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Employment in Russia

At a Glance:

  • Russia’s economy has greatly diversified in the last few decades, and there are now several attractive industries for expats looking to work in the country.
  • Acquiring a work visa is complicated and needs to be started well in advance of your arrival in Russia — however, the process is much easier if you are eligible to be a Highly Qualified Specialist.
  • Spending more than 183 days a year in Russia means you will be taxed as a resident i.e. at a rate of 13%.

Since the great time of change beginning in the 1990s, the appeal of working in Russia has skyrocketed in popularity. The transformation into a market-based open economy has had positive and negative effects for the population. However, as a whole, citizens and expats working in Russia have contributed to the country’s great economic upswing in the past decade.

Russia’s Main Economic Pillars

As in all industrialized nations today, most people working in the world’s largest country have found employment in the service sector, amounting to some 60% of the entire workforce. Industrial production is still going strong, though, with about 28% of employees working in industrial production and processing enterprises. Metallurgy is a special focal industry of the nation, as Russia is the world’s third largest exporter of steel. In recent years, the government has taken measures to make Russia’s IT sector attractive for foreign investors.

Seeing how the Russian Federation is a country of gigantic dimensions, it surely doesn’t come as a surprise that countless people make a living working in Russia’s resources sector. Producing, refining, and trading natural resources are some of the main channels of income for both the government and citizens.

However, the export of commodities such as gas or steel makes Russia’s economy somewhat vulnerable to global ups and downs, as the harsh effects of the global financial crisis of 2008/09 have made obvious. Nevertheless, Russia was able to quickly recover from those blows. It was able to return to a growing economy within one year, thanks to various countermeasures by the government and the Russian Central Bank.

The Expat Job Market in Russia

Working in Russia has long been a feasible choice for those expats looking to gain further experience in the construction and energy sectors. The latter in particular is highly lucrative for the country as a whole. Russia is the world’s second-largest producer and exporter of natural gas and, surpassing Saudi Arabia, the largest producer of oil. While these two cash cows are, for the most part, largely controlled by government-backed companies, expats interested in working in Russia’s energy sector might still be offered some interesting incentives. Furthermore, there is a steady need for construction and renovation in Russia, especially in cosmopolitan cities such as Moscow and Saint Petersburg.

Climbing the Career Ladder

If you are in the lucky position of having landed a job in Russia as an expat, chances are you will receive more than adequate compensation. The HSBC Expat Economics Survey 2014 found that expats working in Russia are ranked 13th of the world’s countries with the most dispensable income and highest gross earnings. This was not the only highly interesting result of the survey: over three-quarters of expats in Russia stated that considerations concerning their careers were pivotal in their decision of relocating here.

Employment in one of the largest expat domains — predominantly finance, energy, and construction — could also turn out to be a wise career step for you! With one-third of all expats working in Russia earning in excess of 250,000 USD annually, and many expat positions being in the management tier, it is certainly a lucrative option.

Social Security: You Don’t Have to Pay

As an expat in Russia you will be covered by a social security scheme that, while it may not be as all-encompassing as in your home country, covers all the most important aspects, from sickness to work injury and unemployment. This is perhaps the most interesting fact for every expat about to start working in Russia: only your employer is required to pay into the various social security and insurance funds. As an employee, you do not have any responsibility to contribute.

Work Permits for Russia

Securing a Work Permit: Employers’ Responsibilities

Russia’s immigration and foreign labor regulations are rather complicated and time consuming both for expats and their employers. You are well advised to plan ahead!

The first steps are entirely the responsibility of your employer and require their Human Resources department to plan well in advance. Almost a full year before actually hiring an expat, companies operating in Russia have to apply for corporate work permits for their future foreign employees. In the application, they are required to state both the position they intend to fill as well as the nationality of the expat. This information is binding: a company that has permission to employ an engineer from Italy cannot hire one from Taiwan instead.

Once the corporate work permit is secured, your employer has to apply for and secure your personal work permit. It surely does not come as a surprise that this permit only allows you to take up the specific job it was issued for. You can neither take up the same position at a different company nor work for a subsidiary of your company in another region in Russia. However, if your contract includes working in different parts of the country, your employer has to complete each part of the application for every region you will be working in. Needless to say that this will cause delays.

Acquiring a Work Visa and Final Red Tape

After receiving a letter of invitation from your employer, you can apply for a work visa at your nearest Russian consulate or embassy. They will also supply you with a list of all necessary documents. Always keep in mind not to accidentally apply for a business visa, as this is an entirely different category in Russian immigration law!

Within three days of your arrival, you need to register your address with the migration services. Luckily, your employer usually takes the responsibility of notifying local authorities. Your company also needs to notify the labor and tax authorities about your employment.

The work visa you acquired from your local embassy is limited to three months. Please check with the immigration authorities in Russia for an extension of your work visa, which is commonly issued for the duration of one year. This is a crucial step: never forget to keep all permits and visas valid, as failure to do so is not lightly tolerated in Russia.

Highly Qualified? Work Visa Exemptions

Not every employer and employee has to go through the entire process, though: there are work permit exemptions for employees in a number of fields. The most significant exemption for expats interested in staying in Russia for a longer period of time than, for example, for the montage and upkeep of machinery, is the work visa category for Highly Qualified Specialists (HQSs). To qualify for this permit, foreign specialists must be compensated with no less than 2 million rubles per year. The permit can be issued for up to three years.

Highly Qualified Specialists are required to have worked for three years before applying for a work patent. The salary of HQSs is set at 167,000 RUB per calendar month. HQSs working in the IT branch must earn at least 83,500 RUB per calendar month.

Changes for CIS Nationals

On 1 January 2015 the quota system limiting the number of work permits issued for a year was discontinued. It has been replaced with a new system with an easier procedure through which so-called work patents are issued.

CIS nationals should apply for a work patent within 30 calendar days of arrival in Russia. If they don’t, this will result in a fine of up to 15,000 RUB. From the date of receiving the work patent, the applicant has 60 days to find local employment. The work patent gives an individual the right to work free from quotas for up to 12 months and is renewable once. A CIS national has to confirm knowledge of the Russian language, history, and legislation of the Russian Federation within 30 days after applying for the work patent. This should be done by passing an exam on these topics; only then can the work patent be applied.

Taxation in Russia

As an expat, or rather non-resident, in Russia, you will be taxed on your income from Russian sources at a rate of 30%. However, you will be considered a resident under Russian taxation law if you spend at least 183 days in a 12-month period in the country. Then, all income, including that from non-Russian sources, will be taxed at a rate of 13%. The highly qualified professionals are once again an exceptional category: with this permit, you are eligible for the standard tax rate for residents from the beginning.

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    InterNations is the ideal networking site for me. I use it for private as well as for business contacts here in St.Petersburg. Great!

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