Amendments are being prepared to the accreditation procedure for branches and representative offices of foreign legal entities

Pepeliaev Group advises that a draft law has been put before the State Duma that is aimed at improving the accreditation procedure for branches and representative offices of foreign companies

The Russian Government has put before the State Duma a draft law[1] that amends the Law on Foreign Investments in the Russian Federation[2]. The amendments are aimed at improving the investment climate for foreign investors operating in Russia.

The draft law stipulates, among other things, the following amendments:

• reducing to 15 business days the period for examining documents submitted for the accreditation of foreign branches and representative offices (save for the branches and representative offices of foreign legal entities operating in commercial aviation area). Under the current version of the Law, this period is specified as 25 business days;
• introducing the procedure for suspending the accreditation for up to 15 business days if the necessary documents have not been submitted or do not comply with the forms and requirements. If the violations are not cured during the period set out in the decision on suspension, accreditation will be denied.

At present, a failure to submit the necessary documents for accreditation or a submission of documents that do not meet the established requirements is a ground for accreditation to be denied.

Apart from the amendments ensuring an additional protection of foreign legal entities, the draft law introduces new grounds for accreditation to be denied.

It is suggested, for instance, that restrictions be imposed with regard to appointing as top managers of a foreign legal entity’s branch or representative office any individuals held liable under administrative law in the form of disqualification which has not expired by the time when the documents are filed.

It is also prohibited to give accreditation to a new branch or representative office of a foreign legal entity that has arrears in payments to the state budget system of the Russian Federation.

What to think about and what to do

We recommend following up on the status of the draft law and bearing in mind in the future both the new opportunities offered and restrictions imposed by the adopted law.

Help from your adviser

Pepeliaev Group lawyers have a considerable experience of advising on the issues of accreditation of branches and representative offices of foreign companies and are ready to provide any kind of legal support during the opening of branches and representative offices of foreign companies in Russia, as well as during all stages of their subsequent operation.