Starting from August 24, 2021, amendments1 to the Federal Law “On Foreign Investments in the Russian Federation” regarding the procedure for accreditation of branches and representative offices (RO) of foreign legal entities will come into force:
1. Shortened accreditation period (the period for decision-making by the authorized body)
The terms of accreditation of a branch and RO of a foreign legal entity are as follows:
-
No more than 15 business days from the date of the documents’ submission – for a branch/RO of a foreign legal entity that does not carry out activities in the field of civil aviation;
-
No more than 20 business days from the date of the documents’ submission – for a branch/RO of a foreign legal entity operating in the field of civil aviation.
- Not all required documents are submitted;
-
The submitted documents do not meet the established forms, formats or requirements for their execution.
List of absent documents (documents that were not provided by the applicant);
-
List of the documents that do not meet the established forms, formats or requirements for their execution;
-
The deadline before which the applicant must submit the missing documents or properly executed documents.
The suspension is carried out for a period until its causes are eliminated, but not for more than 15 business days.
3. The updated list of grounds for a refusal to perform registration actions related to accreditation
The updated list of grounds for refusal includes:
- Failure to timely eliminate the violations that caused the suspension of registration actions;
-
Failure to comply with the deadline2 for applying for accreditation;
-
False information in the constituent documents or other documents of a foreign legal entity submitted for accreditation;
-
The purpose of establishing or opening a branch or RO (A) contradicts the Russian Constitution, international treaties of the Russian Federation, and Russian laws; or (B) threatens the sovereignty, political independence, territorial integrity, and national interests of the Russian Federation;
-
Termination of the accreditation of a branch or RO of a foreign legal entity due to gross violation of the Russian Constitution and international treaties of the Russian Federation;
-
Appointment as a head of a branch or RO the individual, in respect of whom there is an effective decision on an administrative offense with a penalty of disqualification, whereas the term of punishment has not expired;
-
Lack of authority of the federal executive body to make a decision;
-
The foreign legal entity has arrears totaling more than RUB 3,000 (including the available overpaid amounts for such mandatory payments) on the first day of the month when the accreditation application was submitted, considering the available information about their repayment on the date of receipt of the accreditation application.
Thus, the changes are aimed at optimizing and improving the accreditation procedure for branches and ROs of foreign legal entities, eliminating administrative barriers, and reducing the number of refusals of accreditation and their subsequent appeals. Generally, these changes will increase the attractiveness of the Russian Federation for investment by foreign companies3.
1Federal Law No. 27-FZ of 24.02.2021 “On Amendments to Article 21 of the Federal Law “On Foreign Investments in the Russian Federation”
2No more than 12 months after the decision to establish or open a branch or RO of a foreign legal entity in Russia
3Information from the official website of the Russian Federal Tax Service “How will the accreditation procedure for foreign branches and representative offices change starting from August 2021”, available at https://www.nalog.ru/rn77/news/activities_fts/10603472/ (in Russian only)