russian business law – what to expect in 2015
TRANSCRIPT
BUSINESS LAW – WHAT TO EXPECT IN 2015
St. Petersburg / TaXmas Seminar 2014 / Pavel AntonovHouse of Finland
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IMPORTANT CHANGES IN THE RUSSIAN LEGISLATION TO FOLLOW IN 2015:
Amendments to Civil Code on legal entities and corporate proceduresNew provisions on Branch and Representative Offices of foreign companies
Employment issues, new legal requirements on foreign employees in Russia
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- Closed list of non-commercial legal entities is set- Legal status of Associations and Unions is set- Majority Participant bears responsibility for damages caused
to legal entity- Decision on legal entity reorganization may be acknowledged
invalid, the reorganization itself – failed
Amendments to Civil Code as of September 01, 2014 (by the Federal Law of 05.05.2014 N 99-FZ)
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- No need to specify full legal address of legal entity, new Branch and Representative Offices of legal entity in Articles of Association (except for obligatory registration at Unified State Register of Legal Entities - “USRLE”)
- Articles of Association the only constituent document of any legal entity
Amendments to Civil Code as of September 01, 2014 (by the Federal Law of 05.05.2014 N 99-FZ)
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More than one Director may be appointed in a legal entity
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Notary legalization of Shareholder /Participant’s Minutes is required (exception – Sole Shareholder /
Participant Decision)
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From 1 January 2015 Branch and Representative Offices of
foreign companies to be accredited by new rules
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- New requirements on the Regulations- Deadline for the submission and review of an application for
accreditation+ submitted to the accreditation authority not later than 12 months after the
adoption of the resolution on opening+ accreditation should be performed within 25 business days
- Foreign personnel of Branches and Representative offices+ number of foreign citizens to be employed should be approved by the
Chamber of Commerce and Industry (“CCI”) prior to the filing
- State Register of Branches and Representative offices to be established+ Register to contain main information on accredited Branches and
Representative offices+ to be freely available in the public domain – more transparent for
counterparties
- Accreditation term - no longer any limits stipulated
Federal Law No. 106-FZ of 5 May 2014 “On the Introduction of Amendments to Individual Legislative Acts of the Russian Federation” will enter into force on 1 January 2015.
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- Accreditation may be terminated by the decision of foreign legal entity, or competent authority, if during the past 12 months+ failure to submit reporting on taxes and duties+ could not be found / contacted at legal address in Russia+ did not perform transactions on the bank accounts+ activities contravene Russian legislation, endanger sovereignty,
political independence, territorial integrity, or national interests- Transitional period
+ accreditation expires after 1 January 2015 – apply during 30 calendar days before expiration of accreditation to the competent authority for the receipt of new unlimited accreditation
+ accreditation expires from 1 January 2015 to 31 January 2015 - apply to the competent authority for the receipt of new unlimited accreditation during the period from1 February 2015 to 28 February 2015
+ accreditation was until 1 January 2015 and does not expire before 1 April 2015 – file information to the competent authority for inclusion in the Register by 1 April 2015
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set out by Federal law dated 12 March 2014 №35-FZ “On the amendments to the first, second and third parts of the Civil Code of the Russian Federation and certain legal acts of the Russian Federation”
Amendments to Federal Law dated 29 July 2004 №98-FZ “On commercial secret” of October 01, 2014
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- “know-how” (production secrets) is defined as “information which contains real and potential commercial value by virtue of non-public nature” in order to protect rights in case of disclosure
- employee not to disclose confidential information of the employer and its counterparties, without their consent, including this information in his own needs after termination of the employment agreement (also applies to Director)
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Foreign citizens to prove their Russian language skills,
knowledge of history and basics of the legislation of
the Russian Federation
From January 01, 2015
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- Categories of foreign citizens to apply for+ a temporary residence permit+ a permanent residence permit (vid na zhitelstvo)+ a work permit, or a patent
- Documents to prove the skills+ a certificate issued by an authorized organization+ a state document on education (not less than the basic general
education), issued by the educational institution in the territory of the state, which was a part of the USSR, before 1 September 1991)
+ a document on education and (or) the qualification issued to persons who have successfully passed the state final attestation in the territory of the Russian Federation starting from September 1, 1991
Amendment of Federal Law 115-FZ dated 25.07.2002 On Legal Status of the Foreign Citizens in the Russian Federation by Article 15.1.
