Legal update for diplomatic missions in Russia

Increased quotas for issuing foreign citizens work permits and invitations to enter Russia for employment purposes for a number of Russian regions in 2021

Order of the Ministry of Labour and Social Protection of the Russian Federation No. 54n dated 9 February 2021 “On amendments to annexes No. 1-3 to the order of the Ministry of Labour and Social Protection of the Russian Federation No. 878n dated 10 December 2020 “On the distribution of quotas approved by the government of the Russian Federation for 2021 for issuing foreign citizens arriving in the Russian Federation on the basis of a visa work permits and invitations to enter the Russian Federation for employment purposes”

Amendments to simplify the procedure for approving foreign investment in certain business entities of strategic importance

The law on the procedure for foreign investment in strategic companies in defence and security has been amended. The amendments allow organisations under the control of foreign states to acquire control over the following types of strategic companies:

• companies that perform work using infectious agents, except for manufacturers of medicines (for example, poultry farms, laboratories);
• companies that are included in the register of subjects of natural monopolies in water disposal facilities and water supply (for example, enterprises of metallurgical, industrial woodworking and agricultural enterprises).

These types of activities should not be the main activities of the companies, and the value of the property used in performing these activities should not exceed 1% of the book value of assets according to the accounting statements of the relevant company for the last three years.

A simplified transaction approval procedure has also been introduced for the abovementioned types of strategic companies, when the foreign investor is not under the control of a foreign state or international organisation, and is not a company that did not disclose information on its beneficiaries to the antimonopoly authority (FAS). Now such transactions can be approved by the FAS without the need for the government commission to consider the transaction, as previously required.

In addition, the law is supplemented with a list of obligations that can be imposed on a foreign investor by the government commission when approving a transaction. For example, the following obligations, among others, may be imposed on investor:

• ensuring that the strategic company continues to carry out its strategic activities after the transaction is completed;
• ensuring that after the transaction, the strategic company retains the previous volume of production and sales of products.

Federal Law No. 40-FZ dated 9 March 2021 “On amendments to the Federal law “On the procedure for making foreign investments in business entities of strategic importance for ensuring national defence and state security”

Ratification of a protocol on the amendment of the Russia-Malta tax treaty

A protocol on amendments to the Convention between Malta and Russia on the avoidance of double taxation and on the prevention of tax evasion with respect to income tax has been ratified.

The document establishes a regime of taxation at the source of income in the form of dividends and interest at a rate of no more than 15% with certain exceptions.

Federal Law No. 32-FZ dated 9 March 2021 “On the ratification of the Protocol amending the convention between the government of the Russian Federation and the government of Malta on the avoidance of double taxation and on the prevention of tax evasion with respect to income tax dated 24 April 2013”

Changes to the procedure for accrediting branches and representative offices of foreign legal entities

Changes have been made to the accreditation procedure for branches and representative offices of foreign legal entities, aimed in part at reducing the amount of refusals for accreditation, namely:

• the accreditation period has been reduced from 25 to 15 working days (with the exception of representative offices of foreign organisations in the field of civil aviation);
• the procedure for suspending the accreditation procedure, the procedure for making changes to the information contained in the register, or the procedure of terminating the accreditation of a branch or representative office of a foreign legal entity for a period of up to 15 working days has been introduced to eliminate inconsistencies or errors in documents identified by the applicant;
• the list of grounds for refusing to grant accreditation has been clarified.

The law enters into force on 24 August 2021.

Federal Law No. 27-FZ dated 24 February 2021 “On amendments to Article 21 of the Federal Law “On foreign investment in the Russian Federation”

New procedure for issuing temporary identity cards to stateless persons

Temporary identity cards, which will be issued to stateless persons for a period of 10 years to confirm his/her identity and temporary stay in the Russian Federation, are being introduced. A person who has a temporary identity card of a stateless person in the Russian Federation may be issued a temporary residence permit without taking into account the government quotas. In addition, such persons will be able to work in the Russian Federation without obtaining a work permit or patent.

A stateless person obtaining a temporary identity card is a ground for cancelling a number of administrative procedures and decisions (eg, on administrative deportation from the Russian Federation, on the undesirability of stay (residence) in the Russian Federation, etc).

Federal law No. 22-FZ dated 24 February 2021 “On amendments to the Federal law “On the legal status of foreign citizens in the Russian Federation” and certain legislative acts of the Russian Federation regulating the legal status of stateless persons”

Adoption by the Russian Federation of the Charter of the International Organisation for Migration dated 19 October 1953

The International Organisation for Migration (IOM) is an intergovernmental organisation associated with the United Nations, with a general coordinating role on migration issues. After the adoption of the Charter, the Russian Federation becomes a full member state of the IOM.

Federal Law No. 60-FZ dated 5 April 2021 “On the adoption by the Russian Federation of the Charter of the International Organisation for Migration”