news and resources

News

Last updated: 03.02.2012

I do realise that visitors looking for useful information on this website would like to see some examples of my recent cases. Here are a few typical issues I have advised my clients in the past:

Purchasing additional stakes and appointment of new general director to a subsidiary company for electrical parts and equipment supplier.
Reliability and due diligence services on supplier of nickel wire from Vologda region of Russia for Central American metal trading company.
Agreement on equipment supply for an engineering company, manufacturer of cake production lines. Equipment will be installed in Vladimir Region of Russia by one of multinationals, the second largest food and beverage company in the world.
Reliability and due diligence services for Anglo-American Brand Identity & Design Agency on their trading partners from Siberian region of Russia before their entering into Contractual Agreement on Identity Development for Chain of Coffee Shops.
Agreement on buyout of the Russian language newspaper in London for international media publishing group.
Execution of a hotel interior design contract with one of the world's leading premier hotel companies in Russian city of Sochi in Krasnodarsky Krai, for interior design practice. Hotel is to be built before Sochi Olympic and Paralympic Winter Games start in February 2014.
Entering the Russian market, GOST & Russian Ministry of Health certificationand registration of medical device and equipment, for a manufacturer and supplier of infection control products.
Application of Russian law to End-User Software Licence Contract for a company delivering software solutions for pharmaceutical industry.
Resolution of Complexity in existing rules for organisation and registration of sweepstakes in Russia, for sales promotion agency.
Following necessary terms and conditions in the process of registration of reversed auction bidding in Russia, internet auction company.
Agreement on employment of company’s Russian contractor for research, development and programming of software products, hotel reservation software company.
Methods of "Invention" patenting in Russia for inventions development company; due diligence services related to their partner company from Russia; drafting and translation of Intellectual Property Rights Agreement.
Enforcement of agency agreement and resolution of dispute with Russian customer, creative design consultancy.
Market and industry research and analysis in Kaliningrad region; setting up a company to deal with the packing of food supplements in the Special economic zone (SEZ) in the Kaliningrad, rental of premises for company production, employment of 10 persons staff, customs clearance and certification of production, producer of food supplements.

Russian banks to give credit where it is due

December 08, 2011. Vladimir Ruvinsky, Russia Now. Reforms in Russia have made using a credit card safer, but attempts to make plastic more popular could be foiled by the Eurozone crisis.
Ivan Svitek, chairman of Home Credit and Finance Bank, once Russia’s leading retail lending institution, recently lamented that only 24pc of Russians take out loans and only 18pc have deposits with banks. Most Europeans use two to four financial products, and some five or six, but most Russians do not use any.
Home Credit is now the eighth-most successful lender and it wants to regain more market share. Mr Svitek believes that there is plenty of potential to expand the business in Russia if the bank reaches out to remote regions and embraces new technologies, in the way that McDonald’s does. Тhe statistics back Mr Svitek’s belief. According to the World Bank, Russia has a quarter of the global average number of bank branches. The International Monetary Fund says individuals’ debt to credit institutions is only 9pc of the Russian GDP (it is 85pc in the US). And, according to Rosstat, 44pc of Russians live in remote areas not reached by retail banks which focus their business in large cities. Even in cities, only 63pc of Russians use a bank service, according to polls by the Public Opinion Fund, mainly to pay for utilities and access salaries. ....›

Russian-British Creative Economy forum

October 01, 2011. The Russian-British Creative Economy forum brought together leading UK and Russian experts in the development of creative economy policy to build relationships between the two nations in this emerging area for business and cultural exchange.

