Doing Business in Russia
Doing Business in Russia
9
related to various sectors of the
economy and international trade:
Import duties on certain products
have been lowered, while import
duties on computers, components
for manufacturing computers and
hardware components must be
removed within three years;
Foreign insurance companies will be
permitted to open branches in Russia
after the transition period;
- Technical regulations will be
simplified and developed based on
international standards;
A transition period is provided that
will allow investors in the Kaliningrad
and Magadan special economic
zones to continue to receive tax
breaks;
There will be a transition period
lasting until 1 July 2018, during
which current industrial assembly
regulations will be in force;
Russia will guarantee a certain level
of transparency concerning foreign-
trade legislation;
State subsidies to the agricultural
sector will be USD9 billion per year in
2012. Subsequently, state subsidies
will decrease yearly.
Distributorship contract
A FLE has the right to conclude a
distributorship contract with a Russian
company, allowing the Russian
company to sell the FLE's goods in
Russia. If one of these agreements
is signed, then the FLE shall not be
taxed in Russia. The Russian distributor
shall be responsible for clearing the
imported goods through customs and
paying customs duties and import VAT.
Distributorship contracts are seen as
"vertical agreements" from an antitrust
law perspective and must comply with
antitrust regulations.
Representative office or branch
A FLE can choose to establish a presence
in Russia through a representative office
(RO) or branch. A RO or branch is not a
Russian legal entity, but part of the FLE,
and therefore the foreign head office
bears full responsibility for the obligations
and actions of the RO or branch. An
RO is authorised to conduct certain
"preparatory and auxiliary" activities for
the head office. A branch, on the other
hand, is able to conduct all activities that
the head office can perform, including
the signing of sales contracts. However,
the Russian customs authorities often try
to identify the final Russian buyers of the
goods being imported, and can question
the right an FLE's branch has to declare
goods for customs clearance. As a result,
it can be difficult for a Russian branch to
clear goods through customs.
ROS and branches are registered via
accreditation from the Federal Tax
Service of Russia, which has been
Perm
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