Market Entry Guide Russia.
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- Introduction
- Modes of Setting up a Business in Russia
- Procedures for Immigration and Travel to Russia
- Social Security System in Russia
- Free Zones in Russia
- Opening a Bank Account in Russia
- Recruitment of Local Staff
- Taxation
- Appendix
Appendix I: Useful Links and Addresses
Appendix II: Average Living Costs for Expatriates
- Disclaimer
1 Introduction
Download PDF
- Introduction
- Modes of Setting up a Business in Russia
- Procedures for Immigration and Travel to Russia
- Social Security System in Russia
- Free Zones in Russia
- Opening a Bank Account in Russia
- Recruitment of Local Staff
- Taxation
- Appendix
Appendix I: Useful Links and Addresses
Appendix II: Average Living Costs for Expatriates - Disclaimer
1 Introduction
The Russian Federation had successfully managed to recover from the economic crisis that had threatened the country in 1998. Since then, the average growth rate of its GDP had been about 7 percent until the recent crisis. In 2008, Russia’s GDP was EUR 1.14 trillion (USD 1,671.5 billion)1, registering a year on year growth of 5.6 percent as compared with 8.1 percent in 20072.
The current account balance of the country was estimated to be EUR 71.3 billion (USD 97.6 billion) in 2008. Its exports and imports were EUR 251.5 billion (USD 368 billion) and EUR 175.0 billion (USD 256 billion), respectively, in 2008. The country primarily exported petroleum and petroleum products, natural gas, wood and wood products, metals and chemicals. Its major export markets were the EU, Commonwealth of Independent States (CIS), China and Japan. It primarily imported machinery and equipment, chemicals, consumer goods, medicines, meat, sugar and semi-finished metal products. The EU, Newly Independent States (NIS) [such as Armenia, Azerbaijan, Belarus, and Estonia], Japan, China and the US were its major import partners3.
The EU accounted for 52.3 percent of Russia’s trade in 2008 and is one of the important investors in the country. During 2008, its primary imports from Russia included energy and mineral fuels products (68.2 percent), manufactured goods chemicals and raw materials, while major imports into the country were machinery and transport equipment, manufactured goods, food and live animals. EU’s exports to Russia accounted for EUR 105 billion, while its imports were valued at EUR 173.2 billion4.
In 2008, the total foreign investment in Russia stood at EUR 70.9 billion (USD 103.8 billion) down 14.2 percent compared to last year. FDI was about 26 percent of total investments accounting for EUR 18.5 billion (USD 27 billion), other components being loans (72.6 percent of total foreign investments) and portfolio investments (1.4 percent of the total foreign investments). Countries such as Cyprus, the Netherlands, Luxemburg, Britain, Germany and France were the largest investors. A large pie of the foreign capital (amounting to EUR 23.2 billion (USD 33.9 billion)) was reported to be invested in the country’s processing industry. On the other hand, Russia invested about EUR 78.1 billion (USD
114.3 billion) in foreign countries in 20085.
As per the Strategic Industries Bill, which was under consideration for the last three years, 42 strategic sectors (compared to 16 in 2005) have been identified that require special permission before foreign players can invest in them. If a foreign investor wishes to acquire more than 50 percent stake in one of these sectors, approval from the commission chaired by the Prime Minister is required6.
The following report aims to discuss the most important issues pertaining to the administrative, legal and financial aspects of setting up businesses and hiring personnel, as well as living conditions in Russia.
2 Modes of Setting up a Business in Russia
Legally, foreign investors are allowed to establish fully owned companies in any form, with the exception of unitary enterprises7. They may also register Representative Offices (for auxiliary and preparatory activities) or branch offices (for commercial activities)8.
Table 1 lists the most common modes of setting up businesses by foreign investors and the legal particularities involved in the process.
Table 1: Different Modes of Setting up a Business in Russia
| MODES OF SETING UP A BUSINESS | PARTICULARITIES / LEGAL STATUS |
|---|---|
| Representative Office (RO) |
|
| Branch Office |
|
| Private Joint Stock Company (PJSC) |
|
| Limited Liability Company (LLC) |
Source: VFBS
2.1 Representative Office (RO)
An RO is a subdivision of a foreign company, and therefore, is not considered to be a separate legal entity. It only represents the foreign company’s interests in Russia. It is not officially allowed to undertake commercial activities in the country.
2.1.1 Legal Registration Process
In order to establish an RO in Russia, the foreign investor is required to gain accredation. This can be carried out by several state bodies, such as the State Registration Chamber (GRP), Chamber of Trade and Commerce and various ministries of the Russian government. GRP maintains the Consolidated State Register of ROs and Branch Offices9. Permission to establish ROs is issued for a period of one to three years. Further, the RO should be registered with tax authorities, the State Committee for Statistics and three other non-budgetary funds: the Pension Fund, Obligatory
Medical Insurance Fund and Social Security Fund10.
Table 2 depicts the stages in the accreditation process of setting up an RO along with the costs involved in this procedure.
Table 2: Stages of Accreditation and Registration of ROs in Russia
| STAGE | TIME TO COMPLETE | COSTS |
|---|---|---|
| 1. Accreditation with the relevant authority | Regular procedure: 14–21 working days | Accreditation charges of GRP: For 1 year –EUR 734.2 For 2 years –EUR 1,468.4 For 3 years –EUR 1,835.5 |
| Urgent procedure: 3–5 days | Additional fee of EUR 367.1 | |
| 2. Producing the seal | 2–5 working days | |
| 3. Registration with the State Committee for Statistics | 2–5 working days | |
| 4. Registration with the State Tax Inspectorate | 5–7 working days | |
| 5. Registration with the non-budgetary funds | Done by the Tax Inspectorate | Free of charge |
| 6. Obtaining a registration card (only for foreign citizens working permanently in RO) | Granted after the completion of the registration | Free of charge |
| 6. Opening a bank account | depends on the bank | Free of charge |
Source: VFBS
2.1.2 Documents Required
The following documents, legally translated and notarised, should be submitted to the accreditation and registration bodies in order to register an RO11.
