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Mercans offers complete payroll, PEO and HR services in Russia

Russie has a balanced budget policy and has one of the lowest public debt in Europe and the world. The government has adopted 42 state programs across many sectors in an effort to support large infrastructure projects. Many are mega projects which drive the economy, stimulate markets and generate revenue. Russia holds 11th place globally in terms of nominal GDP

Doing Business in Russia

Typically, investors face challenges in choosing among the different legal structures for their business in Russia. Foreign companies will often use LLCs to conduct wholly-owned businesses in Russia. Under Russian law, certain types of activities may require a license or type of permission. However, at present time, travel is not recommended at all due to the security environment and the impact of military conflict with Ukraine.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Russia is straightforward. Choose how your company operates from a range of entity types that suit your individual circumstance.

Banking

Banking Hours: 9:00 am to 5:00 pm from Monday to Friday.

Working Week

The standard working week is from Monday to Friday from 9:00 am - 6:00 pm.

Labor Law

The labor relationship between the employer and employee is governed by the Constitution, the Labor Code, federal laws and other statutory laws. Parties to a labor relationship are not able to contract out of requirements that may be imposed by Russian labor law.

Main Industries

Complete range of mining and extractive industries producing coal, oil, gas, chemicals

GDP Growth

-0.8%

Dates & Numbers

dd/mm/yyyy

Official State Name

the Russian Federation

Population

146 million

Capital

Moscow

Major Languages

Russian

Currency

Russian Ruble (RUB)

Internet Domain

.ru

International Dialing Code

+7

Russia
Moscow, RU
8:44 am, February 9, 2023
-2°C
overcast clouds

Payroll

An employee may be engaged for night work if the working conditions require it but it does require the consent of the employee. If this occurs, the rate of pay must be at least 20 percent greater than the normal hourly rate.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports must be kept for 5 - 7 years

Reports

Employees are entitled to receive paid annual leave of 28 days

Annual Leave

Employees are entitled to receive paid sick leave of 15 days

Sick Leave

Employees are entitled to 20 weeks of paid maternity leave and 5 days of unpaid paternity leave

Maternity & Paternity Leave

Employees must be provided with 14 days notice of the termination of their employment

Employee Termination

There are no provisions mandated by law regarding the 13th month salary

13th month salary

13890 RUB per month

Minimum Wage

Overtime pay is calculated at 1.5x the employee's ordinary rate of pay for the first 2 hours of overtime completed

Overtime

Employers must pay the dismissed employee their average monthly salary

Read more when the employee is looking for a new job but for no longer than two months from the date of termination of employment.

Severance Pay

Tax and Social Security

Taxpayers are subject to Russian income tax as either tax residents or non-residents. There is an old-age insurance pension under a statutory compulsory pension insurance scheme. This social pension is not payable abroad.

Tax

Tax residents are taxed on worldwide income. Non residents are taxed on their Russia-sourced income.

20%

Corporate Income Tax

13%

Personal Income Tax

20%

Sales Tax

20%

VAT

Social Security

Retirement is not necessary. Working pensioners are not required to complete an income test. Pension benefits are financed out of contributions made to the pension insurance scheme.

30%

Social Security Rate

30%

Social Security Rate for Employers

0%

Social Security Rate for Employees

Employment Law

There are new regulations which came into effect in January 2021 which amend applicable legislation significantly, introducing different types of remote and hybrid working arrangements. This allows employers far more flexibility.

Employment Agreement

An employment agreement is typically set out in writing and sets out the basic terms such as duration of employment, employment duties, working hours and more. Should an employee begin working before the written agreement is finalized, the agreement is taken to be concluded.

Working condition

There are new requirements for foreign nationals working in Russia, that is, an obligation to complete fingerprint and photo registration as well as a medical examination. This must be done within 30 days of entry into the country. Failure to do so will mean the duration of the temporary stay will be reduced.

Leaves

In respect of maternity leave, employees are not entitled to pay from their employer but receive a state benefit from the Social Insurance Fund. The employer pays the benefit and reclaims the sum from the Fund.

Employment termination

Employment may be terminated only on grounds that are provided by law. This is set out by the Labor Code. In general, state bodies are not required to be notified of such a dismissal.

14 days

Minimum notice period for terminating an employee

15 days

Total number of public holidays

40

Working hours per week

5 days

Total number of days for Compassionate & Bereavement Leave

Immigration

Foreign nationals are required to have a work permit. The exceptions to the rule is certain CIS nationals and other foreign nationals who have residency permits. Work permits are not always required for employees of suppliers or certain manufacturers. The procedure for a work permit is typically lengthy and consists of a few stages and may take up to four months in total. Permits are issued for a period of one year.

Residency permits

An individual work visa must be obtained. Separately, companies are required to report the number of foreign employees they believe they will engage in the coming year. There are also available work permits for HQS (highly qualified specialists), which is supported by a simplified procedure.

Work Permit Validity

3 years

Required Documents

A color passport photo

A passport or other valid identification document

Copies of relevant certificates of the individual’s qualification

A medical certificate that indicates that the individual suffers no disease

A receipt for the payment of all relevant fees

Compliant, reliable, error-free and touchless payroll in Russia

Build the best team and hire top talent compliantly in Russia. Get in touch with Russia payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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