Foreign legal entities may, for the purposes of performing the same activity within the Russian Federation as it has been performing in the country where it is registered, organise a separate subdivision: a branch office, a representative office or any other separate subdivision. Under the Russian legislation, representative and branch offices are not legal entities; they act on behalf of the Company and in accordance with the Regulations approved by the Company. The Heads of branch and representative offices are appointed by the Company and act under a Power of Attorney. Branch and representative offices of the Company may perform business activity within the Russian Federation from the date of the accreditation thereof.

    Organisation, operation and liquidation of branch and representative offices are controlled by the state through accreditation. The State Registration Chamber of the Ministry of Justice of the Russian Federation keeps a unified state register for foreign branch and representative offices accredited within the Russian Federation and perform the accreditation of foreign branch and representative offices within the Russian Federation. In some cases, depending on the activity type of the Company, its branch or representative offices may be accredited by the Chamber of Industry and Commerce of the Russian Federation, the Ministry of Communications of the Russian Federation, the Ministry of Education etc.

    The accreditation is certified by a Permit on the opening of the Company’s representative (branch) office within the Russian Federation and by a Certificate of registration of the Company’s representative (branch) office with the unified state register, issued by the State Registration Chamber.

    According to the current legislation, the Company acting through its representative (branch) offices shall be registered as taxpayer at the territory where it performs its business activity within 30 days after the beginning of this activity. The Company acting through its representative (branch) offices is also registered by the State Statistics Committee of the Russian Federation and assigned the appropriate codes according to the All-Russian economical activity classifier, as well as by the executive bodies of non-budgetary funds (the Social Insurance Fund, the Obligatory Medical Insurance Fund, the Pension Fund). The whole procedure usually takes about 45 days.

    Foreign citizens may freely choose their occupation and profession as well as freely use their capabilities and property in business activities and in other activities not banned by the law, subject to the restrictions of Federal Acts of the Russian Federation. Foreign citizens may perform labour activity provided that they have a duly executed work permit, and the employer, in his turn, may sign an employment agreement with a foreign citizen provided that he has a duly executed permit on employment of foreign workforce. Therefore, foreign citizens may work for a foreign Company’s representative office if both the employer and the employee have the permits mentioned above and if they have signed an employment contract.

    It should be also mentioned that foreign citizens staying in the Russian Federation on temporary basis may perform labour activity only within the subdivision of the Russian Federation where they are temporarily registered.

    The admissible number of foreign employees (the quota) of a foreign representative (branch) office is specified in the Permit on opening a foreign Company’s representative (branch) office within the Russian Federation issued by the corresponding accreditation authority. The current quota is five people, but it may be extended at the request of the Company’s representative office.