Foreign IT companies are required to open branches in Russia

article 23/07/2021

Federal Law No. 236-FZ dated 01.07.2021 establishes the procedure and conditions for foreign persons to operate on the Internet in Russia using information resources with an audience of more than 500 thousand Russian users per day.

In accordance with the law, the owners of such information resources, which are mainly large foreign IT companies, are obliged to create branches, representative offices or register Russian legal entities that will be able to fully represent interests of parent organizations and interact with Russian supervisory authorities. Such obligations also apply to hosting providers, operators of advertising systems and organizers of information dissemination on the Internet.

The Federal Service for Supervision of Communications, Information Technology and Mass Media (Roskomnadzor) has been instructed to implement measures to encourage the above-mentioned foreign companies to comply with the requirements of Russian laws. Among these measures are:

  • informing users of information resources about violations of Russian legislation;
  • prohibition of advertising such information resource internally and externally of the resource;
  • restrictions on transactions to such internet resources;
  • banning search results;
  • prohibition of collection and cross-border transfer of personal data;
  • partial restriction or complete termination of access to such information resources.

The law came into force on July 1, 2021.

According to the Information and Analytical system Globas there are over 4 thousand branches and 9,800 representative offices of foreign companies operating in Russia. In addition, there are over 14 thousand legal entities with 100% ownership by foreign companies. Here you can find our review devoted to their activities dated 09.06.2021.