Application for permission to open a representative office of the foreign legal body in the Russian Federation (on an authorised form of the foreign legal body, signed by its director and marked with the company seal, indicating the name, date of formation, location, type of activity of the foreign legal body, purposes of opening a representation in Russia, and information about its business cooperation with Russian partners and its future course of development)
Certificate of registration of the foreign legal body or extract from a trade (or bank) register (the document is valid for 6 months from the date of issuance)
Memorandum of the foreign legal body; in the absence of such a memorandum, a similar document issued by the authorised body of the state of registration confirming this statute is to be submitted
Document stating the decision of the foreign legal body to open an RO in the Russian Federation
Certificate of the bank account and the financial solvency of the foreign company (the document is valid for 6 months from the date of issue)
Power of attorney allotting all necessary powers to the head of the representation in Russia
Notarised power of attorney to an authorised person for managing affairs at the Chamber, issuing permission for opening an RO
Regulations of the RO in the Russian Federation
Certificate issued by the tax body in the country of registration, indicating the tax payment code
Address confirmation of the office in Russia (a letter of guarantee should be submitted with any of the following three enclosures – a note from the Technical Inventory Bureau, a copy of the lease contract or a certificate of property)
At least two references from Russian business partners (signed by their directors and markedwith the companies’ seals)
Two information cards for the RO (issued by the Chamber, signed by the representative of the foreign legal body and ratified by the company seal)
Banking details for opening accounts (account name).
Moreover, in order to obtain a registration card, the following three documents are required12:
Copy of permission for opening an RO representation
Copy of the applicant’s visa and passport pages with basic data
3x4 colour photographs of the applicant (2)
2.1.3 Regulations13
2.1.3.1 Accredited Staff
As a rule, the number of accredited staff should not exceed 5 employees and can be increased only in the case of specific important reasons. The personal information needed for the accreditation card include the name, surname, date of birth, sex, family status, education, place of work and designation during the last three years, the current place of work and designation, the place of residence in Russia, the full name of the RO’s managing director and the number of accredited staff.
2.1.3.2 Authorised Capital
There is no requirement for authorised capital.
2.1.3.3 Management Structure
The foreign legal entity should appoint an executive (Head of RO), pursuant to the power of attorney issued by the foreign legal entity.
2.1.3.4 Tax Compliance
Representative offices that carry out auxiliary and marketing activities should additionally submit reports on their business and potential income along with all reports related to payroll and social taxes. The reports are to be submitted every quarter (with the exception of VAT, which is submitted monthly) to the Territorial Tax Inspectorates, where the company’s offices are registered (in Moscow, the reports are to be submitted to the Inter-district Tax Inspectorate).
2.2 Branch Office
A Branch Office is a subdivision of a foreign legal entity that is allowed to conduct commercial activities, unless prohibited by the Russian law. However, Branch Offices are not considered to be separate legal bodies.
2.3.1 Legal Registration Process
The Branch Office should be first accredited by various state bodies, such as GRP, the Chamber of Trade and Commerce, and various ministries of the Russian government. Following this, a registration procedure is carried out with the tax authorities, the State Committee for Statistics and the three non-budgetary funds (Pension Fund, Obligatory Medical Insurance Fund and Social Security Fund)14. The certificate of accreditation is issued for a period of one to five years15.
Table 3 shows the stages in the accreditation and registration procedures of a Branch Office in Russia and the costs and time taken in the process.
Table 3: Stages of Accreditation and Registration of Branch Offices in Russia
| STAGE | TIME TO COMPLETE16 | COSTS |
|---|---|---|
| 1. Obtaining a certificate of accreditation | Regular procedure: 14–21 working days |
Accreditation charges of GRP For 1 year – EUR 367.1 For 2 years – EUR 734.2 For 3 years – EUR 1,1001.3 For 5 years –EUR 1,468.4 State duty: approximately EUR 1,578.5 |
| 2. Producing the seal | 2–5 working days | |
| 3. Registration at the State Committee for Statistics | 2–5 working days | |
| 4. Registration at the State Tax Inspectorate | 5–7 working days | |
| 5. Registration at non-budgetary funds | By the Tax Inspectorate | |
| 6. Opening a bank account | Depends on the bank |
Source: VFBS; Lenadia
2.2.2 Documents Required
The following documents, legally translated and notarised, should be submitted to the accreditation and registration bodies in order to register a Branch Office17:
Memorandum
Certificate of registration of the foreign legal body or extract from a trade (bank) register
Articles of association or shareholders’ background
Certificate of financial solvency from the bank
Statement of decisions for opening a branch
Power of attorney to the head of the branch
Certificate issued by the tax body in the country of registration with the indication of the taxpayer code
Document of agreement with regional administrations
Expert reports when specified by the Russian legislation
2.3.2 Regulations
2.2.3.1 Authorised Capital
According to federal law, the Branch Office should acquire assets, however the amount is not stipulated.
2.2.3.2 Management Structure
An executive (Head of Branch Office) is to be appointed who should exercise power of attorney issued by the foreign legal entity.
2.2.3.3 Tax Compliance
Tax compliance reports are to be submitted every quarter (with the exception of VAT, which is submitted monthly) to the Territorial Tax Inspectorates where the company’s offices are registered. In Moscow, the reports are to be submitted to the Inter-district Tax Inspectorate.
2.3 Limited Liability Company and Private Joint Stock Company
Both Limited Liability Companies (LLCs) and Private Joint Stock Companies (PJSCs) are considered to be Russian legal entities, and therefore, similar administrative and legal procedures are applicable to both. They are legally allowed to conduct all forms of commercial activity not prohibited by Russian legislation.
2.3.1 Legal Registration Process18
Registration is carried out by the tax authorities, who maintain the United State Register. In addition, LLC and PJSC should be registered with the State Committee for Statistics and with the three non-budgetary funds—the Pension Fund, and Social Security Fund. Registration with the funds is coordinated by the Federal Tax Service. Table 4 maps the sequence of procedures that need to be followed in order to register an LLC or a PJSC in Russia.
Table 4: Stages of Accreditation and Registration of LLCs and PJSCs in Russia
| STAGE | TIME TO COMPLETE16 | COSTS |
|---|---|---|
| 1. Depositing capital in a bank and obtaining a proof | Depending on the bank-client acceptance procedures, 1 working day or longer | Free of charge |
| 2. Registration with the tax authority | 5 working days | Registration duty: Approximately EUR 55.1 |
| 3. Registration at the State Committee for Statistics | 2–5 working days | Approximately EUR 58.7 |
| 4. Making the company's seal | 2–5 working days | |
| 5. Registration at non-budgetary funds (Pension Fund, Social Security Fund and Obligatory Medical Security Fund) | Done by the Tax Inspectorate | Free of charge |
| 6. Opening a bank account | Depends on the bank | Free of charge |
| 7. Registration of the share issue with the Federal Services for Financial Markets Note: This is applicable only for PJSCs | 60 working days | |
| 8. Informing the Ministry of Taxation of the company’s bank account and obtaining a letter of confirmation | 3–7 working days | Free of charge |
Source: VFBS; Doingbusiness.org
2.3.2 Documents Required
There are several differences in the documents that have to be submitted to the administrative bodies in order to register an LLC or a PJSC.
