Doing Business in Russia
22 Doing Business in Russia
For the purposes of calculating taxes,
levies, penalties, liabilities under civil
transactions, etc, the relevant minimum
statutory monthly salary of RUB 100 is
applied.
Currency and form of salary payment
Direct salary payment to employees
in Russia in a foreign currency is
prohibited.
In Russia, salaries are normally paid in
roubles. However, in accordance with
collective agreements or employment
contracts signed upon the written
request of an employee, workers can
be remunerated in other forms as
long as they do not contradict Russian
legislation or international treaties to
which Russia is party. The percentage
of remuneration made in non-monetary
form cannot exceed 20% of an
employee's total salary.
Severance payments
The Labour Code requires severance
pay to equal at least two-week's
average earnings when an employment
contract is terminated due to the
following reasons:
-
-
The drafting or enlisting of an
employee into military or alternative
civil service;
The refusal of an employee to be
transferred to work in another
location should the enterprise,
institution or organisation relocate;
An employee is unable to work
pursuant to a medical certificate
issued in accordance with legislation;
Refusal to continue work due to
a unilateral change to the labour
agreement conditions made by
the employer (such changes
are only possible in exceptional
circumstances);
An employee who previously held
the position is being reinstated after
a period of leave (i.e. maternity leave
comes to an end);
Refusal of an employee to find a
new job should the relevant medical
authorities prescribe this course of
action for the employee, or if the
employer is not able to offer relevant
work.
If an enterprise, institution, or
organisation is dissolved, or if there
need to be staffing cuts, then a one-off
payment of monthly average earnings
is required. Additional payments are
required if the dismissed employee is
unable to find work, but no more than
two months' worth of payments (three
months subject to specific conditions).
Work permits for foreign
nationals
As a general rule, foreign nationals
working in Russia are required to have a
work permit. There are a few exceptions
to this rule, mainly related to certain CIS
nationals and other foreign nationals
who possess residency permits. Work
permits are not always required for the
employees of suppliers or manufacturers
of equipment imported into Russia for
the purpose of installing, supervising
the installation of, or servicing the
equipment.
The standard work permit application
process is quite a lengthy and
burdensome procedure consisting of
several stages. Each stage involves the
submission of applications together with
an extensive list of documents.
The stages include:
-
Registration with the local
employment authorities;
Submission of a notification to the
Employment Service stating that
there are vacancies in the company for
which only the employment of foreign
citizens will satisfy. The Authorities
must reach a conclusion that this is
correct;
- Application for a corporate permit
from the immigration authorities to
engage foreign labour;
- Application to the immigration
authorities for each expatriate's
individual Work Permit.
Typically it takes more than
four months to obtain an
individual work permit.
The individual permit is issued for a
period of up to one year.
Perm
KPMG
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