Foreign IT-companies obliged to open representative offices to operate in Russia

By the end of 2021, the Russian government plans to create a “digital residence” system for foreign internet companies and businesses from the IT sector. A similar practice already exists in the United States and a similar trend is observed in several European countries.

It is planned to adopt a bill that will oblige foreign companies with an audience of more than 100-500 thousand users in Russia to register legal entities and pay taxes in the Russian Federation. It is assumed that foreign firms will be able to register remotely through a personal account on the Federal Tax Service's website or create subsidiaries together with Russian companies, which will be responsible for the foreign participant.

The Government must submit the according law draft before August 1st. If the project is accepted, foreign services will have a month to apply for registration. Otherwise, they could face sanctions. The new legal requirements might affect Google, Facebook, Amazon, Wargaming, as well as other social networks and services.

Bellerage's legal and registration specialists can consult your company if it is concerned by the new law and help with any registration procedures in Russia.