Over a fascinating couple of days in Moscow (30 Sept - 1 Oct 2011) participants including policymakers, NGOs and academics discussed the experience of both countries, identifying similarities, differences and areas of common interest. ....›

Russia increasingly attractive prospect for UK companies

September 16, 2011. More UK companies could be persuaded to do business in Russia with inward investment in the country soaring.
Ernst & Young's maiden Russia attractiveness survey has revealed that foreign direct investment in Russia grew by 18% in the last year, with 200 projects worth approximately £23 billion, which should prompt optimism amongst foreign investors over attractive future returns.
Russia has more than doubled the number of overseas-backed projects in the last five years, while 70% of investors believe Russia will become an even more attractive prospect in the next three years. UK companies could profit from supporting Russia in developing its economy in key sectors like energy efficiency and financial services.
Investors cited the most attractive features in Russia, as the opportunities to sell to the country’s domestic market (75% of respondents). ....›

UK design services for export: how to become successful working with Russian client

July 28, 2011. A successful story of Russian-British collaboration in the area of design goes back to late 1990-s – early 2000-s, when such Russian brands (now among the most valued domestic ones, by the way) as Russian Standard Vodka (1998, Identica) and MTS (2006, Wolff Olins) were designed. That was the crucial moment, when the biggest Russian business entities from various industry sectors realised the power and value of the design and branding ‘made in Britain’. Soon it has become quite popular and prestigious for the emerging and established Russian businesses to reach out to the major UK design consultancies for the ‘design and branding services’. Since that time some large creative agencies such as Identica, Wolff Olins, Fitch, Claessens and SCG London have become the best-known UK design groups in Russia having some fruitful experience of collaboration with Russian companies in the area of the brand and design. But what about smaller niche agencies? Do they have any chance to make their mark and difference on the new unexplored yet attractive Russian market? “They absolutely do” — proves David Rogers, the owner and creative partner of a small Nottingham-based packaging and brand design consultancy We Are Pure. ....›

Russia in $10bn move to tempt investors

March 06, 2011. The Financial Times, Henny Sender in Paris and Catherine Belton in Moscow. The Russian government is setting up a $10bn fund to co-invest with leading international private equity firms in an effort to attract foreign capital to the country, and has asked Goldman Sachs informally to guide the project, according to people familiar with the matter.

Separately, Russia is also creating a committee to advise Dmitry Medvedev, Russian president, on transforming Moscow into an international financial centre. Members will include Goldman’s chief executive Lloyd Blankfein, Blackstone’s founder Steve Schwarzman, Jamie Dimon of JPMorgan Chase and Brian Moynihan of Bank of America, as well as representatives from BNP Paribas and UniCredit among others.

The $10bn fund initiative comes directly from Mr Medvedev, these people add. The firms that have been approached include Apollo Management, Blackstone and Carlyle among others, and each is considering its response......›

UK architects and engineers plan to participate in regeneration of St Petersburg

March 04, 2011. Gareth Ward Consul General, St Petersburg. This week a delegation from the St Petersburg city authorities and business is visiting London and Manchester. As well as exploring energy efficient building approaches in London, they will be meeting Manchester City Council to talk about how former industrial areas such as Salford Quays have been redeveloped. And they will be meeting a number of UK architects, planners and engineers who have delivered these projects.

The scope for regeneration in St. Petersburg is huge. Industry is moving out of the city centre and leaving behind brownfield sites which need the kind of integrated approach, with transport and social infrastructure, which has worked in Salford. As Europe’s 4th biggest city, and with a spectacular historic centre to showcase, St Petersburg deserves dynamic regeneration projects. UK companies are well placed to take part in that process. .....›

Russian Architects Face Western Competition

The ongoing construction boom in Russia has brought about a problem that only 10 years ago none of the experts could see coming. Russian developers maintain that amid the significant growth of the construction market and increase in the number of high-end, upscale projects, this country does not have enough talented architects. However, in a market environment a lucrative niche cannot remain vacant for very long, and this vacuum is now gradually being filled by foreign architects and designers ......›

Doing Business 2011: Making a Difference for Entrepreneurs. The Russian Federation.

November 16, 2010. Doing Business 2011: Making a Difference for Entrepreneurs. The Russian Federation, the eighth in a series of annual reports published by the World Bank and the International Finance Corporation.

