Mayor Lowers Foreign Worker Quotas

This is a potentially significant development as, in general, all companies operating in Moscow may only hire foreign national employees (ie, anyone who is not a Russian citizen) with the prior permission of the migration authorities. A company's ability to obtain this permission and the resulting work permit will partly depend on whether the quota of foreign national workers in Moscow has already been reached.

The requirement that foreign nationals be hired with the prior permission of the migration authorities and on the basis of work permits was first introduced on December 16 1993 by Presidential Decree 2146. In March of last year, Mayor Luzhkov enacted Mayoral Order 183-RM. This specifically extended the work permit requirement to foreign nationals working at accredited representative offices of foreign companies in Moscow. Prior to the issuance of the order, it had been generally accepted that foreign nationals who worked at accredited representative offices of foreign companies and who were personally accredited did not require work permits. This was because the relevant accrediting authority effectively established its own quotas by limiting the number of foreign nationals that could be hired and receive personal accreditation. However, this has now changed and as a result of Order 183-RM, foreign nationals employed at accredited representative offices in Moscow must have both a personal accreditation and a work permit.

In general, any company that intends to employ foreign national employees in Moscow must first obtain the permission of the Federal Migration Service to hire foreign employees. The Federal Migration Service will review the reasons why the foreign employee is required and determine if it will issue the necessary permission. On the basis of this permission, an employer may then apply to obtain work permits for the foreign employees.

Decree 2146 does exempt Russian companies with foreign investment from obtaining the prior permission of the migration authorities to hire foreign nationals who are classified as highly qualified specialists and who are employed as directors or deputy directors of the company or the head of any of its divisions. Article 18 of Order 183-RM retains this exemption and extends it to apply to foreign nationals working at accredited representative offices in Moscow. As a result, the ability of representative offices to hire foreign nationals would not be affected by the lower quotas, since the prior permission of the Federal Migration Service is not required. The same is true for Russian companies with foreign investment who intend to employ foreign nationals who are highly qualified specialists. However, in both of these cases, an employer would still be required to obtain work permits from the Moscow Migration Service for employees that fall into this exempted category.

Therefore, the extent to which the lowering of the quota may affect companies that operate in Moscow will depend upon (i) whether they intend to employ non-Russian workers who are skilled but do not fall into the class of 'highly-qualified specialists', since in this case, the prior permission of the Federal Migration Service is required; and (ii) how many of these workers they plan to hire, since these are the employees limited by the quota.

For further information on this topic please contact Alla Izmailova or Jean Brough at Baker & McKenzie's Moscow office by telephone (+7 095 230 60 36) or by fax (+7 095 230 60 47) or by e-mail ([email protected] or [email protected]). Alternatively, contact Anya Kruglova at Baker & McKenzie's St Petersburg office by telephone (7 812 325 83 08 ) or by fax (7 812 325 60 13) or by e-mail ([email protected]).