2.3.2.1 Limited Liability Company20
2.3.2.1.1 Documents Required
Decision of the founders’ meeting
Charter (2 copies)
Foundation agreement (2 copies)
Notarised registration application
Payment receipt
2.3.2.1.2 Other Registration Requirements21
Office premises have to be identified prior to the registration of the legal body. Registered or legal addresses and residential premises (apartments) cannot be used for these purposes. The proposed company has to be physically located at the address that it states in its corporate documents.
It is necessary to nominate a candidate (not a “nominal” one) for the position of General Director. If a foreign citizen is appointed, he/she is required to obtain a work permit.
A candidate for statutory accounting and tax reporting must also be appointed.
2.3.2.2 Private Joint Stock Company22
2.3.2.2.1 Documents Required:
Written application of the founders, requesting for the registration of the joint venture
Two notarised copies of the charter documents
2.3.2.2.2 Documents to be submitted by Russian Legal Entities
Notarised copy of the foundation documents for each legal entity participating in the establishment of the joint venture
Notarised copy of the decision of the property owner to establish a joint venture or a copy of the authorised body
2.3.2.2.3 Documents to be submitted by the Foreign Investor:
Statement from the trade register of the country of origin or other adequate proof of the legal status (or the status of the entrepreneur in the case of individuals) of foreign investors in accordance with the legislation of their home country's location, citizenship or permanent residence
Memorandum and Articles of Association
Document testifying to the solvency of the foreign investors, issued by their bank or another credit and financial organisation
2.3.3 Regulations23,24
2.3.1.1 Registration
If the documents are filed personally by one of the founders, the tax authorities will accept them directly. It is possible for a person with power of attorney to receive a registration certificate, otherwise the certificates are sent by regular mail, which takes some time to be delivered.
In general, once ready, the documents from the funds are sent to the newly established entity by post, which slows down the process. However, the founder can apply directly to the funds after state registration is complete.
The original copy of the Charter (Articles of Association) is not issued; only a certified copy is issued. New copies of the Charter can be requested by the tax authorities for submission to other state authorities; this takes approximately 5 working days and costs between EUR 4.6 to EUR 9.2.
The Ministry of Taxation needs to be informed about the bank account details within 10 days of the date of opening the account.
2.3.3.2 Authorised Capital
The minimum authorized capital for LLCs and PJSCs is RUB 10,000 or approximately EUR 229.2. For LLCs, at least 50 percent of the authorised capital should be paid prior to the company’s registration. For PJSCs, 50 percent of the authorised capital should be paid within 3 months of registration.
2.3.3.3 Shareholders
The number of shareholders/participants in PJSCs/LLCs cannot exceed 50. Any company or individual, irrespective of nationality, can be a founder and shareholder in any number of Russian companies. The company can be established by a single founder, provided that the founder is not a company owned by a single legal entity or individual.
2.3.3.4 Management Structure
LLCs and PJSCs are legally allowed to have a three-tier management structure consisting of a General Meeting Board, Board of Directors and an Executive Body, provided that they are not solely owned. A general meeting must be held at least once a year. The Board of Directors supervises the company’s business activities that are not discussed in the general meeting. The Executive Body, pursuant to the Charter, could be represented by either an individual or a collegial body.
2.3.3.5 Shares/Units
Russian financial law distinguishes between shares and units that represent the rights and obligations of shareholders/participants in accordance with their participation in the authorised capital. Units are not a security and can be sold to anyone. However, there might be a right of priority for the unit purchase. Shares are securities and the share allotment should be registered with the relevant state body. PJSCs are prohibited from the public subscription of shares.
2.3.3.6 Tax Compliance
Companies should file accounting and tax reports with the tax authorities on a quarterly basis. Reports on VAT should be filed every month.
2.4 Average Time (in days) Required for Setting up a Business
In order to start a business, the legal and bureaucratic hurdles that companies/entrepreneurs must overcome need to be identified. Registration is normally required for access to a range of market services, including finance, utilities (electricity, water) and contract enforcement. The greater the number of procedures, the more scope there is for uneven enforcement. According to a World Bank report, the average time taken to start a business is Russia is low in comparison to countries such as India, China and Brazil.
Figure 1 illustrates the obstacles inherent in starting business ventures in various countries.
Figure 1: Obstacles in Starting Businesses in Various Countries (2006)
Source: The World Bank Group - Document: Doing Business 2009
Note: OECD = Organization for Economic Co-operation and Development
Numbers represented for OECD based on the average calculated for the 27 countries in this category
3 Procedures for Immigration and Travel to Russia
The legal status and the procedures for foreign nationals on issues regarding their entry, exit, stay and employment is defined by Federal Law. All foreign nationals are required to hold a valid passport and visa to travel or conduct business in the Russian Federation. Russian entry visas, except for the transit visa, are issued by the Russian embassy in the applicant’s country of residence. Visas are granted, provided that the applicant has an original copy of the invitation letter issued by a relevant state authority, indicating the solicitation of a Russian individual or a
’sponsor’. The sponsor can be a foreign company based in Russia. It is important to know the sponsor’s contacts as Russian laws require sponsors to apply for extensions, replacements or any other changes to a visa.
Owing to the increasing number of cases of illegal immigration into Russia, several restrictions are imposed on foreign workers:
The number of non-Russians working in the retail sector is limited to 40 percent; the plan is for them to be completely excluded in the future25.
| Foreigners are barred from certain retail sectors; in particular from selling alcohol and pharmaceutical goods as well as entering many open markets throughout the country.
A simplified regime was agreed upon by the EU and Russia in May 2006. This includes people participating in exchange programmes, such as scientists, students and journalists, as well as participants in international sports competitions. The regime also allows non-residents to visit the graves of their relatives in Russia26.
3.1 Visa Requirements
| TYPE OF VISA | PURPOSE | INVITING AUTHORITY | GROUND FOR ISSUE | TERMS |
|---|---|---|---|---|
| Work visa | Required for working in a Russian company or a subsidiary company of a foreign legal entity | Employer company | Foreign individual’s Russian work permit |
|
| Foreign employee work visa | Required for working for an RO or Branch Office of a foreign company | The accreditation body of the RO/Branch Office | Foreign individual’s personal accreditation card and work permit |
|
| Business visa | Required if a foreign citizen visits Russia for meetings, negotiations, participation in exhibitions or takes part in personal development and training programmes | The authority/company that the foreign citizen is visiting in Russia | Invitation issued by an inviting authority |
|
| Tourist visa | Travelling | Invitation and voucher from Russian visa support authorities |
|
All foreigners need to register within 3 working days from the day of their arrival. In addition, in case they change location, staying for more than three days, then they need to inform the authorities about this. The inviting company should provide a form, signed by the owner of the property where the visitor is supposed to stay and legalised at the local DEZ (House-Managing Service) or local REU (Department of Repair and Exploitation).
