The Russian government recently toughened immigration rules in order to protect their own Russian work force (and to stabilize unemployment) with the aim to continue to push foreign investors to hire Russian workers instead of expats. Very often the authorities are treading a fine line between encouraging foreign investment in Russia and ensuring that Russian workers receive priority in the employment market. However, they also have a propensity to enact regulations on the fly, often based on what is popular with the Russian electorate at the time. All of this means that employers in Russia routinely face difficulties in obtaining the correct permits for their foreign workers to legally live and work in Russia.

Annually, before May 1 annually employers must submit a quota to their relevant regional authorities (where the company is based) of the exact number of expatriates they plan to employ in the next year in order to be able to obtain work permits for those foreign personnel. Notification for year 2010, for instance, had to be submitted before May 1 2009, and it is applicable even to those registering their business in Russia after May 1. If a company fails to apply for their quota of expats before the deadline, it is nearly impossible to later obtain the necessary work authorization documents during that coming year. In addition to this, the authorities in these regions set a maximum number of foreign workers allowed for that year.

There is a possibility to apply for a change in an organizations stated quota. For example, to change the quota for 2010 after May 1, 2009, the application would need to be submitted before May 1, 2010, but a decision by the Russian government would be expected in September 2010 only.

These rules, and their arbitrary enforcement, often create problems for companies in Russia. In May 2008, when the Moscow region’s annual quota limit for 2008 of 1.8 million was met, the Russian Federal Migration Service stopped issuing work permits for all expats at all companies regardless of their positions. The suspension caused a ripple effect across organizations, which feared a negative impact on their sensitive projects that were already in progress. Subsequently, in order to advance and support foreign investment in Russia, the Ministry of Public Health and Social Development released a list of occupations that were to be exempt from the quotas. The list consisted of 22 specific professions, including general directors of joint-stock companies, associations, and other enterprises; directors, heads or administrators of factories, representative offices, manufacturers, companies, and associations; engineers of data security, automated industrial and management systems; Information Technology department heads; microbiological engineers; biochemists; and biophysicists. The authorities were keen to stress at the time (and it is still the case), that the list did not in any way define exception to immigration procedures or a guaranteed work permit, and employers were still required to show that no Russian national could fulfill the requirements and duties of given position. The list of exempt professions for 2009 is also available elsewhere on our blog.

In this often confusing environment, many organizations are unknowingly in violation of Russian law due to misinterpretation of Russian legislation.  For example, many accredited representative offices of legal foreign entities in Russia erroneously believe that Russian immigration law provides exceptions for their companies, making work permits unnecessary for foreign employees of representative offices. While the State Registration Chamber and other accrediting bodies facilitate the issuance of work visas for officially accredited foreign employees, representative offices of foreign legal entities in Russia are still required to obtain work permits for their foreign employees.

Failure to obtain necessary work authorization documents, if discovered, will lead to severe penalties, with both the employer and employee in question subject to fines. Penalty charges are up to RUR 800,000 (approx USD 25,000) for the employer, RUR 50,000 (approx. USD 1,500) for the in-house employee responsible for expatriates, and, for the expat in violation, RUR 5,000 (approx. USD 150) and possible deportation from Russia with a further ban on reentry to Russia for five years.

To avoid inconvenience and disruption, it is highly recommended that all businesses ensure compliance with Russian immigration laws. Move One can assist organizations moving foreign workers in and out of Russia with immigration and employment regulation compliance.

General Inquiries regarding immigration matters in Russia and other Move One locations please send to relo@moveonerelo.com or call +36 1 266 0181.

John Heisler is Move One’s Russia and central Asia manager. He can be contacted for more details by email at john.heisler@moveonerelo.com or telephone +7 495 926 0164 (GMT +3)

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