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- Foreign citizens arriving in Russia on the basis of a visa and obtaining a work permit after January 1, 2015 - submit their knowledge confirmation documents to the FMS within 30 calendar days after issuance of the work permit. Otherwise, the work permit will be annulled
- Foreign citizens whose permanent residence permit (vid na zhitelstvo) or work permit was issued before 1 January 2015 – to submit their knowledge document when applying for the renewal of a previously issued permanent residence permit (vid na zhitelstvo) or a work permit
- Certificate confirming the knowledge to be issued by educational institutions in Russia or abroad that are included in the list of educational organizations conducting an examination in Russian as a foreign language, the history of Russia and the basics of the legislation of the Russian Federation
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- Confirmation of knowledge on applying for a work permit is not needed for:+ highly qualified specialists+ journalists working for media specifically for the distribution
of information in foreign languages+ students studying full-time in Russia at institutions of
professional or higher education
- Confirmation of knowledge on applying for a temporary or permanent residence permit (vid na zhitelstvo) is not needed for:+ those incapable or limited in capability+ those under 18 years old+ men aged 65 years and over+ women aged 60 years and over
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+ participants in a State program assisting the voluntary resettlement to the Russian Federation of compatriots living abroad and their family members resettled together in the Russian Federation
+ highly qualified specialists (“HQS”) and members of their families applying for a permanent residence permit (vid na zhitelstvo) on the basis of a HQS work permit.
- According to information from the website of the Russian Test Consortium (http://testcons.ru), starting from November 17, 2014 the School of educational training of migrants RUDN administers a complex examination in Russian language skills and knowledge of Russian history and the basics of the legislation of the Russian Federation
- The website of the Consortium provides information concerning prior training for foreigners
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- The bill approved at the final reading on November 11, 2014 - foreign citizens arriving in the RF on a visa-free basis will have the right to work at legal entities on basis of a patent
- To obtain a patent, a foreigner will have to apply to the FMS within 30 working days from arrival personally or through an authorized representative
- Two documents have been added to the obligatory documents for obtaining a patent:+ voluntary medical insurance policy valid in the territory of the RF for
the period of work+ document confirming Russian language skills and knowledge of
Russian history and the basics of the legislation of the Russian Federation
- A patent will be issued for 1 to 12 months with the possibility of renewing it ONCE for 1 to 12 months.
Employment of visa-free foreign citizens by legal entities on basis of a “patent” (1)
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- These amendments will come into force starting from January 1, 2015
- Work permits issued before January 1, 2015 will be valid until their expiry or annulment.
- Patents issued before January 1, 2015 will be valid until their expiry or annulment, and will confirm the right of the foreigner to perform labor activity for physical persons only. In addition, the term of validity of a patent cannot be prolonged.
Employment of visa-free foreign citizens by legal entities on basis of a “patent” (2)
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- A fixed advance payment (set by regional governments) to obtain the patent by a foreign citizen to be paid; according to preliminary data the amount will be 2000–6000 RUR per every month of work.
- The Law authorizes regional governments to conclude agreements with organizations that will carry out functions around the issue of patents, dactyloscopic registration, testing. Thus, the foreigners could be asked to pay for the services on obtaining a patent - preliminarily up to 7500 RUR.
- A foreign citizen will be obliged to submit their certificate confirming their Russian language skills and knowledge of Russian history and the basics of the legislation of the Russian Federation at these approximate prices:+ Russian language examination - up to 3500 RUR + knowledge of Russian history and the basics of the legislation of Russia -
5000-6000 RUR (preliminary courses not included)+ Total price for obtaining a patent in 2015 might be up to 31000-79000 for 1
year of work excluding all taxes (taxes to be paid by the employer)
Additional expenses for a “patent”
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- From January 1, 2015 employees of Representative Offices could be employed as highly qualified specialists (HQS).