3.2 Procedures for Work Permit27
Each foreign citizen must obtain a personal work permit to carry out labour activity in Russia. A medical test is also mandatory. The employer is obliged to obtain a work permit for a foreign employee as well as an employment permit granting the right to employ foreign nationals.
A work permit is not required if the foreigner has a Temporary Residence Permit (TRP). This is a document allowing foreign citizens to reside in Russia before obtaining a residence permit. It is issued for a period of 3 years, within 6 months after the application; the federal government has a quota for TRPs. However, TRP does not give the foreign citizen the right to change their place of residence outside the scope of the TRP. Further, should the foreigner want to leave Russia, he/she needs to apply for a single exit/entrance visa.
Permanent Residency
After residing in Russia on a temporary residence permit for not less than a year, a foreign citizen is allowed to apply for a residence permit. It is issued for a period of five years and can be extended for another five years. A residence permit enables the foreign citizen to work in Russia without a work permit and to travel in and out of the country without a visa.
A foreign national does not need a work permit if he/she is
An employee of diplomatic representations or a member of the consular institution of a foreign state in the Russian Federation
An employee hired to assemble and maintain equipment imported into Russia by a foreign company
A journalist accredited in the Russian Federation
A student studying in Russia and working in his/her spare time
A lecturer or teacher invited by an educational organisation
In circumstances other than those mentioned above, the Russian government adopts an annual employment quota limiting the number of foreign nationals entering the Russian Federation for work purposes.
3.3 Availability of Commercial Real Estate
Moscow is the largest and most attractive real estate market in Russia, accounting for a fifth of the total space and until recently growth rates for new construction projects were high. Real estate prices in Moscow are more than three times higher than in the other regions, and the total market is worth EUR 18 billion, or 40 percent of the Russian total. According to the Moscow city government, construction firms will add another EUR 63.7 billion worth of real estate to the capital's market between 2006 and 2010. According to the latest Cost of Living Survey by Mercer Human Resource Consulting, Moscow is the world’s most expensive city for expatriates for the second consecutive year. It ranks ahead of London, Seoul and Tokyo.
Russia's commercial real estate sector is currently the fastest growing in the world. An estimated EUR 2.2-2.6 billion was invested in the market in 2006 – several times more than the previous year. Total investment in commercial real estate in 2007 is expected to exceed EUR 3.7 billion, with foreign investors accounting for half of this amount.
As with the residential market, the Moscow commercial real estate market is by far the largest and also one of the most vibrant in Europe, second only to Paris with its annual growth rate of 1.0-1.2 million square meters a year. Total commercial floor space in Moscow is 8.5 million square meters, including 5 million square meters of A- and B-class office space. Vacancy is very low, less than 15 percent (Class A offices – up to 20 percent28) in Moscow. Likewise, there is scarcity of other forms of commercial space, such as warehouse and retail.
The average price for office space in Moscow ranged from EUR 1,125 to EUR 2,625 per square metre in 2005. Offices in downtown Moscow of Class A quality are in demand and their prices are high due to the falling volumes of construction in this part of the city. The rent for Class A office premises has shown practically no signs of growth, remaining constant at EUR 367.1 – 1,101.3 (in Moscow) per square metre. The price of Class B buildings ranged from EUR 477.2 to EUR 1,027.9 (in Moscow)29 per square metre30. According to the Land Code (passed in 2001), domestic and foreign entities are treated equally in terms of the purchase of land and buildings. Nevertheless, the purchase of agricultural land by foreigners is still prohibited. In addition, foreign entities are restricted from purchasing land close to federal borders and in areas that are declared by the President as critical to national security31.
The average price of office space in Moscow ranged from EUR 390 to EUR 653 per square metre in the first half of 2006. The demand for office space is traditionally high. There is a shortage of quality office locations in spite of the large number of new construction work. In addition, the demand for quality office space is growing, which is explained by the rising income of Russian companies and the emergence of new foreign players in the market. The main deficiency is seen for office space smaller than 200 square metres. The average prices for office rent and purchase are shown in Table 5. The lowest rates are recorded for offices in the East and North East Districts of the city. The rent for Class A office premises ranges from EUR 367.1 to EUR 1,101.3 (in Moscow)32 per square metre33.
Table 5: Average Off ice Rent and Sales Prices for 2008 in Russia
| OFFICE TYPE | AVARAGE RENT PRICES (EUR PER SQ.MTR PER YEAR) | AVARAGE SALES PRICES (EUR PER SQ.MTR) |
|---|---|---|
| Class A | 367.1–1,101.3 | 3,671.0–9,544.6 |
| Class B | 477.2–1,027.9 | 2,202.6–5,139.4 |
Source: Blackwood - Commercial real Estate - 2008
4 Social Security System in Russia
4.1 Social Security
The social security system in Russia comprises social insurance, unemployment insurance and insurance against injury and work-related diseases. The basic social security system involves regular payments made only by employers to the Pension Fund, Obligatory Medical Insurance Fund and Social Security Fund. The payments are made through regressive payroll tax. Table 6 shows the contributions and the benefits of the social security system in Russia.
Table 6: Social Security System in Russia
| SOCIAL INSURANCE | EMPLOYERS' CONTRIBUTION | ADMINISTRATIVE ORGANISATION | BENEFITS | |
|---|---|---|---|---|
| PAYROLL | PERCENTAGE | |||
| Old Age, Disability, and Survivors | First RUB 280,000 (EUR 6,417.6) | 20 percent – taken from Single Social Tax (SST) of 26% |
|
|
| Next RUB 280,000 to 600,000 (EUR 6,417.6 to EUR 13,752) | RUB 72,800 (EUR 1,668.6) + 10 percent of the income above RUB 280,000 (EUR 6,417.6) | |||
| Over RUB 600,000 (EUR 13,752) | RUB 104,800 (EUR 2,402) + 2 percent of the income above RUB 600,000 (EUR 13,752) | |||
| Sickness and Maternity | Included in SST; Cash Benefits – 2.9% Medical Benefits – 2.8% |
|
|
|
| Unemployment Insurance | None, financed from federal and local budgets | NA |
|
|
| Work Injury | Between 0.2% and 8.5% of payroll, according to the 32 classes of professional risks related to the 22 categories of the industry |
|
|
|
Source: SSA - 2008-2009
5 Free Zones in Russia
A legal framework for special economic zones (SEZ) where extensive tax concessions are applicable has been introduced by the federal government. Over a period of 20 years, 3 zones have been created to promote industry, research and development (R&D), and tourism. Tax benefits vary according to each type of zone. For instance, an industrial zone can provide regional incentives of 20 percent34 on profit tax and exemptions from property and land tax, in addition to accelerated depreciation, a customs-free zone and a guarantee against unfavourable changes in tax laws. However, so far, only a few SEZs have been created and are functional, mainly in relation with R&D activities in St. Petersburg and Moscow. Further, there are separate legal regimes for SEZs in Kaliningrad and Magadan, where different concession rates apply. Many other such zones are currently being considered35.
