The procedure for obtaining Russian citizenship for foreign businessmen will be simplified

By the Federal Law as of 01.05.2016 №124-FZ “On introducing amendments to articles 14 and 30 of the Federal Law “On citizenship of the Russian Federation” the amendments concerning simplified procedure of citizenship obtaining were being made. Under this procedure the permanent residence of citizen in Russia over a distance of more than five years is not needed.

According to amendments to the law, the individual entrepreneurs and investors operating in Russia for more than three years are falling into the category of citizens aspiring to the simplified procedure for obtaining Russian citizenship.

At the same time it is essential for individual entrepreneurs to pay taxes and charges, insurance deductions to the Pension Fund of the RF amounting to no less than 1 million RUB in each calendar year.

The essential condition for investors is participation in the authorized (contributed) capital of the Russian legal entity of no less than 10% and within the period of no less than three years running. The authorized capital of such legal entity is to total no less than 100 million RUB and the amount of taxes and charges as well as insurance deductions to the Pension Fund of the RF is to be no less than 6 million RUB in each calendar year.

This Federal Law will come into force on the expiry of ninety days after the day of its official publication. 

According to experts, such innovations can exert a certain influence on attraction of foreign investment to Russia considering its tax system as one of the most liberal in the world. 

The relevancy of the taken measures and efficiency of activity of enterprises with foreign participation may be estimated after getting acquainted with corresponding data of the Federal State Statistics Service (Rosstat) (Figure 1).

Figure 1. Number of enterprises (including micro-enterprises); Turnover (revenue without VAT, excise and similar statutory charges); Average number of employees.

The data analysis shows that enterprises with foreign participation in the period from 2011 to 2014 increased the revenue by 28% while the number of such enterprises decreased by 2% and average number of their employees increased by 1%.