Employment of HQS by Representative Offices of foreign companies(entered by Federal Law № 106 dated May 5, 2014)
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№
Type of state duty
Before January 1, 2015, RUR
Starting from January 1, 2015, RUR
1 For an employment permit 6000 10000
2 For a work permit 2000 3500
3 For an invitation 500 800
4 For issuance or prolongation of a visa for exit from the RF
600 1000
5 For registration of a foreign national at the place of living in the RF (with temporary and permanent residence permits)
200 350
6 For a temporary residence permit 1000 1600
7 For a permanent residence permit (vid na zhitelstvo)
2000 3500
8 For issuance or prolongation of a multiple entry visa
1000 1600
9 For acquisition of nationality in the RF 2000 3500
From January 1, 2015 the amounts of state duties for acquisition of nationality in Russia,
as well as entrance/exit to/from Russia will be changed.
Assessment of working conditions of employees
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- Required to add the information on working conditions to the Labor Contract with employees
- Applies to employees engaged in hazardous work conditions, and office workers
- Information to be included in the Labor Contract only after special assessment of the working conditions of the workplace
- Categories of assessment for office workers:+ optimal – Category 1+ permissible - Category 2
- Categories of assessment for employees employed in manufacturing (in hazardous areas):+ harmful – Category 3+ dangerous – Category 4
Amendments to Labor Code by the Federal Law of 23.12.2013 № 426-FZ "On the special assessment of working conditions"
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- a warning or administrative fine on the Management (General Director) in the amount of 1 000-5 000 RUB (repeated violations –10 000-20 000 RUB, or disqualification for a period of 1-3 years)
- for legal entities – penalties of 30 000-50 000 RUB (repeated violations –50 000- 70 000 RUB)
Penalties for employers for not including provisions on working conditions (under Point 5.27 of the Administrative Code coming into force on 22.01.2015)
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- to be conducted by specialized certified companies during 90 working days at the employer’s office
- the assessment to be carried out within 6 months after the job is created
- term of validity – 5 years
On January 1, 2014, workplace certification was cancelled - special assessment of working conditions adopted
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- For initially harmful and dangerous workplaces of Category 3 or 4 in the production sector, special assessment of the working conditions is required before concluding a Labor Contract with employees
- If the employer has previously held a certification of workplaces, the special assessment of working conditions is not required until the end of the validity of the previous certification of workplaces - 5 years
- Guarantees for employees+ no guarantees for Category 1 and 2+ Category 3 and 4 - additional vacation, reduced working
day, etc.
On January 1, 2014, workplace certification was cancelled - special assessment of working conditions adopted
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- Amendments from January 01, 2015 to the Code of Administrative Offences of the Russian Federation (Article 5.27.1.) introduce increased penalties for violation of the evaluation procedure by the employer from January 22, 2015+ a warning or administrative fine on the Management
(General Director) of 5 000-10 000 RUB (repeated violations – 30 000-40 000 RUB, or disqualification for a period of 1-3 years)
+ for legal entities – 60 000-80 000 RUB (repeated violations – 100 000- 200 000 RUB)
Responsibility of employers for not conducting a special assessment of working conditions
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- Federal Law dd 21.07.2014 N 242-FZ will enter into force on September 1, 2016.
- The regulatory agency on personal data protection (Roscomnadzor) having received court decision will be able to block the company’s web page unless a company complies with the new law. This authority will register entries in a special registrar of violators.
- General administrative code penalties for violation of legislation on personal data.
Servers should be in the territory of Russia for processing of Personal Data
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Impact of mutual sanctions on existing and new contracts- Criteria for declaring certain circumstances to be force
majeure with regard to existing and new agreements- Anti-sanctions clauses in commercial contracts.
MUTUAL SANCTIONS. Force-majeure. Commercial risks. New clauses in contracts.
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Thank you!
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www.accountor.ru
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