- New Rules for Accreditation of Foreign Branches and Representative Offices in Russia
- June 9, 2014
- Law Firm: Dentons Canada LLP - Toronto Office
Federal Law of May 5, 2014 No. 106-FZ "On amending certain legislative acts of the Russian Federation” (Law 106-FZ) has changed the procedure for accreditation of branches and representative offices of foreign legal entities in the Russian Federation.
Law 106-FZ fills in the legal vacuum that existed with respect to foreign representative offices, which up until now, having nothing better to go by, have guided their activities according to the hopelessly outdated Decree No. 1074 of the USSR Council of Ministers, dated November 30, 1989. As of January 1, 2015, representative offices will fall within the regulatory scope of Federal Law of July 9, 1999 No. 160-FZ “On foreign investment in the Russian Federation”, which had previously applied only to branches, not representative offices.
The second major change implemented by Law 106-FZ is that, in place of the current system of two independent registers - the branch register and the representative office register - a new joint register will be created: the unified State Register of Accredited Branches and Representative Offices of Foreign Legal Entities. This register is to be established by the date that Law 106-FZ enters into force, i.e., January 1, 2015. It is planned that this joint register will be maintained by the Russian Federation Federal Tax Service, which is the same executive agency that keeps the Unified State Register of Legal Entities (also commonly known by its Russian acronym, EGRUL). We can therefore expect that the joint branch and representative office register will be created in a similar manner, and that the system of accreditation for branches and representative offices will mirror the current system for registration of legal entities.
Finally, Federal Law 106-FZ requires that existing representative offices and branches of foreign legal entities take certain steps to maintain the validity of their accreditation. Specially, they must do the following:
1) branches and representative offices whose accreditation expires in January 2015, and who wish to extend their accreditation, must request the extension of their accreditation in February, 2015.
2) branches and representative office whose accreditation expires in February-March 2015, and who wish to extend their accreditation, must request an extension during the 30 days prior to the expiration.
3) branches and representative offices whose accreditation expires after April 1, 2015 must submit information about themselves to the new branch and representative office register no later than April 1, 2015. Provided that this is done, their current accreditation will remain valid until its original expiration date. The Federal Tax Service has yet to determine the procedure and form to be used when submitting this information.
If these requirements are not complied with, the validity of the existing branch or representative office’s accreditation will expire as of April 1, 2015, or the original date of expiration, whichever is earlier.
In light of the above, we recommend that you arrange for the required information on your branch/representative office to be provided for entry into the State Register of Accredited Branches and Representative Offices of Foreign Legal Entities in a timely manner.
If you have any questions, please contact us. We will be happy to assist you in providing information to the State Register of Accredited Branches and Representative Offices of Foreign Legal Entities, as well as with extending your accreditation.