СGoldТ Card for СGoldТ Foreigners

Gennady Odarich
Director, Legal Services
PricewaterhouseCoopers

From July 1, 2010, the amendments to Federal Law No. 115-FZ concerning the legal status of foreign citizens in the Russian Federation will come into force. These amendments will significantly simplify the procedure for obtaining work permits for highly skilled foreign specialists. This issue has become a hot topic in the mass media from daily newspapers to a popular television talk show. The discussion about these new amendments has even attracted the attention of the participants of the St. Petersburg Economic Forum. Some have even called the new procedure a “gold card,” comparing it to the green card in the United States.

Who are these foreigners that can be called highly skilled foreign specialists? The only criterion is a locally paid salary. If the salary is more than 2 million rubles ($64,000) per year, then the foreign national is considered a highly skilled specialist and can enjoy a simplified procedure for obtaining a work permit. The important thing is that the title of “specialist” is to be defined by the employer on the basis of the criteria recommended by the above law, such as work experience. Therefore, the new law frees the employer from having to give confirmation to the immigration authorities about the qualification of the foreign national to be employed. For instance, there is no need any more to submit an apostilled diploma to the authorities. The good news is also that the law stipulates that work permits should be issued within 14 days of the application being filed. It is obvious that it may become necessary to add to this term the period for obtaining a work visa, but even in this case, the period for obtaining the work permit and work visa will be less than the three months it is now. †

Additionally, employers are freed from the quota process for these foreign nationals, which will allow the employer to attract foreign nationals more quickly, depending on the concrete conditions of their operations in Russia. When entering into a contract, the employer can almost immediately start fulfilling its provisions with the attracted skilled foreign personnel.

The lawmakers have also given employers the possibility to request a work permit for several regions of Russia where the highly skilled foreign personnel are intended to work. Therefore, the employers will not need to struggle with getting a work permit for each region when it is required.

Undoubtedly, one of the main innovations of the above law is that the personal income tax rate for the highly skilled foreign employees will be 13 percent, the same as for Russian nationals, from the very first day of their work in Russia. This is dependent, of course, on the due receipt of the work permit under the new procedure.

Moreover, in contrast to the current procedure, which does not define the procedure for extending work permits, the work permits for highly skilled foreigners can be extended an unlimited number of times. Taking into account that the work permits for highly skilled foreigners are supposed to be issued for three years, and provided that those permits are extended in time, employers are spared the hassle of applying for work permits on a yearly basis. Under the current rules, employers are in the process of obtaining work permits for foreign employees on an almost uninterrupted basis, needing to start a new process almost immediately after the previous one is completed.

Although the new procedure for highly skilled foreigners is very attractive, it is applicable only for those expatriates who fall under the category of highly skilled specialists and, as such, the procedure for other expatriates who do not meet the requirements for highly skilled specialists will remain the same as it is now, and will be in force in parallel with the new procedure.

One of the big innovations provided by the law is the exemption for representative offices accredited in Russia from obtaining the work authorization documents for expatriates working for accredited representative offices. A representative office is one that holds accreditation cards from the respective government agencies, namely the State Registration Chamber and the Chamber of Commerce. However, this approach will be applicable only to the representative offices created from those jurisdictions where the same rules are applied for the representative offices of Russian companies, that is, on the basis of reciprocity, which may significantly reduce the number of representative offices that could be exempted from the work permit process.