6 Opening a Bank Account in Russia
The Central Bank of Russia (CBR) is the main regulator of commercial banks and issues licences for credit institutions in Russia36. Russian commercial banks offer both retail and corporate services.
6.1 Overview of Retail Banking
Currently, there are around more than 1,00037 licenced and registered banks in Russia; however, these are generally small and under capitalised38. After the 1998 crisis, banking services became concentrated in state-owned banks with traditionally well-developed client infrastructure. A system of patronage continues to exist between industries and banks. The banking sector is dominated by two state-owned banks: SBERBANK Rossii and Vneshtorgbank. Foreign banks can operate only as subsidiaries and must have a fixed number of Russian employees and Board members39. Foreign banks such as Citibank and Raiffeisen Bank are also operating in the country.
6.2 Liberalisation of Russian Currency Control40
In an attempt to make the rouble a fully convertible currency, in June 2004, the Central Bank and the Russian government agreed to gradually abolish several strict currency control restrictions up to 2007. Some of the abolished restrictions pertain to mandatory reserves, and special types of bank accounts and security accounts. Restrictions that still need to be taken into account while making currency transactions in Russia are as follows:
Repatriation of Currency Proceeds: Russian companies are required to collect all foreign currency export proceeds on their bank accounts in the country.
Opening Transaction Passports: Transaction passports are necessary for conducting certain transactions with Russian banks.
Prohibition on Performing Foreign Currency Transactions: Certain foreign currency transactions are prohibited for Russian residents (with some exceptions provided by the Currency Law).
Sale and Purchase of Foreign Currency: The purchase and sale of foreign currency is to be performed through Russian authorised banks.
Notifying Tax Authorities: Russian companies or individuals are supposed to notify tax authorities for opening overseas bank accounts in OECD/FATF member countries. They are also required to present regular cash flow reports on such accounts (for legal entities) or account balances (for individuals) to the tax authorities.
6.3 Opening a Bank Account41
There are no restrictions imposed on foreign investors planning to open accounts with authorised Russian banks. The documents required from non-residents are listed below:
An application for opening an account
Notarised translations (legalised by the concerned embassy) of : Copies of the constituent documents, an abstract or a copy of the abstract from the trade register42, other documents defining the legal status of the non-resident in accordance with the legislation of the country of origin
Notarised certified copy of the regulations on the Branch Office/RO, should the agreement on the opening of the account be signed on behalf of the/a legal entity – non-resident
by a head of the branch office/RO according to the power of attorney
Notarised certified copy of the approval of the RO/Branch location by corresponding state bodies; RO of a non-resident to also produce notarised certified copies of approval for opening an RO of non-resident or other documents certifying the accreditation of the RO of the non-resident in the Russian Federation, an abstract or a copy thereof from the aggregate state register of ROs/Branch Offices of foreign companies accredited on the territory of the Russian Federation
Certificate of registration with the tax body (both original and a copy)
List of authorised signatures, duly certified
Document of assignment of the signatories who have provided their authorised signatures
Bank account agreement signed by the client and the bank (two copies)
Notarised, legally translated certificate of power of attorney for opening a bank account, should a non-resident want to dispose funds into his/her account via an authorised person
6.4 Major Russia Banks
Table 7: Top Banks in Russia – 2008
| CATEGORY | BANK NAME |
|---|---|
| Best Domestic Bank | MDM Bank |
| Best Overseas Bank | RZB/Raiffeisenbank |
| Best Investment Bank | UBS Brunswick |
| Best Commercial Bank | Vneshtorgbank (VTB) |
| Best Consumer Finance House | Russian Standard |
| Best Forex Bank | Alfa Bank |
| Best Trade Finance Bank | Vneshtorgbank (VTB) |
| Best Syndicated Loan Arranger | RZB/Raiffeisenbank |
| Best Energy & Commodities Finance House | SG |
| Best Domestic Debt Underwriter | Renaissance Capital |
| Best Domestic Debt Research | Troika Dialog |
| Best Secondary Debt House | Trust Investment Bank |
| Best Eurobond Arranger | Deutsche Bank |
| Best Equities Research | Brunswick UBS |
| Best Bookrunner Primary Equities | UBS Brunswick |
| Best Secondary Equity House | Aton Capital |
| Best Equity-linked House | Brunswick UBS |
| Best M&A Arranger | Citigroup |
| Best Asset Manager | Troika Dialog Asset Management |
| Editor’s Special Award for Transparency | MDM Bank |
Source: Global Finance– 2008
7 Recruitment of Local Staff
Russian employment law applies to all employment relationships in Russia including those involving Russian nationals, foreign nationals, stateless persons, international organisations,
and Russian and foreign legal entities.
The agreements between the employee and the employer are stipulated in the Russian Labour Code43.
7.1 Brief Overview of the Labour Law
When an employer makes decisions, the opinion of trade unions should be considered. Trade unions are normally formed at a company level, rather than at an industrial level. If an agreement cannot be reached, the employer can take unilateral decisions; however, these actions can be challenged in court.
7.1.1 Labour Contracts44
A labour contract should contain basic conditions, such as the place of work, date of commencement, designation, rights and obligations of the employer and the employee, salary and benefits, and additional conditions such as trial period and confidentiality. Labour contracts can be signed for both fixed and indefinite periods of time, but fixed contracts cannot exceed five years and are only allowed for the following employees:
Directors, deputy directors, chief accountants
Employees hired for specific projects
Part-time workers
If the employee is involved in work that is temporary by nature
7.1.2 If the employee is involved in temporary work Trial period
The trial period cannot exceed three months. Exceptions to this rule include company chief executives and their deputies, chief accountants and their deputies, heads of branches, ROs and other subdivisions of legal entities; however, it should not exceed six months. In addition, certain categories of employees are not subject to a trial period including pregnant women, minors and transferees.
