Accreditation of representative office employees – obligation and not the advantage

Our clients – representative offices of foreign companies – often ask the following question: what advantage does an employee accreditation in the Chamber of Commerce and Industry have over the highly-qualified foreign specialist (HQFS) status? We prepared some useful information to make it clear for you.

Let’s dot all the i’s! The employee accreditation in the Chamber of Commerce and Industry (CCI) and receiving of the HQFS are essentially different things. The accreditation is much of a permit giving the right to a representative office to employ a foreigner. The HQFS is the employee’s status, a kind of a permit to work in the Russian Federation with particular privileges.

Personal Accreditation

So, the accreditation of a foreign employee in the Chamber of Commerce and Industry is the obligation of a representative office. The employment is not possible without such accreditation. There are no other options – either to obtain employees’ accreditation or not. It is the obligation of a representative office.

The Chamber of Commerce and Industry of the Russian Federation deals with personal accreditation since January, 1, 2015. The Certificate of Personal Accreditation can be obtained there.

The list of necessary documents submitted to the CCI to obtain the Certificate includes:

If a representative office hires an employee from abroad (without the status of a resident), personal expenses reimbursed to such employees are taxed at 30%.

1. A letter from the representative/branch office asking for a personal accreditation of a foreign employee of the representative office signed by its head and certified by the seal.

2. The original and copy/notarized copy of the Certificate of the Entry in the State Register of Accredited representative/branch offices of foreign legal entities.

3. The original and copy/notarized copy of Information bulletin of Entering in the State Register of Accredited representative/branch offices of foreign legal entities.

4. The details card of the representative/branch office of the foreign legal entity.
   

5. Autobiographical reference of an employee with 2 photos attached.
   

6. 2 colour photos in the light background 3x4 cm in size (formal clothes)

7. A copy of passport pages with background information.

8. The original of personal accreditation card issued by the State Registration Chamber with the Ministry of Justice (if available).

Meanwhile there is a specific ‘quota’ – a representative office may hire five foreign employees. In case a representative office needs more staff, a written motivation letter shall be sent to the CCI stating the staff number needed, and after that the required approval will be granted. Otherwise the next inspection by the Federal Migration Service may lead to a fine of 700,000-1,500,000 RUB for every employee of the representative office including a deportation of such persons.

Meanwhile there is a specific ‘quota’ – a representative office may hire five foreign employees. In case a representative office needs more staff, a written motivation letter shall be sent to the CCI stating the staff number needed, and after that the required approval will be granted. Otherwise the next inspection by the Federal Migration Service may lead to a fine of 700,000-1,500,000 RUB for every employee of the representative office including a deportation of such persons.

HQFS status

We found out that a representative office has to arrange the Certificate of Personal Accreditation for its foreign employees. In the meantime the employees may work according to their ‘traditional’ work permit or a work permit with an HQFS status.

The job offer for the HQFSs has several additional benefits both for the status owner and the representative office.

The advantages of the HQFS status for the employee:

1. The quota is not considered for the HQFS work permit arrangement.

2. The entry quota is not considered for an entry invitation for the HQFSs and their family members.

3. The work permit is granted for the validity period of a labour or civil law contract (not more than 3 years) and may be extended an unlimited number of times.

4. It is possible to arrange a work permit which will be valid in the territory of several constituent entities of the Russian Federation.

5. An HQFS may arrange a residence permit in the Russian Federation for themselves and the family.

6. In case of an early termination of the labour contract with one employer, an HQFS may find another one during 30 working days; the work permit and visa issued earlier will still be valid.

7. An HQFS and their family members are not required to undergo migration registration for the period of not more than 90 days since the date of entry in the Russian Federation.

As for a representative office, a foreign highly-qualified specialist intake is a cost-effective solution as it allows saving on ‘salary’ taxes considerably.

For more information on how to obtain the HQFS status and how it helps you save, please read «How to increase the representative office employees’ income by 24% without Company’s expenses increase».

If you have any questions concerning the accreditation of representative office employees and the payroll to foreign employees, please contact us.

We are willing to assist you!