The Doing Business report provides objective measures of business regulations for local firms in 183 economies and selected cities at the subnational level. The report does not try to assess broader questions of governance, such as macroeconomic policy or overall levels of corruption, even though these have a big effect on how easy it is to do business. What it does measure are the petty bureaucracy and onerous rules that can make life a nightmare for firms.

My expertise was kindly provided for "Starting a Business", "Enforcing Contracts" and "Employing Workers" sections of the report. Download

Legal basis for organisation, operation and government regulation of lotteries in the Russian Federation

May 18, 2011. The major law that establishes the legal basis for organisation, operation and government regulation of lotteries in the Russian Federation is “Law on Lotteries” (138-FZ, dated November 17 2003). Law defines the types and purposes of lotteries, procedures for controlling the organisation and operation of lotteries and liabilities of persons as well as companies for running and operating of lotteries. .....>

Development of gambling zone in the Kaliningrad region

A new Federal Law No 244-FZ “On State Regulation of Gambling and Introduction of Amendments to Certain Legal Acts of the Russian Federation” was adopted by the State Duma on December 20, 2006 and came into effect as of January 1,2007. This Federal Law prohibits gambling as well as determines that four gambling zones shall be established in the territory of the Russian Federation. All gambling houses were to have been relocated to the above-said four zones by July 1, 2009. One of four gambling zones Yantarnaya (Amber) is to be established in the Kaliningrad Region, Russia's Baltic exclave.

A zone total area will be 1170,029 ha including: 479,144 ha – hotel and gambling facilities; 690,885 ha – a recreational zone without any gambling facilities. Resorts & hotels with casinos – 16, resorts &hotels without casinos – 20, gambling machines – 20.000, gambling tables 800, rooms in the resorts & hotels with casinos - 18.800, rooms in the resorts & hotels with casinos 16.200. Gambling establishment planned to accommodate in one of the most beautiful places of the Kaliningrad region – between villages Povarovka and Okunevo which is further south than small resort town of Jantarny.

On the territory of zone it is intended to create six parks including one sports park, an oceanarium, a world travel park etc. It is also planned to build hotels with more than 30,000 rooms of which ten hotels allowing for gambling facilities, and 15 hotels with therapeutic treatment centres not allowing for any gambling establishments; as well as theatres, shopping and business centres, berths for yachts and other attractions.
Based on the findings of the site design documentation, the recreational gaming zone will be divided into 30 land plots with the necessary documentation prepared for each of them. Kaliningrad Regional Government abandoned their initial idea to sell land plots at an open auction and instead planning to let them out for lease.

For more information here is the link to the Kaliningrad Regional Government website page with gaming zone plans and Kaliningrad Regional Government Decree “On endorsement of “Yantarnaya” gaming zone territory planning for placement of capital construction objects of regional significance” .....›

Open Dialogue - a training programme for lawyers from the Kaliningrad region of Russia continues

The third stage of the programme has been successfully completed in Kaliningrad, supported by Foreign and Commonwealth Office in Russia, Global Opportunity Fund Sustainable Development Programme. 40 representatives of legal system of the Kaliningrad region (judges, investigators and barristers) were trained in mixed groups.Two seminar courses, were organized by the Kaliningrad Resource Informational Analytical Centre (RIAC) and held in April 15-19 and May 4-8, 2009 in Svetlogorsk, Kaliningrad region, Hotel "Baltika".

