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Work Permits
Work Permit Quota Application
Companies wishing to employ foreign nationals in Russia must submit information regarding foreign labor needs forecast (quota applications) to the employment authorities by 1 May of the previous year. Such applications should be broken down by position and by nationality. So, companies have to go through a rather difficult exercise and predict far in advance whom they plan to employ during the next year, and in what role. The authorities would only allow those positions and nationalities that are indicated in the application and are officially allocated to this particular company as quota. This means that a company will be unlikely to be able to change its mind and, for example, seek to hire a French rather than an Italian manager, in the event that the quota application was for an Italian.

The local employment authorities responsible for reviewing these quota applications must, initially, advise failed applicants by mid July, and successful applicants prior to August. Each region then passes its consolidated approvals up to a Federal level, and the national quota is meant to be set (in a database listing each successful company, by location, by position and by nationality) by the end of October for the following year. Approvals made in August can be superseded by this consolidation process. Unfortunately, for the two years in which this practice has been operational, the procedure has not been followed exactly by the authorities. For 2009, the database was not published in the autumn of 2008, and the exact mechanisms for quota allocation were indeed not clear until well into the spring of 2009 itself. For 2010, most regions of Russia completed the summer 2009 rejection and approval notifications, with Moscow being a notable exception.

In early December 2009 the final database setting out the quota for 2010 had not yet been published. 2009 also saw some cuts to the quota during the course of the year, somewhat to the surprise of those companies affected. Companies that experience errors in their quota, or who are newly formed or have registered new divisions in new locations in Russia, or where there is a need to add or change the quota can apply to the Interdepartmental Commission on Migration matters for the region in question. A reserve level of additional quota is kept back at a Federal level to facilitate this, but good arguments do need to be made to the Commission if additional quota is to be granted, or the perceived error corrected.

Experience shows that cases are generally reviewed upon their merits, but the process can still take time, even where successful. The Law governing work permits also allows the authorities annually to publish a list of positions which are exempt from quota. These have in past years covered senior executive positions and one or two technical IT roles. However, this list does need to be annually renewed, and it is not always operational at the start of the year, but is rather disseminated at some point in spring. However, this can be a useful means of adding flexibility for persons whose roles are covered.

Draft Law 2010
The Draft Law concerning highly qualified specialists was approved by the Federation Council on May 13th, 2010 and has been sent to the RF President for signing. The Draft Law will come into force on July 1st, 2010. The Federal Law amending the Law on the legal status of a foreigner in the Russian Federation and Budgetary and Tax Codes has brought a lot changes to the existing system of working conditions of foreigners in the RF.
Work permits and permissions to employ foreign workers - based on the new system, highly qualified foreign workers shall be exempt from the quota application procedure. The new system would just require an employer to submit an application to the respective state body for such highly qualified workers. Such an application must be considered within 14 days. High qualification shall be determined based on the salary threshold (starting from 2 mln. RUR per year) and documents proving it (diploma, reference letters, etc.). It should be especially noted that the 2 mln. RUR should be received from Russian sources only.
The duration of the work permits is extended to 3 years for the highly qualified workers, in accordance with the period of the labor agreement's duration.
The registration procedure has been substantially simplified. An employer no longer has to notify the migration service every time its foreign worker leaves the city he is working in.
The list of professions (positions) that are exempt from the quota system will not be subject to change.
Highly qualified workers will have the right to obtain residence permits for themselves and their family members for the period of labor agreement's duration.
Work visas for the highly qualified worker will be issued for 1 year, with a possibility of an extension of up to 3 years.

One Window Approach
For members of certain business associations, the authorities have sometimes expedited regimes; whereby, applications fro work permits and visas can be submitted at some place and time with the Federal Migration Service, making the processing time significantly quicker than usual.

