Foreign companies may stop doing business in Russia on April, 1

All permissions and certificates allowing doing business in Russia for foreign companies and issued before January 1, will expire on 1st of April and foreign representative offices will lose their right to work in Russia.

These grave subsequences are applicable to those «foreigners» which fail to comply with the art.8 of the Federal Law No 106-FZ dd. May 5, 2014 «On amending certain legislative acts of the Russian Federation» being in force since 1st of January, 2015.

Unofficially, there are more than 7000 foreign companies in Russia. The Law applies to branches and representative offices of the foreign companies being accredited before 1st of January 2015 and having permission valid after 1st of April except for representative offices of foreign depository institutions and foreign companies doing business in civil aviation.

According to the Law, prior to the 1st of April, 2015 the branches and representative offices of foreign companies should provide information to Inter-district inspection of Federal tax service No 47 in Moscow for inclusion into the state register of accredited branches and representative offices of foreign companies.

As explained by Yulia Vassiljeva, lawyer of PRIORITET Law firm, provision of information consists of two steps: at first you should certify the number of foreign personnel of the branch or representative office of the foreign company in Trade Chamber of Russia (this applies even to those who has no foreign staff in the company) and then provide information to Inspection No 47 in Moscow. It is recommended not to wait until the last since there is more in this than meets the eye.

Documents are accepted by two officers in the Trade Chamber of Russia in business days from 9 to 12 a.m. Consideration and certification will be started only after receipt of payment.

After certification of number of foreign personnel, the company doing business in any region of Russia (no matter if it’s Sakhalin, Krasnodar of Moscow) will provide information into Tax Inspection No 47 in Moscow. Information should be provided according to forms approved by the Order of the Federal Tax Service of Russia № No MMV-7-14/684@ dd.26 December, 2014. Tax services take 3 business days for consideration of documents and 5 business days for issuance of document confirming inclusion of information into the register.

The Law on «re-accreditation» was passed on May, 2014 and six months later, in January 2015, there still were not forms and applications for this procedure. According to Yulia Vassiljeva, lawyer of PRIORITET Law firm, it is quite problematic to get any clarifications from Tax services relating «re-accreditation». Today you can see long lines in the halls of both Trade Chamber and Tax inspection No 47; the requirements are changing all the time: you cannot do today what you did yesterday and vice versa. All this mess with documents does not improve investment climate and capital flow in Russia. Therefore do not delay the «re-accreditation» — start it as soon as possible. At first you should check the powers of the head of branch or representative office under the power of attorney, and verify that POA is valid.

In case you have any problems with the power of attorney for head of office — we deeply sympathize, since issuance of a new power of attorney in the country of registration of parent company, its legalization (apostille) and further translation in Russian and notary certification takes at least 2 weeks and even 2 months. In the event «foreigners» fail to file the documents to Tax inspection No 47 before 1st of April, 2015, they will have to open the representative office from the very beginning again and have to start and accreditation procedure too. Official state fees from each representative office of the foreign company will be more than 100 000 roubles.