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Knights of the Vine RUSSIA

The Bottom Line

by John Bonar
Expats Playing with Fire!

Who needs a work permit?

“Almost anyone earning a salary for working in Russia, and who is not Russian and does not have a residency permit,” says Jamison Firestone of Firestone Duncan Associates, a law-firm handling work permit applications on behalf of clients.

So everyone who is working here, even as General Director of a company they have bought or set up, and using a one-year multi-entry commercial (business) visa as the basis of their stay is playing with fire. They have got away with it because Russian immigration has not been applying the existing laws. According to Anna Chepik, senior attorney with leading Russian law firm Pepeliev, Glotsblat & Partners, that could change “in the nearest future”.

All they have to do is start applying the existing rules and regulations, which are currently quietly ignored. It is common knowledge amongst visa processing agencies that the immigration authorities have been testing a database system for over a year to track foreigners’ comings and goings.

Already the rules are being applied in some smaller Russian cities, according to Peter Reinhardt, partner, Human Capital at Ernst & Young and chair of American Chamber of Commerce HR Committee.

Most expats here are employed in large organisations, whether multinationals, foreign entities or Russian companies. Their employers without exception obtain the permits.

Obtaining the permit is the sole responsibility of the employer, says Reinhardt. And the actual costs are minimal, with the exception of the deposit required for every employee, the equivalent of a one-way fare on Aeroflot to the capital city of his/her homeland. It is a boring and time consuming task, and the fee you pay a professional to do it for you can be as long as a piece of string.

The problem is most acute for the foreigners with small- and medium-sized businesses here. The lawyers consulted by Passport all agree that processing a work permit will take five to six months if everything goes smoothly. For the first part of this year, it was anything but smooth, as the authorities refused to accept applications from accredited foreign employers.

This problem was quietly resolved this April, as authorities resumed accepting applications from representative and branch offices of foreign companies, ending a four-month log-jam.

Anna Chepik says there are a range of occupations not requiring work permits, such as accredited foreign correspondents, students working in holidays, teachers working for universities and educational centres, and those with residence permits or temporary residence.

Apart from that, “the second you start working here you need a work permit, and a work visa,” says Firestone. He also points out that, “A work permit gives a particular person the right to work in a particular position for a particular company. If you change jobs, even within the same company, you need a new permit,” he cautions.

Obtaining a work permit is a three stage process, according to Reinhardt. Firstly, the company has to obtain consent of the Federal employment service for the need to employ foreigners. Secondly, with that written consent, they have to apply to the Federal Migration Service, a department of the Ministry of Internal Affairs, for a permit to hire foreigners of specified citizenship for specified positions. Once that permit is issued, the employer then can apply for an individual’s work permit.

“The process and documentation required is boring and irrelevant,” says Firestone. “Anyone serious is going to hire a professional to deal with the details.”

For self-employed consultants here, Firestone has this advice: “If they are here for the long-term and sales are less than 15 million rubles a year (half a million US): get residency (meaning apply for a temporary residence permit, which we will be covering in the next issue of Passport Magazine). This can take at least a year unless you are married to a Russian. Then register as an independent entrepreneur, adopt the simplified system of taxation for small businesses and, presto, tax is a flat 6% of turnover”.

“Alternatively, set up a Russian company or a foreign company with an accredited office here. You do not need a work permit to own a company, just to work at one. The straightforward process needs a fair amount of legwork and queuing, which a lawyer will take care of. The process costs between $600 and $1,000 depending on the lawyer’s fees, and will be covered in a future issue of Passport Magazine. Have the company ask for a work permit for you; hire yourself when you get the permit. Takes about six or seven months.”

Working without a permit can mean deportation, precluding your return anytime soon. Although nobody has heard of anyone from a developed country being deported, it is a procedure used against illegal immigrants from Central Asia, usually working on construction sites. “Furthermore, working illegally leaves you open to pressure from employees, employers, suppliers and anyone who is pissed off at you,” says Firestone bluntly. “In a land where people pay the authorities to cause their enemies problems, it’s smart to have your papers in order”.

Update on Medical Tests

The Russian Federal Migration Service in July this year started requiring medical tests for a total of six diseases, including leprosy, tuberculosis and the sexually transmitted diseases syphilis, chlamydia and chancres as one more document required for the work permit process. Foreigners have for some years had to take HIV tests for work permits, and according to individual Russian consulate rules, for one-year multi-entry business visas.

The order was based on a decree signed by then Prime Minister Mikhail Kasyanov on April 2nd, 2003, listing infectious diseases that Russia should prevent from entering its borders. Previously the tests were enforced only on foreigners applying for residency.

Objections from businessmen and business associations led by the American Chamber of Commerce resulted in the migration service lifting a requirement that the only test results acceptable to the authorities are those from specially designated state clinics in Russia. Test results from any clinic that can conduct the tests are now acceptable, according to a number of Moscow agencies which assist foreigners with work permits.

A Moscow-based lawyer that processes work permits for clients commented that under the short-lived rules: ”Besides being disgusting, the clinics only work certain days and certain hours, and getting all the tests done can be a matter of a week or so”.

The tests are also applied to applicants for residence permits as well as those in the final stages of applying for a work permit.

As Passport goes to press, the medical tests requirement is still in force, but the American Chamber of Commerce said the Prime Minister Mikhail Fradkov has ordered the Interior, Justice, and Health and Social Development ministries to review the rules and deliver a report.

There is optimism that the rules will have been amended by the time you read this.

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