Moscow News
http://www.mnweekly.ru/
February 8, 2008
Navigating Russia's New Visa Rules
By C. Anne Shupe
Approximately three months have passed since Prime Minister Viktor Zubkov announced a decree on tougher regulations for business visas to Russia. In statements to the press in November, the FMS, insisting on the principal of reciprocity, asserted that the new guidelines and restrictions reflected visa and immigration regimes in Western countries. Tighter limitations on business visas to Russia may serve as a first step in national immigration reform and ensure that foreigners are paying taxes in the country. This week we spoke to various parties affected by the changed conditions in order to better understand the repercussions for the business community, in particular for expatriates living or seeking work in Russia.
Helen Kurkjian, an actress and singer from Germany, presents a typical case. Like many foreigners in Moscow - employed somewhere within the grey zone of freelance work without an actual permit - Helen performs with her band, "Gastarbajterka" at various functions around the city.
"It really takes a while to make yourself known in a new city," she said. "You can't just come to Moscow and hope to make enough money to make ends meet." For that reason, freelance work on a business visa seemed a perfect solution. In order to secure a stable income on the side, she could do anything from organizing events at a non-profit foundation, to teaching private language lessons, producing audio books or performing at theaters around town. Now, this has all changed. Unable to find a work permit sponsor, she is returning to Germany, at least for the time being.
Many private language schools in Moscow rely on foreign workers like Helen to be able to offer courses from native speakers. They have also been hit hard by the new stipulations. One recruiter for a Moscow Language school told The Moscow News: "Of course, we benefit from foreign workers who already live in Moscow and do not require visa support from us. It makes the process much less expensive and a great deal quicker." She also explained that the deficit of experienced native-speaking language teachers in Moscow makes it difficult to meet the high demand for classes in Business English.
Language schools are not alone; Ksenia Bortnik, a spokesperson for the Association of European Businesses (AEB), told The Moscow News that "many corporations have relied on the possibility to have their key personnel in Russia on the back of a business visa and now they have to rethink their whole migration strategy."
Finding an employer willing to sponsor a foreign worker is no easy task. Foreigners carry with them an expensive tax disadvantage for the company. Bortnik explained, "business travelers will not be able to meet the rule of being present in Russia for at least 183 days during a 12-month-period (a prerequisite for being considered a tax resident of Russia). The regular income of a tax resident is taxed at 13 percent while non-residents are taxed at 30 percent.
Dr. Taneli Lahti, Head of the Political Section of the Delegation of the European Commission to Russia here in Moscow, commented on the rather unexpected "practical change" which began last October and is already affecting the lives of numerous expats. Although the type of freelance work that many foreigners became used to in the past was actually already illegal then, he stated that "the authorities tolerated it before, but now that is changing." While many European citizens engaged in business activities in Russia were unprepared for the sudden adjustment, Dr. Lahti reported, "Both the Russian and European side are actively discussing how to work out any problems or confusion that currently exist due to the new stipulations and are interested in solving these concerns from their citizens."
According to Dr. Lahti, changes for the business visa have forced European businessmen and women to start applying for a work visa, or temporary or long-term residence permits. He explained that, unlike large, established foreign businesses in the country, which will not see much impact, small and medium-sized companies often lack necessary resources to deal with an additional inconvenience. These smaller businesses see themselves confronted with an "a cumbersome administrative challenge" as the process by which a registered - foreign or Russian - company may obtain a quota for foreign work permits remains quite bureaucratic.
Asked about the application process for working visas and permits, Ms. Bortnik from AEB responded, "According to our experience, the process takes as long as two months even if the company would be ready to comply with all prerequisites. In our practice we have not encountered refusal on work permit applications, but as Russia develops in line with the European standards it is to be expected that the refusals will also reach European standards."