Non-CIS Citizens
Under the current provisions of the Russian immigration legislation, each employer engaging foreign nationals from countries for which visas are necessary to enter Russia, is obliged to obtain Russian individual work permits for them. The starting point is for the employer to register with the employment authorities and submit an initial report on job vacancies. In order to apply for work permits, the company must fulfil the following obligations in the following order:
1) Update information on job vacancies with employment authorities; wait one month;
2) Apply to the Federal Migration Service fora corporate permit for the engagement of foreign labor; the Federal Migration Service will then confirm with the employment authorities that the positions for which permission to hire foreigners is sought have been listed as vacant for one month, and that no appropriate Russian candidates have been found; one month later the corporate permit will be issued;
3) Apply to the Federal Migration Service for an individual work permit; one month later the individual permit will be issued.

At the third stage, the application will tend to need to include, for executive and technical positions, some sort of certification of the foreigner's competence to hold the position. This will be a professional qualification or a certificate of higher education, which will need to be apostilled in the home country and submitted with a Russian notarized translation. The foreign national will also need to submit certification of his health, including confirmation from a medical facility that he is free from an extensive list of conditions and diseases.

From start to finish, therefore, assuming quota exists, obtaining a work permit should take no less than three months, but in reality the process can be significantly slower, especially if all documents are not in exactly the right order that the authorities require. The precise details of what is required are also subject to change, which can make the process highly frustrating.

Any individual work permit (regardless of the citizenship of its holder) is valid only for the region within Russia where that foreign employee is going to work. It is also possible to apply for a multi-regional work permit. In this case, the company needs to register with the local employment authorities in each region for which the work permit is needed. However, each stage of the application then needs to be completed by each region concerned; this can cause delays.

Once the individual work permit is obtained and an employment agreement with foreign national is concluded, the employer is obliged to inform the following state authorities about fact of employment of a foreigner:
Tax authorities (within 10 business days);
Employment authorities (within 1 month);
State Labor Inspection (within 1 month).

The individuals themselves do not have such notification obligations.

CIS Citizens
As concerns most CIS countries for citizens of which visas are not necessary to enter Russia, the individuals themselves are obliged to apply for their individual work permits prior to applying for a job with any employer. The employer should not apply for a corporate permit for the engagement of foreign labor in respect of CIS nationals.

There are three possible options for CIS citizens to apply for an individual work permit:
apply in person;
apply through an organization officially authorized to assist foreign nationals with employment;
authorize a third party, to be a representative of the individual in applying for his/her work permit.

There are also notification requirements with regards to non-visa expatriates; whereby, companies should notify various state bodies, including:
Immigration authorities (within 3 days);
Tax authorities (within 3 days);
Employment authorities (within 3 days).

Exemption from Work Permit
Work permits are not needed for the following categories of individuals:
Citizens of Belarus;
Permanent residents of Russia (those who hold permanent residency permit);
Employees of diplomatic missions, consulates and international organizations;
Employees of foreign companies (manufacturers or suppliers) engaged in the installation, installation supervision, servicing, war ranty servicing and after-guarantee repairs of installed equipment (montage and chefmontage);
Journalists accredited in Russia.

RESIDENCE PERMITS

Temporary Residence Permit
Temporary residents reside in Russia on the basis of temporary residence permits. Such permits are issued for three years and empower foreign nationals to temporarily reside in Russia prior to obtaining the permanent residency permit. Temporary residence permits are issued subject to an annual quota established by the Russian Government. Some categories of foreign nationals, most notably those married to Russian nationals, are exempt from this quota.

There is a different registration requirement applicable to temporary residents; whereby, they should be registered at the address of their residence. Temporary residents must register on an annual basis. There is special type of visa based on which a temporary resident may enter the country. It is issued at the time of his or her registration as a temporary resident in Russia. Under this registration, they can obtain only a single-entry visa, issued for 4 months, which can then be prolonged for the period of validity of the temporary residency permit. However, the most important complication related to this visa, is that each time the individual leaves and re-enters Russia, he must apply for an exit-entry visa.

