Opening of representative offices of foreign IT companies

LEGAL DIGEST, NEWS \ 27.07.2021

The President of the Russian Federation signed a law obliging foreign IT companies to create a branch, open a representative office or register a legal entity in the Russian Federation starting from January 1, 2022.

This obligation is established in relation to foreign firms that operate on the Internet in the Russian Federation and are the owners of:

– a website and / or a web page;

– an information system;

– programs for electronic computing machines.

An access to the specified information resources has to be more than 500,000 users per day located in the Russian Federation, provided that one of the following requirements is met:

• Data on the information resource is provided in Russian or in the languages of the republics within the Russian Federation;
• Advertising aimed at drawing the attention of consumers is distributed on the resource;
• Foreign person processes information about users located in the Russian Federation;
• Foreign person receives funds from Russian individuals and legal entities.

The new provisions will also apply to hosting providers, advertising system operators and organizers of information dissemination on the Internet.

In addition to opening representative offices, a foreign legal entity is obliged to register a personal account on the official website of the Federal Service for Supervision in the Sphere of Telecom, Information Technologies and Mass Communications (abbreviated in Russian as “Roskomnadzor”) and send there an application for the inclusion of information about them and its information resources in the list of persons operating on the Internet. The deadline for submitting an application is one day from the moment of registration on the website.

In case of non-fulfilment of the established requirements, the following coercive measures may be applied to a foreign company:

– Informing users of the information resource about the violation of the legislation of the Russian Federation by a foreign legal entity;

– A prohibition on the distribution of advertising on the Internet, including on the information resource;

– A restriction on making money transfers and accepting payments in favour of a foreign person;

– A prohibition on the collection of personal data;

– Partial restriction of an access to the information resource of a foreign company;

– Complete restriction of an access to the information resource.

In the matters of the registration of companies and the opening of representative offices, please contact the Acsour’s Legal Department. Our specialists are ready to advise you on this topic.