7.1.3 Salary
There is a federal minimum monthly wage (currently RUB 2,300 or approximately EUR 52.7)45. However, the average monthly wage for Russian Federation in July 2008 was RUB 17,538 or EUR 402.058, and, the salaries paid in St. Petersburg and Moscow were comparable to those paid in Western Europe. In addition, salary must be paid in roubles and in no less than two monthly instalments on the dates established by the employer’s internal policy and in the employment contract. The payment should not be delayed by more than 15 days.
7.1.4 Working Hours
The standard working week is of 40 hours. Overtime work should not exceed 4 hours over two consecutive days and is limited to 120 hours per year. The minimum annual paid vacation is 28 calendar days.
7.1.5 Employee Rights
Employees are entitled to receive the following benefits:
Employees are paid during periods of sickness; the employer is compensated for this with a reduction in UST liability. Sick pay is currently limited to RUB 17,250 per month (approximately EUR 395.4).
Women are entitled to take up to 70 calendar days’ maternity leave prior to birth and 70 calendar days after birth. Pay during this period is calculated on the same basis as sick leave. Moreover, women are entitled to take this leave until the child reaches the age of 3 years (the leave in such cases is unpaid for during the second half of this period).
Payment for overtime working hours for the first two hours is calculated at a rate not less than 1.5 times46 the normal hourly rate, and for subsequent hours at not less than twice the normal hourly rate.
7.1.6 Labour Book47
The employer has to maintain a work labour book (trudovaya knizhka) for each employee working with an enterprise for more than 5 days. This labour book tracks the activities of the employee, the extent of work performed, reasons for dismissal, etc. Employers are required to sign, stamp and maintain these work record cards for each employee.
7.1.7 Liability for Violation of the Labour Code48
Violations of the Labour Code can result in fines of:
RUB 30,000–50,000 (approximately EUR 687.6–1146.0) for a legal entit
RUB 1,000–5,000 (approximately EUR 22.9–114.6) – For the company’s officials or suspension of the activities of the employer for a period of up to 90 days49
7.2 Major Recruitment Agencies
The major recruitment agencies in Russia are presented in Table 8.
Table 8: Major Recruitment Agencies and Websites
| RECRUITMENT AGENCIES IN RUSSIA | WEBSITE |
|---|---|
| Best Recruit | http://www.bestrecrut.ru |
| Intercom | http://www.job-intercom.ru/public/ |
| Lareyn | http://www.lareyn.ru/about/ |
| TRIZA EXCLUSIVE | http://www.triza.ru/?part=forclients&rubric=services&lang=eng |
| Exclusive Personnel | http://www.exclusivepersonnel.ru/about.php |
| Planeta Kadrov | http://www.planetakadrov.com |
| Imperial | http://www.imperial-job.ru |
| Olekx | http://www.oleks.ru |
| INTERNET AGENCIES | WEBSITE |
| Rabota.ru | http://www.rabota.ru |
| Job in Moscow | http://www.jobinmoscow.ru/agency.php |
| Super Job | http://www.superjob.ru/catalog/?town=4&from=20 |
7.3 Average Salary Ranges
The median salary ranges by job, employer type, industry and city in Russia in 2009, as per Payscale, are presented in the Tables 9 to 13.
Table 9: Median Salary by Job in Russia in 2009
| JOB | mEDIAN sALARY (IN EUR) |
|---|---|
| Country Manager/General Operations | 77,923.1 |
| Chief Executive Officer | 94,044.7 |
| Project Manager Construction | 69,938.8 |
Source : Payscale, 2009
Table 10: Median Salary by Employer Type in Russia in 2009
| EMPLOYER TYPE | MEDIAN SALARY (IN EUR) |
|---|---|
| Company | 20,799.9 |
| Private Practice/ Firm | 21,089.5 |
| Other Organisations | 18,621.1 |
| Contract | 16,502.4 |
| Government – Federal | 11,373.8 |
| Non-profit Organisation | 10,382.8 |
| Franchise | 21,610.3 |
| Self-Employed | 27,504.0 |
Source : Payscale, 2009
Table 11: Median Salary by practice area in Russia in 2009
| INDUSTRY | MEDIAN SALARY (IN EUR) |
|---|---|
| Corporate, Business, Mergers & Acquisitions | 49,114.3 |
| Real Estate/Construction/Land Use | 63,259.2 |
| Intellectual Property/Patent Law | 49,114.3 |
| Tax/Taxation Law | 31,433.2 |
Source : Payscale, 2009
Table 12: Median Salary by City in Russia in 2009
| CITY | MEDIAN SALARY (IN EUR) |
|---|---|
| Moscow | 23,065.4 |
| St. Petersburg | 18,819.5 |
| Novosibirsk | 13,393.4 |
| Petersburg | 7,151.0 |
Source : Payscale, 2009
Table 13: Median Salary by Certif ication in Russia in 2009
| DEGREE | MEDIAN SALARY (IN EUR) |
|---|---|
| Project Management Professional | 40,207.2 |
| Microsoft Certified Solution Developer | 23,242.8 |
| Microsoft Certified Systems Engineer | 21,318.6 |
| Business Certificate | 26,403.8 |
Source : Payscale, 2009
8 Taxation
Generally, there is no distinction between Branch Offices, ROs and Russian legal entities in terms of tax compliance. Legal entities registered under Russian law are liable to pay taxes on their worldwide income. Foreign legal entities are subject to taxes only on the income derived from business activities of the RO/Branch Office within Russia and on the particular income derived from a Russian source50. However, they are not subject to corporate income tax on their net business income, unless their Russian presence creates a permanent establishment. Federal taxes are applied throughout the Russian Federation at uniform rates (VAT) and at rates determined by the Tax Code. Local taxes are determined by the Tax Code and the local or regional government, and are collected locally. Local taxes include land tax, water and natural resource tax, etc.
8.1 Tax Base
8.1.1 Corporate Income Tax51
The tax base is defined as the total income received by a taxpayer, minus related expenses and allowable deductions.
8.1.1.1 Income
Income includes sales and non-sales income:
Sales income includes total income from the sales of goods, works, services and property rights. Income received in foreign currency must be converted into roubles using the official exchange rate set by the Central Bank of Russia (CBR) as per the date of income recognition.
Non-sales income includes income from goods, services and property rights received free-of-charge, based on market value, except in the case of property received by a Russian company from its parent or subsidiary where the parent owns more than 50 percent of the subsidiary.
