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Fundamentals of legal support for foreign business

Fundamentals of legal support for foreign business

PUBLICATIONS \ 03.07.2020

Compliance with national legislation is always one of the key issues that foreign company’s chief executives set when scaling up their business in new jurisdictions. After all, creating a legal entity or a branch in Russia and managing them by foreign participants requires a deep insight of the market conditions and the specifics of applicable laws.

Russian legislation contains many special characteristics that should be taken into account when carrying out business operations, but they are not always obvious from a literal interpretation of the law. Omission of these characteristics may slow down the development of the organization to the point of complete suspension of its activities, as well as cause the organization to be held liable.

Unfortunately, it is almost impossible to cover all aspects of Russian law at once. Today we would like to draw your attention to 6 principal aspects that are relevant at the initial stage of entering the Russian market.

1. Corporate law. Corporate matters will inevitably arise from the moment of organization’s founding to the process of its liquidation: choice of the right legal corporate form, procedure for management of organization, procedure of approval of transactions, creation of the executive and supervisory bodies in the organization, procedure for decision making – these and many other aspects require a solution. Well-chosen approaches set a successful vector of company’s development and allow their participants to exercise control over the organization’s activities.

2. Tax legislation. Every country has its own special characteristics of the tax legislation, and Russia is no exception. Receiving professional support in the field of taxation, the company’s founders can be sure that all potential tax risks are taken into account and analyzed.

3. Migration legislation. Often, Russian legal entities with foreign participation need foreign specialists owing to the specifics of the organization’s activities and vast experience of such specialists.  Compliance with the requirements of migration legislation will allow the organization to ensure uninterrupted operation of the organization’s employees who are foreign citizens.

4. Employment legislation. Even if all employees of an organization with foreign participation are citizens of the Russian Federation, compliance with all the subtleties of employment legislation will allow to avoid potential disputes with employees, administrative liability, and successfully pass any checks of the State Labour Inspectorate of the Russian Federation.

5. Legislation on personal data processing. Today, every organization processes personal data of its employees and contractors. However, not all companies carry out processing in accordance with Russian legislation and corresponding international agreements, which may cause such organizations to be held liable.

6. Interactions with state authorities. In practice, disputable situations often arise when an organization is obliged to interact with  state authorities on various issues. For example, a state authority may require the submission of information about a company, assess additional tax, impose administrative liability, or conduct an unscheduled audit of the organization. In order to minimize the financial and temporary losses of the organization and protect the interests of the organization, Acsour recommends that you carefully study the grounds for the requirements of the state authority, as well as the conditions for their implementation.

The organization of internal and external processes according to national legislation is one of the components of the success of a Russian company with foreign participation.  To solve such issues, new participants in the Russian market are recommended to contact a team of qualified specialists. The Acsour team helps its clients to solve complex issues in various fields of law on a daily basis with minimal time costs. Acsour’s long-term experience confirms that it is a comprehensive approach that allows clients to enter a new market without additional difficulties associated with the special characteristics of national legislation.

Alla Kipriyanova

Lawyer