The European Standards of Human Rights and Public Justice in the Russian Federation - international conference

I was recently involved in planning and development of international conference – “The European Standards of Human Rights and Public Justice in the Russian Federation, innovation methods in the legal practice of the Kaliningrad region”, financed by Foreign and Commonwealth Office in Russia. Conference was held in November 27 - 28, 2008, hotel Heliopark Kaiserhof, Kaliningrad and attracted lawyers representing Supreme and Constitutional Courts of the Russian Federation, Russian Parliament, Human Rights Ombudsman of the Russian Federation, Russian Ministry of Foreign Affairs, Foreign Embassies, University of Nottingham Human Rights Law Centre, General Prosecutor Office, Federal and Regional Courts, Militias and Bar Associations. photo

Open Dialogue - a training programme for lawyers from the Kaliningrad region of Russia

I finished management of the second stage of the programme “Open Dialogue” – a training programme for lawyers from the Kaliningrad region of Russia in European human rights standards. In December 17 - 23, 2007 Russian delegation visited the University of Nottingham Human Rights Law Centre and met representatives of the British criminal justice system, including the Magistrates Court and Crown Court, Crown Prosecution Service, Barristers, Victim and Witness Protection and the Police. photo

The first stage of the programme was previously successfully completed in Kaliningrad, supported by Foreign and Commonwealth Office in Russia, Global Opportunity Fund Sustainable Development Programme and provided an intensive training from March - June 2007. It consisted of a number of seminar courses, organized by theKaliningrad Resource Informational Analytical Centre (RIAC), providing human rights training for practicing lawyers representing the Courts of General Jurisdiction, Military Courts, Militias and Bar Associations on European standards of human rights......›

Why it is worth making investments in Kaliningrad

The Kaliningrad region is the most western region, separated from the mainland of the Russian Federation. Due to its geographical and political location, especially after Poland’s and Lithuania’s joining the EU, the Kaliningrad region is gaining a new challenge of extending and developing co-operation with the European countries in various fields, first and foremost, in economics. This site of Kaliningrad City Hall give you very useful economic and legal information on investment environment in this region.

Adoption in Kaliningrad

Recently I have received a large number of queries about adopting children from Kaliningrad and Russia in general and decided to try and help people hoping to adopt. The following article translated into English gives you some background information on adoption in Kaliningrad and I am happy to help directly should you wish to commission my professional support. I can help with translation of documents through to full legal support with my partners in Russia. I can help guide you through the whole process as Russian legislation on adoption from abroad is complicated and you will need an English speaking Russian on your side......›

Information

Main Taxes Rates in Russia

Tax

Rate

Profits tax

20% of the profit – main rate

Simplified tax

6% (“revenue” base); 15% (“revenue less listed expenses” base)

Withholding Tax

Foreign legal entities are subject to a withholding tax

15% - dividends

20% - interest, royalties, rentals

10% - on income from freight and international transportation services rendered in Russia

VAT

18%, 10%, 0%

Property tax

2.2% of the annual average net book value of fixed assets

Excise tax

Determined by product

State duty for securities emission

0.2% of the nominal value of securities issue, but not more than 100,000 roubles (£ 2000)

State duty for using the Words “Russia”, “Russian Federation”

10,000 roubles ( £200)

Mineral Royalty tax

Depends of the minerals and deposits

Personal Income tax

Default rates – 13% for residents and foreign workers in the highly qualified expert category; 30% for non-residents; 35% prises

Insurance Contributions

The sum is not exceeding 415 000       roubles (£9430) – 34% , where :

Pension Fund – 26%

Social Security Fund – 2,9%

Federal Medical Insurance Fund – 2,1%

Territorial Medical Insurance Funds – 3%

Paying taxes in Russia for foreign/British residents

When you come to live or work in Russia, the Russian tax you'll pay depends on whether you have “resident” or “non-resident”status over there. Residents and non-residents paying taxes in case they receive income from the sources on the territory of the Russian Federation. Foreign citizen can be a tax resident of the Russian Federation if he resides on the territory of the Russian Federation not less than 183 days of the calendar year. Tax rates for residents and not residents are different. 13 % is for income received by tax residents; and 30 % is for income received by tax non-residents on the territory of the Russian Federation.

An individual who is a non-resident of the Russian Federation may be exempt from taxation by Russian tax authorities, provided that he introduces (forwards) to Russian tax authorities an official confirmation that he is a resident of the state that has double taxation treaty with the Russian Federation. Russia and U.K. has double taxation treaty from 1994 No. 3213. Thanks to that you can decide where you want to pay your taxes in Russia or in U.K.