8.1.1.2 Deductible Expenses
Expenses are divided into sales expenses (which are generated from the core business activity of a taxpayer) and non-sales expenses. In order to be considered deductible for profit tax purposes, expenses need to be economically justifiable, incurred in the course of the taxpayer’s income generating activity and supported by relevant documentation.
8.1.1.3 Individual Income Tax52
Individuals are subject to Russian individual income tax (as either residents or non-residents) based on:
Worldwide income, provided that the individual is a Russian tax resident, i.e., a person who spends 183 or more days in Russia in a calendar year
Income derived from employment only in Russia or from Russian property and investment, provided that the individual is a tax non-resident, i.e., individuals who spend fewer than 183 days in Russia in a calendar year
8.1.1.4 Property Tax53
For both Russian and foreign legal entities with permanent establishments in Russia, taxable property includes property and buildings as fixed assets based on Russian accounting standards. For foreign legal entities without permanent establishments in Russia, only buildings are subject to property tax.
8.2 Tax Rates
8.2.1 Corporate Income Tax54
The maximum profit tax rate is 24 percent and comprises the following:
6.5 percent, payable to the federal budget
17.5 percent, payable to the regional budget Regional governments have the authority to reduce their portion of the profit tax by up to 4 percent.
8.2.1 Withholding Corporate Income Tax55
Income from Russian sources that is not attributed to a permanent component, such as rent, royalties, interest, dividends and international transportation income received by a foreign entity, is subject to withholding tax.
There is no withholding tax on the sharing of profits from a local Russian office. Nevertheless, withholding taxes may be reduced or eliminated if the recipient is a tax resident in a country having a double tax treaty (DTT) with Russia. As stipulated in the DDT, residents of Luxembourg are subject to 10 or 15 percent withhold tax on dividends. In particular, 10 percent applies to investment not less than 30 percent (and not less than ECU or EUR (European currency unit – equivalent to EUR and not equivalent to RUB) 75,000); a tax of 15 percent is levied in all other cases.
The following tax rates for withholding tax are paid to the Federal Budget:
For dividends payable to a Russian company or to a foreign permanent establishment – 9 percent
For dividends payable to a foreign legal entity – 15 percent
For dividends payable to an individual with a Russian tax resident status – 9 percent
For dividends payable to an individual with Russian non-resident status – 30 percent
8.2.3 Payroll Taxes56
Each employer in Russia, including foreign investors registered in the country, makes social security contributions or pays the United Social Tax (UST), pension contributions, and contributions for injury and work related illnesses.
8.2.3.1 United Social Tax
UST is calculated on the basis of the gross payroll of each employee and is payable to the Federal Budget, social insurance and medical insurance funds. The scale of annual UST rates is regressive:
First RUB 280,000 (EUR 6,417.4) – 26 percent
Next RUB 320,000 (EUR 7,334.4) – 10 percent
Over RUB 600,000 (EUR 13,752) – 2 percent
8.2.3.2 Russian Pension Fund
The contributions to the Russian Pension Fund are calculated on the basis of the gross payroll of each employee and paid on a regressive scale, depending on the annual income. The contributions are capped at RUB 56,800 or EUR 1,301.9 per year per employee, and are not payable on an individual’s annual income of above RUB 600,000 or EUR 13,752. Pension fund contributions are deductible from the UST, and are thus not considered as additional costs.
8.2.3.3 Insurance against Injuries and Professional Illness
These are additional contributions paid to the Social Insurance Fund. The rate varies from 0.2 percent to 8.5 percent on the payroll; it is dependant on the risk category of the business line, determined by the fund.
8.2.4 Property Tax57
Property tax is levied on all Russian and foreign legal entities owning property in Russia. The tax rate is set by regional legislation and cannot exceed 2.2 percent.
On fixed assets – 2.2 percent
On owned land plots – 0.3 -1.5 percent (depends on the type of plot)
8.2.5 Individual Income Tax
A single income tax rate of 13 percent applies to all types of income, apart from the following:
Tax on specific types of income including interest from bank deposits in excess of specified rates – 35 percent
Dividend income – 9 percent
Material gain on interest free or low interest loans – 35 percent
8.2.6 Indirect Taxes/VAT
VAT is generally designed as a tax to be borne ultimately by consumers, but collected through taxable persons on a basis similar to the EU model.
On socially important goods – 10 percent
On other goods and services – 18 percent
8.3 Tax Incentives
8.3.1 Special Tax Regime58
The Tax Code has a special tax regime, according to which the taxpayer is required to pay one specified tax instead of several taxes, provided certain requirements are met.
8.3.1.1 Simplified Tax System
The simplified tax system is a substitute for profit tax, VAT (except that paid on imports), property tax and part of UST. It is limited to companies that meet the following criteria:
The annual turnover of the company does not exceed RUR 20,000,000 (approximately EUR 560,000) RUR 20,000,000 (approximately EUR 458,400)
The net book value of fixed assets and intangible assets does not exceed RUR 100,000,000 (approximately EUR 2,292,000)
The number of employees is below 100 persons
The simplified tax rate is applicable in the following manner:
If a taxpayer selects ‘revenues’ as a tax base – 6 percent
If a taxpayer selects ‘revenues less deductible expenses’ as tax base – 15 percent
8.3.1.2 Unified Agricultural Tax
Taxpayers producing, processing and selling agricultural products qualify for the simplified tax system, provided that income from the sales of agricultural products is at least 70 percent of its overall sales income. The tax rate is imposed at a rate of 6 percent of revenues minus certain deductible expenses.
8.3.1.3 Tax on Imputed Income
Tax on imputed income is imposed on individual entrepreneurs and small companies, after which they are exempted from most other taxes. The tax rate is 15 percent on the ‘imputed’ revenue per month and is adjusted by special coefficients based on the type of land used, range of goods, seasonal factors, level of income, etc.
8.3.2 Regional Incentives59
Regional authorities are legally allowed to reduce their regional allocation of profit tax from 17.5 percent to 13.5 percent. They may also provide exemptions from property and land taxes. Such exemptions are usually offered on meeting specific investment criteria in the region. The St. Petersburg region offers incentives of this kind, but neither Moscow city nor the Moscow region follow this lead.
8.3.2.1 Software Companies
Export-oriented software developers may qualify for reduced unified social tax liabilities, and also for accelerated profit tax deductions on computer equipment and R&D expenditure.
8.3.2.2 Charter Capital Contributions
Goods imported as charter capital contribution to a Russian company may be exempted from customs duty and import VAT. These exemptions apply if the contribution is made in the form of technological equipment, classified as fixed production assets.
