Contact Department for International Trade (DIT) Russia to help find tax and legal advisers before entering into agreements.
7. Legal considerations
The Federal law on foreign investment:
prohibits foreign investors from getting control, or substantial stakes in Russian strategic industries, eg in extraction and defence sector
specifies the conditions for foreign businesses investing in Russia cannot be worse than for Russian entities
protects investors against unfavourable changes in tax, customs and other legislation for up to 7 years
Russian legislation gives foreign investors a number of advantages to provide stability and legal protection for their businesses in Russia. The main advantages include:
recovery of damages resulting from illegal actions, or inactivity of government authorities, local government bodies or officials of these authorities
protection of property from seizure, including nationalisation or requisition
protection from negative changes in tax and customs legislation during payback period of an investment project
right to an unimpeded transfer of profits, income and other monetary sums from investments
Under Russian transfer pricing law a transfer price is subject to monitoring by the tax authorities. The tax authorities monitor prices to ensure that they are established for commercial purposes and not for the reduction of the tax burden.
You must take into account the regulations in Russia’s different regions. There may be significant divergences and contradiction in legal practice adopted by authorities and commercial courts.
7.1 Regulatory bodies
The State Chamber of Registration is the major registering authority for most legal entities operating in Russia.
There are a number of other government bodies with responsibility for foreign trade regulation. Certain types of business activity can only be carried out in Russia with a special licence issued by authorised licensing bodies. Licensing is carried out on a federal and regional level. You must seek the necessary approvals from the relevant body. Contact the Department for International Trade (DIT) team in Russia for advice.
7.2 Standards and technical regulations
GOST is the quality certification system in the Russian Federation and is the equivalent of the ISO 9000 series certificates for western companies.
GOST-TR is the approved quality indicator. Sample testing is necessary to obtain this certificate. These tests are made in accredited laboratories by GOSSTANDARD, theRussian standards organisation. SGS is the approved partner of GOST in the UK.
Packaging and labelling requirements for Russia vary significantly for food and non-food items. You must check the requirements prior to shipment.
7.3 Intellectual property
Russia is a signatory to major international treaties on intellectual property rights.
Patent protection is given for 20 years from the date of the application, subject to payment of annuities. Patent protection for medicine, pesticide or agrochemical products may be extended for up to 5 years with special permission.
The Federal Service for Intellectual Property, Patents and Trademarks (‘Rospatent’) has responsibility for intellectual property.