If you want to answer the question, “How can a foreign citizen legally work in Russia”, you should understand some legal terms and definitions of immigration and labor law.
Employment of foreign citizens
Labor activity, and more precisely – ‘employment’ of a foreign citizen — stands for working in Russia under an employment contract or under an independent contractor agreement that covers performance of particular work or rendering services. If a foreign citizen who is physically present in Russia works remotely for a foreign company, such labor activity cannot be interpreted as “employment”.
The employer or the ordering party for works/services are entitled to hire foreign workers, subject to prior received permits for such hiring, and foreigners have a right to be employed, if work permits have been granted.
Permit to hire foreign workers
Russian companies, branches and representative offices of foreign legal entities may employ foreign citizens or order their services only if they were granted the state permit to hire foreign workers. Foreigners who are registered as Individual Entrepreneurs (so called IP) in Russia can also apply for such permit. Permits are to be granted subject to state limitations (so called quota limits).
Generally, any foreigner must obtain a work permit to be employed in Russia. Work permits are granted for the period of temporary residence or for the duration of an employment contract/an independent contractor agreement. This period cannot exceed 1 year after the date of entrance of a foreign citizen into the territory of Russia. Should the term of temporary residence expire before the term of a contract, it can be prolonged up to the expiration date of a contract. Work permits are to be granted subject to state quota limits.
Employers must apply to state authorities to receive invitations for entry into Russia for their foreign employees, as well as to acquire work permits for them.
Generally, to be granted temporary or permanent residence permit, work permit or labor permit foreigners must take a special complex test of Russian as a foreign language, Russian history and basic principles of the Russian legislation.
Certain categories of foreigners are relieved from such duty, namely:
- Minors (under age of 18);
- Men who have reached the age of 65, women – the age of 60;
- highly qualified specialists and members of their families who have applied for a permanent residence permit;
- citizens who applied for a permanent residence permit and having a parent (adoptive parent, guardian), son or daughter, who are citizens of the Russian Federation and who permanently reside in the Russian Federation, etc.
Temporary residence permit and permanent residence permit
To be employed in Russia a foreign citizen must prove he/she legally resides in Russia, either temporarily or permanently.
Temporary residence permits (abbreviated in Russian as RVP) are granted subject to governmental quota limits. To be granted RVP most categories of migrants have to take the complex exam.
Permanent residence permit (abbreviated in Russian as VNZH) allows foreign citizens or apatrides to live and work in Russia for a long period of time. RVP results in obtaining the status of a permanent resident of Russia. If a foreigner was previously granted RVP he/she can use simplified procedure to obtain Russian citizenship. To compare: most categories of migrants can apply for Russian citizenship in 5 years after being granted RVP (subject to continuous living in Russia for this period).
To protect the domestic labor market in Russia state authorities annually revise and establish quota limits for invitations for entry into Russia, as well as for work permits for foreigners. Sometimes it may be difficult for companies to get the necessary quotas. However, it is possible to apply for work permits and invitations without any restraints. Such exceptions are provided for the following categories of labor migrants:
— for «qualified specialists»;
— for «highly qualified specialists» and members of their families;
— for foreigners with the right of visa-free entry into the Russian Federation, who have obtained a labor patent;
— for foreign workers employed in subsidiaries, branches and representative offices of foreign commercial organizations in the Russian Federation, if such foreign organizations are registered in the Member States of the World Trade Organization (WTO).
The state authority responsible for the issuance of work permits, permits to hire foreign workers, invitations for entry into Russia is the Main Directorate for Migration Affairs of the Russian Federation (hereinafter – migration department), as well is its territorial units.
The list of professions, job occupations falling under the category of «qualified specialist» is established by the Ministry of Labor. Generally, this list includes professions of creative nature (for example, artists, directors, conductors). The category of qualified specialists also includes top management positions (for example, the general director of a joint-stock company, the director of a company, enterprise, etc.).
