13% on all income from the day they arrive in Russia (currently, tax is 30% until the foreign national has been in Russia for 183 days).

Additional Documentation

There are no burdensome requirements, but the following additional items will be necessary for applications under the new route:

  • A finalized employment contract (rather than a draft)
  • Evidence of full, private medical insurance for employee and all accompanying family members
  • Registration of each highly qualified professional with the tax inspectorate, and notification of the same to the migration authorities within 30 days of the work permit issue
  • Quarterly notification to the migration authorities regarding salary, tax and any long vacation (over one month) details
  • The original passport must be submitted to collect the work permit.

Further Changes 

Also announced were the following changes:

  • Quota exemption lists will now be announced by 31 March for the following calendar year (i.e. the exemption list for 2012 will be announced by 31 March 2011), in order to give companies time to prepare applications for any foreign nationals who do not meet the “highly qualified” criteria.
  • Notifications of exit (de-registrations) will no longer be required for foreign nationals travelling within the territory of the Russian Federation. The notification of entry in the new region is still required and will cover the exit from the previous region.
  • Foreign nationals not requiring visas (i.e. Commonwealth of Independent States nationals, from the former Soviet Republic) who are working for Russian individuals, for example as drivers or domestic employees, will no longer be issued with work permits but will instead be required to obtain licenses.  These licenses will be issued for one to three months and can be extended for subsequent periods of three months.

ACTION ITEMS FOR EMPLOYERS 

Note that the changes announced in this Global Brief are extensive and will completely change the typical corporate immigration process for Russia.  The changes do not come into effect until 1 July 2010 and we do anticipate that there will be some delay and confusion as the changes are implemented.

No action is necessary at this time.  Pro-Link GLOBAL will continue to actively monitor and follow up on the situation and will ensure that our clients benefit from these enhanced procedures.

Caveat Lector | Warning to Reader 

This is provided as informational only and does not substitute for actual legal advice based on the specific circumstances of a matter. Readers are reminded that Immigration laws are fluid and can change a moment’s notice without any warning. Please reach out to your local Pro-Link GLOBAL specialist should you require any additional clarification.

Pro-Link GLOBAL worked with our PLG |KGNM Correspondent Office in Russia to provide this Global BRIEF alert to you.