8.4 Distribution of Profits60
Profits can be repatriated through a number of techniques, such as transfer pricing mechanisms, service charges, royalties and interest payments. However, this is carried out under strong official monitoring and there are often additional tax payments:
The amount of customs duty, can vary due to transfer prices
Consultancy services are subject to VAT
Royalties charged must be economically justifiable
Interest is deductible up to a certain rate
The following transactions are challenged by the Russian tax authorities and additional late payment interest and penalties are imposed if the sales price deviates from the average market price by more than 20 percent:
Transactions between related companies where one party of the transaction directly or indirectly owns 20 percent or more of the share capital of the other party
Barter transactions
Foreign trade transactions
Transactions where the price deviates by more than 20 percent during a brief period
According to the new currency control law, no restrictions have been imposed on the conversion of roubles into foreign currency by non-residents for the purpose of subsequent repatriation61.
9 Appendix
Appendix I: Useful Links and Addresses
| TYPE OF ORGANISATION | ADDRESS | TELEPHONE | WEBSITE |
|---|---|---|---|
| RUSSIAN MINISTRIES, AGENCIES aND SERVICES | |||
| Embassy of the Grand Duchy of Luxembourg | Khrouchtchevski Pereoulok 3 119034 Mosow |
Ambassador Mr Gaston Stronck Tel: +7 (495) 786 66 63 E-mail: moscou.amb@mae.etat.lu Moscou.consulat@mae.etat.lu |
|
| Embassy of the Russian Federation in Luxembourg | Château de Beggen L-1719 Luxembourg Trade Office Drève de Lorraine B-1180 Bruxelles |
Tel: +352 42 23 33 Fax: +352 42 23 34 Tel: +32 (0) 2 375 74 10 Fax: +32 (0) 2 375 74 00 |
|
| Luxembourg Russia Business Association | Hoogewerf & Cie PO Box 878 19, rue Aldringen L-2018 Luxembourg |
Tel: +352 46 00 25 Fax: +352 46 00 27 E-mail: hooge@pt.lu |
|
| Government of the Russian Federation | 103274, Moscow, Krasnopresnenskaya Naberezhnaya, 2 |
Tel: +7 (495) 205 4297 | www.government.ru |
| Ministry of Finance | 109097, Moscow, Ilyinka Ulitsa, 9 | Tel: +7 (495) 298 9101 | www.minfin.ru |
| Federal Financial Markets Service (FFMS) | 119049, Moscow, Leninsky Prospect, 9 | Tel: +7 (495) 935 8790 | www.fcsm.ru |
| Federal Tariffs Service | 109074, Moscow, Kitaygorodskyi Proezd, 7 | Tel: +7 (495) 710 4507 | www.fstrf.ru |
| Federal Statistics Service | 103450, Moscow, Myasnitskaya Ulitsa, 39 | Tel: +7 (495) 207 4902 | www.gks.ru |
| The Central Bank of the Russian Federation | 107016, Moscow, Neglinnaya Ulitsa,12 | Tel: +7(495) 771 9100 | www.cbr.ru |
| Russian Chamber of Commerce and Industry | 109012, Moscow, Ilyinka Ulitsa, 6 | Tel: +7 (495) 929 0009 | www.tpprf.ru |
| Federal Antimonopoly Service | 11 Sadovaya-Kudrinskaya, Moscow 123231 | Tel: +7 (495) 252 7653 | http://www.fas.gov.ru |
| Association of European Businesses | 125047, Moscow, Chetvyortaya T verskaya-Yamskaya Ulitsa, 21 |
Tel: +7 (495) 721 1760 | www.aebrus.ru |
| CONSULTING AGENCIES | |||
| VISTA Foreign Business Support | Trubnaya str. 25/1, Moscow, 127051 | Tel: + 7 (495) 933 78 22 | http://www.vfbs.ru |
| KPMG | moskva 119019, gogolevskij bul`var, 11 | Tel: + 7 (495) 937 4477 | http://www.kpmg.ru/index.thtml |
| ACG | Bolshaya Pochtovaya St., 26v, Suite 409 Moscow, 105082 |
Tel: + 7 (495) 223-6595 | http://www.acg.ru |
| Optima Lex | Rusakovskaja street, build 10, floor 4 Metro station “Krasnoselskaya”, Russia |
Tel: +7 (495) 937 2926 | http://www.lenadia.ru/en/ |
Appendix II: Average Living Costs for Expatriates
The cost of living in Russia varies tremendously depending on the region. For instance, Moscow has one of the highest costs of living in the world, mainly due to high housing costs. However, for those living on the outskirts of Moscow or other major Russian cities, cost of living can be extremely low. Moscow is the world's most expensive city for the second consecutive year according to the latest Cost of Living Survey from Mercer Human Resource Consulting. The appreciation of the rouble against the US dollar, combined with the ever-increasing accommodation charges, has driven up costs for expatriates in Moscow.
Table 14 summarises the estimated increase in worldwide tax liabilities for US expatriates in Russia as a result of the Tax Increase Prevention and Reconciliation Act (TIPRA))
Table 14: Worldwide Tax Liabilities for US Expatriates in Russia
| INCREASE IN WORLD LIABILITY AS A RESULT OF TIPRA | |||
|---|---|---|---|
| ANNUAL GROSS INCOME (EUR) | ANNUAL HOUSING INCOME (EUR) | US EXPATRIATES LIVING IN CITIES OTHER THAN MOSCOW EUR | US EXPATRIATES LIVING IN MOSCOW |
| 112,500 | 22,500 | 2,175 (15%) | 1,875 (13%) |
| 225,000 | 56,250 | 17,400 (48%) | 16,725 (47%) |
| 375,000 | 75,000 | 24,375 (30%) | 23,550 (29%) |
| 750,000 | 112,500 | 32,625 (16%) | 31,725 (16%) |
Source: ERNST & YOUNG
10 Disclaimer
The Government of the Grand Duchy of Luxembourg declines all responsibility regarding the use of information featured in this document. The contents are provided for information purposes only. They contain information which is not necessarily complete, exhaustive, precise or up to date. In the event of discrepancies between the texts of this publication and the original documents, the original documents as officially published shall apply. This publication may refer to external sites over which the Government of the Grand Duchy of Luxembourg has no control and for which it declines all responsibility.
June 2009
Ministry of the Economy and Foreign Trade
Directorate of Foreign Trade
L-2914 Luxembourg | Grand Duchy of Luxembourg
Tel.: (+352) 247 841 25 | Fax: (+352) 22 34 85
info@luxembourgforbusiness.lu
www.luxembourgforbusiness.lu
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