Temporary residents cannot change the place of their residence and work away from the region of Russia for which the temporary residence permit is granted. Temporary residence permits are valid for up to three years, but there is no procedure for their extension. The inherent assumption is that a temporary resident would progress on to becoming a permanent resident. The same procedures for work permit applications applies to temporary residents.

In summary, therefore, becoming a temporary resident confers no material advantage compared with persons who are temporarily located in Russia on work visas and work permits. Work permits are still required, and the visa regime is more restrictive rather than less so. The main advantage of a temporary residence permit is therefore that it enables the holder to apply for a permanent residence permit.

Permanent Residence Permit
A temporary resident can apply for the permanent residence permit, provided he resided in Russia for at least one year on the basis of a temporary residence permit. Permanent residents are allowed to travel in and out of Russia without any restrictions, as no Russian visa is required in this case. No work permits are needed for permanent residents, and they may therefore be employed by any employer within the region concerned without restriction.

Permanent residence permits are issued for five years and may be re-issued for a similar period an unlimited number of times. As with temporary residents, permanent residents are subject to annual re-registration in Russia.

Sanctions for Non-Compliance
Even for minor violations in the immigration area, the authorities have full rights to the draconian penalty regime set out in the Administrative Code. The obvious intention of the above is to reinforce the responsibility of the foreign nationals visiting and working in Russia, as well as their employers for staying compliant with the Russian immigration and labour laws. In practice, these fine levels are not always imposed, with lesser (though still substantial) levels often being used, but this is entirely at the discretion of the authority concerned.

Sanctions are imposed separately for each violation in respect of each foreign employee engaged unlawfully and include:
Sanctions for engagement by employers of foreign citizens without work permits (up to 5,000 Rbs for the individual, 50,000 Rbs for the executives, 250,000-800,000 Rbs for the company or suspension of activities of the company for up to 90 days);
Sanctions for engagement by employers of foreign citizens without a corporate permit to engage foreign labour (similar as above);
Sanctions for not notifying immigration/employment/labour/tax authorities on engaging a foreign citizen, or upon the early termination of a foreign national (up to 5,000 Rbs for the employing individual, 50,000 Rbs for the responsible executives, 400,000-800,000 Rbs for the companies);
Sanctions for violation of immigration related enrolment rules (up to 5,000 Rbs for the hosting individual, 50,000 Rbs for the responsible executives, 400,000-500,000 Rbs for the company).

Common Pitfalls
Immigration compliance in Russia remains a complex and frustrating area. The current situation at any time should not be assumed as a permanent one. The Russian immigration authorities tend to change the procedure and requirements of any application in the course of the application process, which, with tight time deadlines, can force companies to restart the procedures from the very beginning. Even if companies follow all requirements of the Russian employment and immigration authorities, this can never guarantee successful results.

2010 is likely to see an even worse environment, with a reduced overall quota approved, late publication of the detail, and increased scrutiny of the authorities in relation to work permit applications, supporting documents, notifications in respect of hiring and termination of foreign individuals, registration requirements, and an increased level of immigration audits. More and more foreign citizens are now looking for possibilities to apply for Russian temporary and then permanent residence permits to avoid the number of immigration related requirements and procedures.

Organizations should be prepared; the process will be time and resource consuming, sometimes undefined and varied, but should also remember that by now, most companies ma nage to achieve the required results, or a practically acceptable workaround. Individuals, in turn, should also be prepared for some unexpected additional requirements with regard to immigration documents, medical tests, their arrivals and departures to, within and from Russia.

The most common incorrect assumptions and practical problems include:
"Working" in Russia on a business visa is acceptable;
Persons obtaining an "Inosotrudniki" visa do not need a work permit;
It does not matter if you forget to complete the enrolment and de-enrolment procedures each time the expatriate enters and exist Russia;
Provided you have one work permit then you can fulfil multiple roles or work for multiple different group entities or locations;
Work permits can always be expedited provided you have the right contacts;
It is always the fault of HR/Admin/External Immigration Service Provider if something goes wrong.
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