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Establishing business in Russia. Legalization of foreign employees

Employment in Russia

At the present time, the procedure for the legalization of foreign employees is rather complex and involves obtaining various permits from the Federal Immigration Service, Federal Immigration Department, Employment Center, as well as the Tax Inspectorate and a number of other authorities. The following is the procedure for obtaining employment authorisation for foreign nationals temporarily resident in Russia and having a visa.

1)       Submission of a foreign labor forecast

According to Government Regulations each company seeking to employ foreign nationals has an obligation to participate in the forecasting campaign by submitting information about demand for foreign specialists.  All in all, this demand is taken into account when forming the quota rate for certain regions of Russia and the all-Russia rate.  In other words, the Russian Government sets a national quota for the maximum number of available work permits and work visas for each year. Quota numbers do usually vary from year to year and are allocated among professions, nationality as well as regions of Russia. For these reasons an employer should submit a forecast in order to obtain a quota of work permits.

Companies which have not complied with the forecasting requirements in the stated terms do not obtain a quota and will be unable to obtain work permits. At the same time, the submission of a forecast does not mean that a company will get a quota. The forecasts are considered by a special Interdepartmental Commission and decisions taken no later than 10th July of the year when the forecast was submitted.

Special attention should be paid to the timing: If a company wanted to attract and hire foreign specialists in 2011, the forecast for 2011 had to be submitted before May 1, 2010.  Many new companies establishing business in Russia are facing difficulties in applying for work permits because they are not able to submit forecasts in time.  

2)       Submission of an application and its processing in an Employment Center

Not less than a month before submitting an application to the Federal Immigration Service a company should inform the Employment Center of newly established positions for which they plan to employ foreign specialists.  Should an Employment Center succeed in finding an adequately qualified Russian citizen available to do the job, the application will be rejected. It is evident that companies’ disclosure about new vacancies is being used as a means of solving problems in the national labour market.

3) Processing of an employment permission

One month later the employer may start filing documents with the Federal Immigration Service to obtain employment permission. This document allows a company to employ foreign nationals and includes information about the quantity of hired specialists, their nationality, jobs as well as the regions where they can work. 

4) Processing of an individual work permit

Work permits are issued individually for each foreign national and are valid for no more than 1 year. To obtain a work permit, a foreign national is obliged to undergo a medical examination and to be free from HIV, drug addiction, tuberculosis, leprosy (Hansen illness), syphilis, Chlamidial lymphogranuloma and chancroid. Certificates should also be provided to confirm professional qualifications. A work permit is issued in the form of a two-sided plastic card.  Side A contains personal data such as name, date of birth, nationality, ID, position, photo and validity period of a work permit.  Side B specifies the employer and his tax identification number, work permit number, date of issue, etc. In practice, the acceptance of work permit applications can be denied following the fulfillment of the quota. All applications are then terminated irrespective of positions applied for.

5) Company accreditation for visa support

A company should also register with the Federal Immigration Department.  Obtaining a so-called “record card” enables an employer to apply for invitations for business and work visas, process multiple work visas, and undertake immigration recording of foreign visitors.

6) Processing of a work visa

A foreign national employed in Russia is obliged to stay on the basis of a work visa. If a visa does not accurately reflect the intentions and reason for the visit, a fine with possible deportation may be imposed. 

Processing of a work visa consists of two steps:

-          obtaining an invitation and the processing of a 3 month work visa

-          the conversion of a 3 month work visa into a multiple entry work visa after entering Russia

Work visas may be extended if a work permit was processed within time scales for a new period.

The immigration recording (or registration) should also be undertaken upon arrival. For details please refer to the corresponding section.

7) Notification of tax authority on employment of foreign nationals

Once a work permit and work visa are received and an employment contract (civil contract) with a foreign specialist is concluded, the employer shall notify tax authority within 10 days.

Traveling across Russia while employment

Special attention should be paid to provisions regulating the travel of foreign nationals employed in Russia. There are instances when a foreign national staying in Russia can perform work outside the region of the Russian Federation for which they were issued a work permit:

A. Business trip

If a foreign national temporarily staying in Russia is sent on a business trip, the total duration of work outside the stated region should not exceed 10 calendar days within the validity of the work permit. 

B. Regular employment includes traveling or field work and this is stipulated in the labour contract 

If a foreign national is temporarily staying in Russia on this basis, the total duration of work outside the stated region must not exceed 60 calendar days within the validity of the work permit.

Accompanying family members

Accompanying family members receive corresponding visas that are based on the work visa of the employed family member. The procedure is similar to a work visa application: a 3 month visa for a family member is processed initially and then revalidated as a multiple entry visa for an additional family member. The procedures for undertaking immigration recording as well as other provisions for staying in Russia are also applicable. Accompanying family members have to obtain separate work permits if they work.

A work permit is not needed for the following foreign nationals:

1.      Permanent residents in Russia (holders of permanent residence permit);

2.      Participants in state programs for the assistance of voluntary relocation of nationals living abroad and their family members wishing to relocate to Russia; 

3.      Employees of diplomatic corps, consular institutions of foreign states in the Russian Federation and private domestic staff of the above stated individuals;

4.      Employees of foreign legal entities (producers or suppliers) hired to assemble and maintain equipment imported into Russia;

5.      Journalists accredited in the Russian Federation;

6.      Students studying in Russian educational establishments and working on vacations;

7.      Students studying in Russian educational establishments and working there as assistant staff in their spare time;

8.      Lecturers (tutors) invited by an educational organization (except individuals coming to teach in religious institutions);

9.      Employees of accredited (as required by Law) representative offices of foreign legal entities that are within the quota of allocated staff according to bilateral international agreements between Russia and respective jurisdictions. 

