Few aspects of Russian law affect foreign investors so viscerally as the visa and immigration rules. For that reason, recent developments in the visa, immigration and registration rules and procedures should be especially welcomed, both by foreign businesses and Russian businesses that employ foreigners.
Amendments to Russia’s immigration laws (the “March Amendments”) came into force on March 25, 2011.1 The March Amendments follow substantial criticism from the foreign business community of the legislative amendments to Russia’s immigration laws of December 23, 2010 (the “December Amendments”), which shifted the burden of registering foreign nationals onto residential landlords and away from employers.2
The March Amendments restored the previous registration regime, and now both employers and landlords will be entitled to register foreign nationals. This has avoided the potential nightmare situation affecting foreign nationals who rent property from private landlords in Russia who are unwilling to take on the extra responsibility of registering their tenants’ travel to, from and within Russia.
However, the December Amendments also set out important details about the new highly qualified foreign professional visa regime, which was not revised by the March Amendments. The new visa regime was introduced in the summer of 2010, as part of Russia’s modernization agenda, and we analyzed it in detail in our Third Quarter 2010 edition of Russian Legal Update. Further guidelines on what constitutes a “highly qualified foreign professional,” how employers must notify immigration authorities about such professionals, and what benefits the family members of such professionals can receive, were set out in the December Amendments and remain in place.
Employers Now Once Again Able to Register Foreign Nationals
The March Amendments provide that employers can still register foreign nationals and report their travels to, from and within Russia, after the December Amendments had previously provided that only landlords could perform these registration formalities. The December Amendments came into force on February 15, 2011, but in practice most foreign nationals had continued to be registered by their employers. This is because the Federal Migration Service had not been enforcing the December Amendments, as it soon realized that the changes would need to be revisited.
In practical terms, the December Amendments would have caused a number of problems for foreign nationals whose landlords, for a variety of reasons, were unable or unwilling to perform such registration formalities, especially on a frequent basis (e.g., for regular business travelers or expats with families remaining in their home countries). Many landlords are individuals who lack experience with immigration formalities and who are reluctant to get involved with a state agency or live far away from where the property is rented. As a result, many foreign nationals would have been forced to move to new residential rental accommodation to ensure compliance with Russian law. Even where foreign nationals rented properties from professional property management companies, the extra responsibility on those companies to register their tenants would very likely have led to increased rental rates or other fees. Although potential workarounds had been identified, including using a power of attorney executed by a landlord in favor of the employer, to allow the employer to retain the registration responsibilities, these workarounds would have been costly and inconvenient.
Extension of Registration Deadlines
A further positive development in the March Amendments is that the period of time after which foreign nationals are required to be registered upon their arrival into Russia has been increased from three days to seven days. This eases the burden on HR departments who are keen to avoid late penalty fines. Although in practice many foreign nationals visiting Russia are registered by their hotels, this will benefit those foreign nationals who visit Russia and stay with friends and relatives, or rent accommodation for frequent visits. In many cases, a time-consuming visit to the local registration office will no longer be necessary.
Further Details of the Highly Skilled Foreign Professional Regime Emerge
Turning to the highly skilled foreign professional regime, the December Amendments preserved the position that foreign citizens who earn more than RUB 2 million (approximately USD 70,000) per annum, provided that they have a basic level of professional qualifications, skill or experience, are eligible for the new regime. However, for the first time, teachers and scientists working in accredited institutions are also eligible for the regime provided that their annual salary is above RUB 1 million (approximately USD 35,000) per annum. A further exemption has been provided to those foreign nationals who will work at the Skolkovo Innovation Project, who will qualify for the new regime without any salary threshold. Reporting requirements have also been put in place for employers of highly skilled foreign professionals. In particular, every quarter, the employers of highly skilled foreign professionals must provide details of the employees’ total salary and any terminations of employment or extended absences from employment of over one month to the Federal Migration Service.
Among the greater benefits afforded to highly skilled foreign professionals, prominent is the benefit that family members (spouse, children, parents, grandchildren, grandparents or the spouses of any children or parents), are now also entitled to be issued with residence permits and work visas for the same time period as the professional to whom they are related. Another benefit is a relaxed registration procedure under the regime, for travel both within and outside of Russia.
A new provision that will benefit employees, but may add costs for employers, is that it is now mandatory to provide medical insurance or other similar medical benefits to highly qualified foreign professionals (and their family members living in Russia) under the regime.
Russia Keen to Attract Highly Qualified Foreign Nationals
There has been recent press speculation that Russia may cancel visa requirements for foreign nationals of the EU and the U.S. in the near future. Unfortunately, the changes are indeed still in the realm of speculation, but it is clear that Russia is keen to attract more foreign talent and investment, whether from business persons, scientists, teachers, other professionals or tourists, and Russian law is finally beginning to reflect this policy.