Russia beckons Update

By John Bonar

Further to my earlier blog, Timur Beslangurov, the immigration specialist and head of Vista Foreign Business Support points out to me that since January 1, 2010 foreigners are exempt from Unified Social Tax which is mainly to cover contributions to pensions and the Social Fund, except for the 0.2% for insurance against accidents at work. Even although it is two weeks since the new law came into force a delay in preparing and approving the application forms to be used means only now are the first applications under the new law being filed.

Timur confirms the process looks like being the hassle-free process I predicted, although obtaining a three year residency permit at the port of entry as touted by the head of Federal Migration Service (FMS) Konstantin Romodanovsky seems to be a window of opportunity only for those foreigners who use the government web-based job-matching service.

For others, who gain employment through head hunters and direct contact with employers a process of application and approval still has to be gone through.

What does seem to be working though is that this category of employee is exempt from quotas and qualifications are the responsibility of the employer, with the FMS not requiring  copies of diplomas and qualifications.

Timur told me that the FMS are firm on the 2 million rubles salary which must be paid in Russia and will be taxed at 13%. He told me that 'benefits in kind' - flights home, children's education, accommodation, health plan and right down to a corporate mobile phone, while still taxable will not count towards the 2 mn RUR qualifying salary.

He agreed with my theory that a foreign entrepreneur could speed up the process of establishing a personal legal presence in Russia by establishing a limited liability company and entering an employment contract with his own company with a salary exceeding $63,000 a year and instantly get a three year residency and work permit.

Timur, whose company is filing its first applications for clients this week, promises to report back on how long the process takes and if it is as hassle free as the government is promoting.