Highly qualified specialists
Foreign citizens may be employed in Russia as highly qualified specialists (abbreviated in Russian as VKS). There is a minimum wage standard established by law for this category of workers:
— teachers or scientists invited for carrying out research or teaching in the authorized organizations must have salary of no less than 1 million rubles per year;
— other categories of foreign workers must be salaried at the amount of 2 million rubles per year;
— the salary standard does not apply only to foreign employees, engaged in working in Skolkovo Innovation Center.
VKS must demonstrate experience, skills and achievements in his/her field. However, the standard for the VKS’s qualification must be designated by the employer, not the state. There are no qualification requirements prescribed by law.
Highly qualified specialists can be hired by: Russian companies (commercial); by a number of Russian organizations involved in scientific, educational, innovative activities, experimental development, testing, etc.; by accredited branches of foreign legal entities.
An employer must by his own efforts apply for work permits, as well as for invitation for entry into Russia. He has to file a petition with the migration department with the copy of the employment contract or the independent contractor agreement, as well as his written promise to cover all expenses incurred in case VKS’s deportation. The abovementioned petition is to be processed within 14 days after submission.
Advantages of VKS status:
- VKS is granted a work permit as long as his employment contract is valid, but this period cannot exceed 3 years. Later a work permit may be renewed an unlimited number of times. The permit can be renewed for the period not exceeding 3 years at a time. The appropriate application must be filed by the employer, not the employee.
- At the request of VKS and his family permanent residence permit may be granted for the duration of the employment contract. *
* Generally, the term of temporary residence cannot exceed 90 days within one stay lasting no more than 180 days. This rule does not apply to VKS.
— State quota limits for work permits are not applicable to VKS and members of his family.
— VKS and his family are relieved from the duty to take integrated test of Russian as a foreign language, Russian history and basic principles of the Russian legislation.
— VKS is taxed at the rate of 13% (personal income tax), irrespective of his recognition as a Russian tax resident. Compare: personal income of Russian non-resident is taxed at a rate of 30%.
A foreign citizen can declare himself highly qualified specialist. For this purpose, he must file a petition with the Russian migration department representative office or (more often) with the Russian Embassy in his own country. The information about such VKS is kept in a special data base and is published on the website of the Russian migration department. VKS described above may apply for business-visa (for 30 days) and subsequently come to Russia to negotiate with prospective employer. Such employer must draw up a written invitation offer (not formal invitation for entry).
NB: an invitation offer differs from an invitation for entry. Invitation offer must be made in simple written form. Quota limitations are not applicable. An invitation for entry must be issued either by the migration department or by the foreign affairs authorities. Quota limitations are applied to invitations for entry.
Foreign citizens who are entitled to visa-free stay in Russia, if they are legally present within the territory of the country, can be the party to an employment contract and to an independent contractor agreement, concluded both with individuals and legal entities. Such foreigners may apply for a labor patent rather than for a work permit.
A patent shall be issued no later than 10 days after the application has been submitted to the migration authorities. The term of the patent varies from 1 month up to 12 months. It can be extended for a period of 1 month numerous times. The life of a patent, subject to all renewals, cannot exceed 12 months in total. Upon the expiration thereof a foreign citizen can apply for a new patent.
A patent entitles its owner to work only within the territory of the region where the patent was issued. If the term of the patent has expired (the patent has not been renewed, a new patent has not been issued), and the term of the temporary residence has expired, the foreign citizen must leave the Russian Federation not later than 15 days after the expiration date of the patent.
Foreigners exempt from the obligation to obtain a work permit
The most common categories of foreign citizens who are not required to apply for a work permit:
— foreign citizens permanently residing in the territory of the Russian Federation (i.e., having obtained a permanent residence permit);
— researchers and teachers invited to Russia;
— accredited employees of accredited representative offices of foreign legal entities within the number of employees that was agreed upon accreditation, subject to the comity established by an international agreement between the origin state of the foreign citizen and the Russian Federation.
