Businesses have blasted changes to Russia’s migration rules that prevent firms registering foreign employees from February 15. Expats will now have to register at their place of residence every time they enter Russia, but many landlords don’t provide formal rental agreements. “The employer is allowed to notify a relevant territorial office of the Federal Migration Service of a foreign citizen’s arrival at a place of actual residence on the basis of a residential property agreement concluded between the employer and the landlord, or between the employee and the landlord,’ part 4 of Federal Law 385 states.

FMS deputy director Yekaterina Yegorova said that employers can only register their employees if they own the apartments they are living in.

“A landlord can register a foreign tenant of their own free will, and we don’t exclude the participation of an employer who is the landlord,” Yegorava told a RIA Novosti press conference.

Foreign specialists earning over 2 million roubles ($68,000) a year will be exempt from the rules, and will get tax benefits, visas for family members and 90 days to register instead of the three days regular visa holders are granted.

But for many the new rules could mean long hours spent in queues at government offices.

Threat to small businesses

Business chambers have hit out at the rules, despite the FMS giving them advice on how they can ease the headache created by process.

“The right hand doesn’t know what the left is doing,” said Chris Gilbert, director of Moscow office of the Russo-British Chamber of Commerce. “On the one hand, we have initiatives from the Economic Development Ministry trying to do more to attract foreign specialists into the country as part of Russia’s overall modernisation strategy.

“[And] on the other we have different government agencies making matters more difficult for those very specialists.”

The cost and responsibility of registering is still likely to fall on businesses, which will face penalties from the FMS if their employees’ paperwork is not in order.

“Even assuming the landlord agrees to go in person and register [the foreign employee], there is no guarantee that they will do so within the necessary time period,” said Rob Jensky, managing director of Language Link in Russia. “Failure to do so will obviously result in a fine for the company, and based on the current levels of fines, this is just one more nail in the proverbial coffin for small-and medium-sized businesses.”

And expats could find themselves paying more for their apartments to compensate landlords, who are likely to end up paying taxes, which many currently avoid by not disclosing rental agreements.

Employer support

Despite the government’s plan to attract foreign specialists to the Skolkovo innovation centre project, Yegorova said registration won’t be abandoned for foreigners in the near future.

She declined to comment on why the changes to the law were being made.

Foreign employees will now only be able to register at a hotel or with their landlord, but international companies say they will assist their employees.

“You can no longer use the place of work to get registered, but the authorities are now suggesting your employer will still be allowed to give you a hand with this process,” said Lyudmila Shiryayeva, director for human capital at Ernst & Young in Russia.

While the new procedure will be particularly tough on new arrivals who don’t speak Russian, employers are also confused about how the new laws will be applied.

“The exact procedure for such registration is not clear yet - for example whether employers will have to find apartments and sign the rental contracts for foreign employees, or whether employers can assist even if foreigners have their own rental agreements,” Shiryayeva said.

The Russo-British Chamber of Commerce is organising a seminar for its members in Moscow at the beginning of March, the exact date of which hasn’t been confirmed, with the State Registration Chamber and the FMS to help clarify the situation.

“As to what companies can do to help their employees - they must continue to do what they always should do. Dot all the ‘i’s and cross all the ‘t’s,” said Gilbert.

What is to be done?

From February 15 the landlord will have to follow the same process currently taken by employers.

When a foreigner enters the country he gets a migration card, which has to be taken to the local post office with the landlord. After filling in the relevant forms the worker is given a registration form, which should be carried at all times.

But for regular travelers this will take time and bureaucracy, whereas large companies have staff dedicated to human resources and registration.

“It’s really difficult for foreign correspondents that travel a lot to register all the time,” said one reporter, who asked not to be named.

One visa expert, who asked not to be identified for legal reasons, said companies may have fake residences to register people.

Landlord’s nightmare

The law will decline the attractiveness of a foreign tenant but won’t rise the rental prices, claim real estate agencies.

“Landlords will be better disposed towards locals than foreigners to avoid registering the latter every time they leave and come back to the country,” said Anna Levitova, managing partner at Evans real estate agency.

However the landlords won’t be able to refuse to register the tenant or will face a several thousand fine.

Levitova said the real estate agencies will probably do this registration procedure for the landlords by a letter of authority (LA) for some minor extra charge.

Source: The Moscow News