Employment of highly qualified specialists

A highly qualified specialist (hereafter - HQS) is defined as a foreign national having experience, skills or achievements in a certain sphere if the terms of employment meet the following criteria:

1)       The salary of the HQS is no less than 1 000 000 Russian Rubles per annum and the HQS is going to hold a position as a scientist/tutor invited to the Russian Federation for research and scientific work or teaching in accredited institutions of higher education, the State Academy of Sciences or its regional departments, etc.

2)       Foreign nationals employed in Skolkovo are not required to have a minimum salary (under the Federal Law ‘On the centre of innovation “Skolkovo”’).

3)       All other categories of HQS are required to earn no less than 2 000 000 Russian Rubles per year.

IMPORTANT!Foreign nationals entering Russia for predicant or religious activity cannot be employed as a HQS.

Please pay attention to the following specifics of employment for HQS:

A.Highly qualified specialists can be employed by:

·        Russian commercial entities;

·        Russian scientific organizations, educational institutions (except religious institutions);

·        medical institutions and other organizations conducting scientific, technical or innovative activities, research projects, the testing and preparation of staff according to state priority areas of science and technology development in the Russian Federation, if covered (as required by Law) by state accreditation;

·        accredited (as required by Law) branch offices of foreign legal entities in the Russian Federation.

·        WHICH Have not violated laws for THE employment of foreign nationals IN THE 2 years prior to applying for work permits for highly qualified specialists 

B.To employ a HQS the following requirements should be met:

• payment of a salary in the amount established by law (please see above);
• the HQS as well as his/her family members coming with him/her to Russia are required to have a medical insurance contract covering Russia or to have the right to receive first medical aid on the basis of a contract concluded with the employer of the HQS. Both contracts mentioned should be valid for the duration of the employment (civil) contracts concluded with the HQS. A copy of the medical insurance contract or contract for first medical aid with the employer should be submitted to the immigration authorities along with other documents.    

C. Specifics:

·        A work permit must be issued for the duration of the employment (civil) contract concluded with the employer inviting such a specialist, but for no more than 3 years. A work permit can be renewed for 3-year periods within the duration of the employment (civil) contract.

·        If a highly qualified specialist is planning to work in several regions of Russia, one work permit covering these regions can be issued.

·        A work permit is issued beyond the quotas regularly established by the Russian Government.

The following is the procedure for employing highly qualified specialists:

1)       Processing of a work permit

2)       Processing of a work visa/invitation for a work visa

If a foreign national stays in Russia on the basis of a work visa (on the basis of a work permit issued by a Russian legal entity), his/her visa can be renewed as a work visa for a HQS as soon as the work permit for the HQS is received. Such a visa can be processed within Russia.

If a foreign national is an employee of a branch office of a foreign legal entity or stays outside Russia and has not been employed within Russia, an invitation should be processed. This invitation will be the basis for obtaining a work visa valid for the period of the work permit issued for the HQS for up to 3 years.

3)       Notification of tax authority of employment of a foreign national

Once a work permit and work visa are received, the employer shall notify the tax authority within 10 days. 

4)       Registration of a foreign national with the tax authority(or obtaining of an individual tax identification number –INN);

5)       Notification of immigration authority of tax registration of a foreign national with the tax authorityshould be completed within 30 days upon the receipt of a work permit by the HQS

6)       Notification of immigration authority of salary of HQS

An employer is required to file quarterly notifications to the immigration authorities of the salary of HQS, the termination of employment (civil) contracts and in a number of other specific cases.

Immigration registration procedures should also be completed.

Travel by a HQS across Russia while employed

As you are already aware, a highly qualified specialist may have a work permit covering several regions of Russia. However, if a work permit does not cover the region where a foreign national intends to travel, the following rules should be kept in mind. There are instances when a foreign national staying in Russia can perform work outside the region of the Russian Federation for which they were issued a work permit:

A. Business trip

If a HQS is sent on a business trip, the total duration of work outside the stated region should not exceed 30 calendar days annually within the validity of the work permit. 

B. Regular employment includes traveling or fieldwork and this is stipulated in the labour contract 

The total duration of a HQS’ work outside the region of Russia for which the foreign national was issued a work permit is not restricted.

Accompanying family members of HQS

·        The following relatives are recognized as family members of a HQS (for the purpose of obtaining a family member visa): wife/husband, children (including adopted children), husbands and wives of children, parents (including adoptive parents), and spouses of parents, grandmothers, grandfathers and grandchildren.

·        Family members of a HQS can obtain regular work visas issued for the duration of the HQS’ visa with the right to renew it.

·        Family members of a HQS may work in Russia, and may be granted a work permit in addition to those allotted within the annual government quota. Employers of HQS family members do not require employment permission for the stated category of foreign nationals. 

·        The length of stay given to a HQS and their family members (who do not need a visa to enter Russia) depends on the terms stipulated in HQS’ work permit.

·        Highly qualified specialists and their family members can apply for permanent residence in Russia.

 Liability for violating Russian immigration laws

www.timservices.ru/tim_migration/images/stories/esta.pdf