Employment of foreign citizens in subsidiaries, branches and representative offices of foreign commercial organizations registered in Member States of the WTO
Foreign companies (registered in WTO countries) can establish in Russia their own subsidiaries providing services, as well as branches or representative offices. Subsidiaries are to be registered in accordance with the rules of registration for legal entities.
Branches and representative offices must undergo the accreditation procedure. The Federal Tax Service of Russia (FTS of Russia) is responsible for such accreditation. The accreditation authority is assigned to Inter-District Inspectorate of the Federal Tax Service of the Russian Federation for Moscow No. 47.
Before submitting documents for accreditation of a branch or representative office, a foreign company must obtain an approval of the number of foreign employees to be hired. Such approval is to be granted by Chamber of Commerce and Industry of the Russian Federation (hereinafter — CCI). A company must identify the number of prospective foreign workers in special forms. Subject to the indicated amount, a company must apply to the CCI for personal accreditation for each worker.
There is limitation as to the number of foreign workers in a representative office – not more than 5.
The personal accreditation process can take up to 6 months. The personal accreditation rule implies avoidance of the quota limits for employment of foreigners.
The employer must obtain a state invitation for entry for employees. Personally accredited personnel do not require work permits, if there is a corresponding treaty between Russia and the state of the foreign company registration.
In other cases, a work permit is required. For this purpose, a petition must be submitted to the migration authorities, with a set of prescribed documents. Quota limits are not applicable in this case. The term for consideration of the application is 30 days.
Note: the abovementioned procedure (i.e. without quota limits) is applied if a foreign employee has worked in the mother company at least 1 year prior to his work transfer to Russia and:
- the employee will occupy the position of the head of the representative office, or;
- the employee is hired as key personnel or as a head of the subsidiary or the company’s branch, or;
- a foreigner is employed in subsidiary or a branch and his position implies rendering services, his annual salary is 2 million rubles at least, the employee is highly qualified (or) has extraordinary knowledge necessary for the operation of the branch or subsidiary.
In Russia there are state limitations on the employment of foreign specialists. Firstly, the quota limitations are applied for invitations for entry into Russia, as well as for work permits. Secondly, in order to obtain a work permit most categories of labor migrants have to take the complex test of Russian as a foreign language, Russian history and basic principles of the Russian legislation.
To avoid the application of quotas for the employment of foreigners, you can:
— register in the Russian Federation a subsidiary (that renders services) of a foreign commercial organization and invite foreign specialists from the mother company (this rule applies if mother company is registered in one of the WTO countries);
— establish a branch or representative office of a foreign commercial organization (this rule applies if headquarters is registered in one of the WTO countries) in Russia. Upon registration company must obtain CCI’s approval of the number of foreign employees to be hired and later apply for personal accreditation and work permits (in the absence of the respective treaty) and invitations for entry for each foreign worker;
— hire personnel that fall into the categories of “highly qualified specialists” (VKS) or “qualified specialists”.
Branches of foreign commercial organizations are also entitled to employ VKS. In such a case the rules on personal accreditation are not applicable. The procedure for legalization of VKS is less time-consuming.
VKS status is beneficial not only for employers, but also for foreign employees. VKS and their family members are exempted from the duty to take the integrated test of Russian as a foreign language, Russian history and basic principles of the Russian legislation. Moreover, the latter can obtain work permits regardless of quota limits. VKS are taxed at a favorable tax rate of 13% on their personal income.
Foreign citizens who want to work in the Russian Federation, but have not yet found an employer willing to hire them, can declare themselves to be highly qualified specialists (if they fall under this category). After information about them is published in the relevant state data bases, such foreigners can receive an invitation offer (not an invitation for entry!) from potential employers and subsequently come to Russia with a business visa (for 30 days) to negotiate their employment.
It is notable that foreigners can legally work in Russia not only under an employment contract, but also under an independent contractor agreement.
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Suren Avakov www.atplaw.com