In order to receive such exemption, an individual should submit to the Russian tax authorities a statement of income received and income taxes paid in the U.K. from HM Revenue & Customs. Application documents should be accompanied by proof of residence in the U.K., all apostilled and translated into Russian.

Law "On the Legal Status of Foreign Citizens in the Russian Federation" (Russian language) / Закон "О правовом положении иностранных граждан в Российской Федерации" (с изменениями на 19 мая 2010 года)

Defines the legal status of foreigners in the Russian Federation, and regulates conditions of their entry into and exit from Russia. It regulates relations between foreigners and state and local authorities in connection with the foreigner's temporary or permanent stay in Russia, including those related to foreigners' employment, commercial and other activities in Russia. Download

Travel rights for non-EU national family members of EU/UK citizens within the European Union

Neither the UK nor other EU countries such as Lithuania, Estonia, Latvia, Poland, Hungary, Slovakia, Czech Republic, Ireland, Cyprus, Slovenia, and Malta are currently signatories of the Schengen agreement that means in order to travel to another EU country members of the family of an EU/UK citizen should be required to obtain a visa. Such visas, where they are necessary, should be granted free of charge, and without undue formalities. This facilitated system of obtaining a visa will apply to non-EU national family members, however, only when they travel with an EU citizen. Download

Right of admission foreign/Russian spouse of a British national to the UK without the need to obtain entry clearance

In the case of a British national spouse/partner have been lawfully resident in the other EEA country before applying to enter the UK - it is not needed to obtain entry clearance. More detailed explanation of European law further.

Kaliningrad Visas

Kaliningrad operates a special visa system which allows visas to be issued at the border on arrival, thus avoiding Russian embassies abroad and complicated visa forms. The short-term tourist visas (for stays of up to 72 hours on the territory of Kaliningrad oblast only) to foreign tourists (citizens of countries of the Schengen Treaty, the United Kingdom, Japan) on requests of Kaliningrad tourist agencies, that are registered for consular services at the Representative Office of Russian Ministry of Foreign Affairs and have the right to issue short-term visas, but not later than 48 hours prior to a supposed entry of a foreign tourist. From January 2009 visas also can be extendedfor period of up to 3 days at the border check points.Download

Main Taxes and Duties Rates in the Kaliningrad region Download

Certificate of Origin in the Kaliningrad Special Economic Zone

This is a new process of obtaining Kaliningrad certificate of origin in correspondence with "Decision of the Government of the Russian Federation No. 171 of March 30, 2006 on the Endorsement of the Rules of Use of Criteria of Enough Processing and Issue of Appropriate Certificates for the Products of Processing of Commodities Imported under the Customs Regime of Free Customs Zone Applied in the Kaliningrad Region". Document contains an application form and list of documents which is necessary to submit while application process to Kaliningrad Chamber of Commerce and Industry.Download

Russian import duties

Find out the import duty for your product is possible in the "Applied Tariffs Database" of free European Union Market Access Database

Law on the special economic zone in the Kaliningrad region.

The new Federal law "On the Special economic zone (SEZ) in the Kaliningrad region" came into force on 1 April 2006.Under that law the new zone will be operational for 25 years. In the first six years entities will be exempt from the profit tax 100%, and they will enjoy 50% discount in profit taxes for another six years. In addition, investors will be exempt from the tax on organizations’ property for the first six years of their projects. But this is only for investors who bring at least one hundred and fifty million rubles of investment. They won’t have to pay customs duties on commodities brought to Kaliningrad for production purposes, as long as the commodities keep within the regional limits. Visa formalities will be reduced for investors. Companies which are registered before the law came into force have a ten-year long transition period and can use the old privileges. Privileges for them means that goods, manufactured in the Special economic zone (the fact that is verified by the certificate on the goods origin) and exported to the other countries and the Russian Federation, are exempt from Customs duties and other charges while going through the Customs and being cleared (except the Customs fees for drawing up the Customs clearance papers). Download

On submission of an investment declaration for SEZ resident

According to the Law № 16-FL “On the Special economic zone in the Kaliningrad region which come into force on 1 April 2006 the Government of the Kaliningrad region has approved a special form of an investment declaration for SEZ resident.

