Since 1991 Russian law has turned 180 degrees. The current legal situation can only be understood as a result of this development and by giving due consideration to its starting point, the Soviet administrative regulations. This is usually a too great challenge for western legal experts. The more experienced Russian lawyers, however, usually lack sufficient knowledge of the conditions in the West in order to communicate effectively with westerners who are used to their own standards. “Eckstein and Partners” have eliminated this dilemma through the cooperation of law-yers from Switzerland, Germany and Russia.
It happens from time to time that the locally hired Russian Managing Director (CEO) of a subsidiary company mis-understands his position and he considers himself to be its owner. In order to maintain control over your own subsidiary, it is essential to carefully set out the rights and responsibilities of all concerned in the Statutes. Our lawyers will structure the internal organization of your company, taking account of both Russian company law and also the demands of your own specific requirements.
The termination of the activities of your subsidiary company in Russia is unfortunately subject to procedures simi-larly complex as those of its initial creation. In particular, the company needs to be cleared from the Register of Taxpayers. Our specialists will assist you in also concluding this last step in compliance with the regulations, there-by enabling you to return to the Russian market at a later time without any related risk.
The newly formed company needs to be equipped with the necessary funds in order to start operating in the Rus-sian market. Can the corporate base capital be used? How can funds be transferred to the company from abroad without adverse tax effects? Our lawyers will advise you on these and other issues which frequently arise in the early stages.
The search for staff is among the first tasks for a western business wishing to operate in the Russian market. The Labour Act stipulates substantial rights for employees. In addition, in old Soviet tradition, it is still subject to considerable documentation requirements for all matters relating to employees. As employees are now more fre-quently also able to secure their rights through court action, as a foreign employer you are well advised to adhere to the rules. We will help you find your way through this difficult area, especially when confronted with issues sur-rounding initiation and termination of employment.
Foreign employers as a rule require employment contracts of a limited duration; however, under Russian law this is only possible under exceptional circumstances. Our lawyers know how to create lawful time limitations. We also ensure that the employment contracts conform to the correct procedures and that the employment is correctly do-cumented. For instance: an entry has to be made into the Employment Register of the employee, a legally required register maintained by the employers, thereby containing all previous employment of each employee.
The Russian Labour Act contains a conclusive catalogue of reasons for termination. However, and in particular for senior staff, there are overlaps with company law, which, for instance, substantially simplify ending the contract with the Managing Director of a limited company. Here too, documentation such as the Employment Register is of great importance – a register maintained by all employers containing all employment of an employee during his entire life; the register must be returned to the employee at the end of his employment and this needs to be re-ceipted. Without presentation of one’s register no future employment is possible. An employee can therefore claim damages if as a result of not having received his register he is not in a position to find new work.
No foreign business can avoid applying for work permits for Russia due to the necessity to employ staff from its home country in order not to lose control over its Russian operation. The Russian Labour Office will initiate a pro-cedure to verify the necessity of employing foreign staff. If this is not handled carefully, there is a risk that the busi-ness will be instructed to hire locally in the domestic market.
Thereafter a permit must be obtained at Federal level from the Migration Office of the Ministry of the Interior author-ising the employment of a foreigner. The actual work permit is then issued in favour of the specific employee, also by the Migration Office of the Ministry of the Interior (however at the level of the members of the Federation, e.g. The City of Moscow). A number of documents relating to the employer (e.g. documentation on incorporation) and the employee (e.g. medical information) need to accompany the application.
Our “administration specialists” have mastered this three stage procedure and can obtain the required work permit within 4 to 6 weeks. In the context of employing foreign staff we would also be pleased to assist you in resolving the associated tax issues.
You should create the best possible position for yourself in your commercial agreements for the event of a legal dispute arising as a result of transacting cross-border business with Russian parties. In particular this concerns the applicable law and arbitration procedures. Our specialists know all the peculiarities of the arbitration courts and know which applicable law will offer you the most favourable position.
Russian civil law contains numerous peculiarities, which are difficult for western foreigners to deal with. Just one example: usually real estate issues are amongst the first that need to be addressed when starting up a business in Russia, as the subsidiary or representative office needs a business domicile in order to register its formation. Curi-ously, in certain circumstances even a simple rental contract requires state registration to become legally effective. Our lawyers know where foreigners need advice and support. With our assistance these issues will not become a problem.
Protecting one’s own trademark in Russia is one of the first steps that every business must take in order to secure one’s position in the Russian market. International registration in one’s home market in accordance with the Madrid Convention is no alternative, as for Russia we strongly recommend a trademark consisting of Cyrillic characters.
We will work very closely with the relevant Patent Agents in order to secure for you the required registration with the relevant office, “Rospatent”. In the fast moving Russian market rights to trademarks are frequently flouted. We will help you enforce your rights, whether through the courts or via the Anti-monopoly Committee, a special compe-tition authority.