Simplyfied procedure for employing highly-skilled foreign professionals

Pepeliaev Group hereby informs that Federal Law No. 86-FZ “On Amendments to the Federal Law ‘On the Legal Status of Foreign Citizens in the Russian Federation’ and Specific Legislative Acts of the Russian Federation”(hereinafter – the “Law”) was adopted on 19 May 2010. The Law introduces numerous amendments that enter into force fr om 1 July 2010, including a simplified procedure for employing certain categories of foreign professionals. We highlight here some of the main changes.

1. The Law introduces a simplified procedure for employing highly-skilled foreign professionals

The Law introduces a new category – “highly-skilled professional”. This is an employee, who has work experience and skills or achievements in a specific area and whose employment terms stipulate an annual salary (remuneration) of two million roubles or more.

The Law establishes a simplified procedure for employing highly-skilled foreign professionals, namely:

• Employees may hire highly-skilled professionals without obtaining a permission to employ foreign citizens;
• In respect of highly-skilled professionals the quota system does not apply (i) for the issue of invitations to enable the foreign citizens to enter the country and practice their profession and (ii) for the issue of work permits.
• A highly-skilled professional is issued a work permit for the term of his or her employment agreement. At the same time, the maximum term of a work permit or a work visa has been set at three years (under the general rule, it is set at one year);
• It will take the Federal Migration Service 14 business days (in other words, about three weeks) since the filing of an application to adopt a decision on the issue of such a permit

The right to employ highly-skilled professionals under the simplified procedure is primarily granted to Russian businesses and the accredited branches of foreign companies.

Please note that the simplified procedure does not apply to the accredited representative offices of foreign companies.

2. Procedure for employing foreign citizens applicable to the representative offices of foreign companies

According to the Law, the accredited representative offices of foreign companies now have the right to employ foreign citizens without obtaining permissions “within the limits of the number agreed at the time of the accreditation of said representative offices by a competent accreditation authority based on the reciprocity principle in accordance with international treaties of the Russian Federation”.

This wording can be interpreted in different ways. To date it remains unclear whether this relaxation of the rules will apply to all the accredited representative offices or only to cases where a respective international agreement exists.

3. Introduction of a special procedure allowing individuals to employ “visa-free” foreign citizens

The Law simplifies the procedure wh ereby Russian citizens can use the labour of “visa-free” foreign citizens. If the work is performed for personal, family and other similar purposes unrelated to business activities, then an employment or civil law agreement may be signed, provided that the foreign citizen has a patent.

If the individual has a patent, the Russian citizen does not have to obtain a permit to employ and use the labour of foreign citizens and the foreign employee does not have to obtain a work permit to sign the agreement.

4. Other provisions of the Law

The Law has revised and supplemented the procedure for obtaining and extending work permits of “visa-free” foreign citizens. For example, the Law regulates the procedure for extending work permits. Under the amended Law, a decision to extend the validity of a work permit is adopted, irrespective of the quotas in respect of the issue of such permits.

Starting from 1 January 2013 foreign employees will be photographed and have their fingerprints taken when obtaining work permits. These provisions do not apply to highly-skilled professionals.

The Law also amends certain provisions of Part Two of the Russian Tax Code. For example, the individual income tax rate will be reduced from 30 to 13 percent for (a) highly-skilled professionals and (b) “visa-free” foreign employees working on the basis of a patent.