Now, with coming into force of the new law on SEZ, applicants forinclusion in the Registerof residents of the Special economic zone in the Kaliningrad region should prepare and submit the following documents:

·       an application in the free form, addressed to the Head of theAdministration of Special economic zone (Minister of Economics of the Kaliningrad region F.F.Lapin) on inclusion of the legal person into register;

·        copies of legal person’s foundation papers, certified by a notary;

·       a certified copy of the document, attesting that the legal person has been entered in the general State register of legal persons;

·       the certificate of registration by the tax authority;

·      the investment declaration page 1 page 2

·       the business - plan of investment project.

This package of documents can be sent by mail to the address: 236007, Kaliningrad, Dmitry Donskoy street 1 or be brought into the reception office of Ministry of Economics of the Kaliningrad region (within working day) office 428 (phone: 599 024).

Civil Code of the Russian Federation (Part One)

Part I of the Civil Code upholds such rights as the rights to own and inherit property; to engage in entrepreneurial activity; to establish independent legal entities; and the protection of intellectual property rights. Part I also defines concepts such as securities, contractual rights, and the power of attorney. Download

Civil Code of the Russian Federation (Part Two)

Part II of the Civil Code further expands on these new civil relationships, and contains provisions governing certain types of agreements and the rights to sign contracts, to rent property, to receive loans, and to be compensated for injury. Download

Map of Europe with the Baltic Sea Countries and Kaliningrad

to download the great map click here

Detailed Kaliningrad Region Map Download

Detailed Kaliningrad Town Map Download

Useful Links

www.russiatoday.ru - The Russia Today TV news channel - which broadcasts in English 24 hours a day to Europe, North America, Asia and Africa

www.rusemblon.org - The Consular Department of the Russian Embassy

www.ukinrussia.fco.gov.uk - British Embassy, Consulates, UK Trade and Investment Section in Russia

www.rustradeuk.org - The Trade Delegation of the Russian Federation

www.diligencellc.com - Diligence - leading business intelligence, research and analysis firm on Russian and Eastern European markets

www.kaliningrad.mid.ru - Russian Ministry of Foreign Affairs in Kaliningrad

www.rosoez.ru- Russian Federal Agency for the Special Economic Zones

www.kaliningrad-cci.ru - Kaliningrad Chamber of Commerce and Industry

www.kaliningradse.ru - Kaliningrad International Stock Exchange

www.riac.org.ru - Kaliningrad Resource Informational Analytical Centre (RIAC)

www.spbcci.ru - St. Petersburg Chamber of Commerce and Industry

www.mtpp.org - Moscow Chamber of Commerce and Industry

www.cci.lt - Vilnius Chamber of Commerce, Industry & Crafts

www.unitedpartners.ee - United Partners, one of my partners organisations, a rapidly developing Baltic investment bank

www.zakupki.gov.ru - Official Government Site on Tenders and Contracts in the Russian Federation

www.talentinvestors.co.uk - Talent Investors, Russian specialist executive search and recruitment consultancy, London

www.creativeindustries.ru - Creative Industries Agency is project and analytical agency with activities in creative economy sectors and cultural entrepreneurship in Russia

www.lawguru.com - Legal Knowledge and Attorneys Database

www.lawru.com - International network of experienced Russian lawyers and consultants

www.chukotka.org- Chukot Autonomous Okrug Administration website withformer Governor Roman Abramovich (now Chukotka Autonomous Okrug Duma Deputy (quite interesting), and more information is here