Who can apply for residency?
Everyone. No matter where you live, no matter what your age is, you can apply for residency just because you want it. As long as you can prove that you have a place to live in Russia and that you can support yourself, you will get it, sooner or later. People who plan to live in Russia for the long-term and who will spend at least six months per year in Russia should consider applying. Once you get it you must live here six months a year or you will lose it.

Residency is granted in two steps. Temporary Residency is granted once for a period of three years. At any time after the first year of Temporary Residency you can apply for Permanent Residency. Permanent Residency is granted for a period of five years. This can be renewed indefinitely or converted to citizenship.

For whom does this make sense?
If you aren’t reasonably sure that you will be living in Russia for the foreseeable future, it doesn’t make a lot of sense to become a resident. But if you are here for the long term and plan to earn money or have a business, being a registered resident gives you tremendous financial, legal, and eventually time- and aggravation-saving advantages.

First of all, residents do not have to bother with work permits. Temporary residents can change jobs at will, if they stay within the same “Subject of the Federation,” meaning the same legally defined area of Russia. These “Subjects” vary in size from oblasts and republics to, in the case of St. Petersburg and Moscow, single cities. Residency Permits are issued based on where you live. If you become a temporary resident of Moscow City you can work at any job in Moscow with no work permit needed, but you can’t work outside the city. Once you become a permanent resident you can work anywhere.

Also, residency allows a foreigner to work legally as an independent contractor. (Let’s not forget it is a criminal offense to do contract work if you are not registered as an independent entrepreneur).

Once registered as an independent entrepreneur, you may be eligible for a simplified system of taxation that can save you a lot of money and loads of aggravation. If you have an annual turnover of less than 20 million rubles (about $750K), you can use this system to vastly reduce your tax and simplify your accounting requirements.

Even if you are currently working as an employee, you can save the company you are working for a lot of money by providing services to it as an independent contractor instead of as an employee. Not only will the company save a large amount on social taxes but also you will enjoy six percent taxation instead of thirteen percent. This is a huge savings.

Finally, and perhaps best of all, permanent residency means you’ll never have to go through the hassle of getting a visa again. Temporary residents still need to get a visa each time they want to exit and enter Russia, but don’t need visas to live and work here. These single-use visas can be obtained in Russia at any time and are good for the entire period of residency (or until used). By applying for a new visa each time you return to Russia you will always have a valid exit/entry visa on hand for trips on short notice. Once you become a permanent resident, you can come and go as you please with no visa.

Many employees and contactors prefer to work unregistered in Moscow because they feel safer, believing the authorities can’t track them. Is this a wise way to feel and act?
Everything in this world has costs and benefits. Of course working below the radar screen allows you to earn black money and pay no taxes. However, not paying taxes in post-Yukos Russia isn’t really a good idea, and with personal tax rates as low as thirteen or even six percent, the tax burden is not too much to ask.

Furthermore, working as a contractor without having registration as an entrepreneur is a criminal offense for both Russians and foreigners. If you are a foreigner working as an employee without having a work permit, and get caught, it could get you deported and refused entry in the future. Although I don’t know of any Americans or Europeans who have been deported for working without a work permit, it is only a matter of time. I have seen visa applications rejected because the authorities became aware that someone who was requesting a multi entry commercial visa was really working here and not just here on business. As time goes on the authorities are getting more coordinated and they are starting to enforce labor and visa laws more strictly.

Most importantly, if you are here for the long term, it just makes sense to protect your right to be here. If a boss or a competitor wants to get rid of you, and your papers are not in order, you are either gone or a prime candidate for a shakedown. It’s always a good move to make it hard for people to cause problems, and to do this you must be properly registered and legal.

Can anybody apply for residence? Are there any quotas or restrictions?
Russia has a quota for the number of temporary residence permits it issues every year and everyone who wants permanent residency must first obtain temporary residency. The quota for 2006 is 26,450 and it is divided among the subjects of the Federation. Moscow City is allowed just 1,000. In comparison, the Moscow Oblast has 6,200.

Those born in the USSR or Russian Federation, married to a USSR or Russian citizen, or making certain types of investments in Russia are eligible to apply for temporary residency whenever they want, with no concern for quotas. The rest can only start to apply for temporary residency if the year’s quota for their region has not been filled.

Can people buy their way into the quota?
Officially no, but practically speaking, it seems sometimes they can. People who did not use our firm, but who began the process rather late last year, have told me that they were informed they would not make the 2005 quota for Moscow. However, they were offered places in Moscow’s 2005 quota for $3,000 a person. To avoid disappointment (and this shakedown) apply early. Every new year, there is a new quota. If you apply early enough in the year, you will get in that year without people asking for bribes. And once you are in as a temporary resident, you do not have to worry about quotas again.

Where does one apply for residency permits? Are the people helpful who work there?
You apply at the Passport and Visa Department (PVU) on Bolshoi Ordinka. Once your application is accepted you get permission to take required medical tests at the state clinics. After you get the results, you go to the PVU office on Pokrovka, submit the results and application, and wait six more months.

As for helpful, have you ever seen the movie Oliver? “More? More?! You want more???!!!” Just substitute the word “help” for the word “more” and you’ll have a good idea about the customer service there. There is no customer service.

How long does the application process take?
It takes “forever” to assemble and submit an application (anyway, it feels like forever). Application lines start forming at 4 AM every day and applications are frequently rejected for no good reason, even if they are identical to applications previously accepted. Your success rests on the whim of the reviewer behind the window. If refused, your application will need to be revised and resubmitted, only, perhaps, to be rejected again.

Allow one year from the day you start to assemble documents, six to nine months from the day they give you approval to sit for the tests. And that’s only if you sneak into this year’s quota or are exempt from it.

And what about documentation?
There are so many documents required it would be boring to list them all, but many are very time consuming to get. For example, one single document—proof of no criminal record—can take weeks or months to obtain from your home country, and you often have to travel there to start the process. In the States you have to get fingerprinted by the police, have the fingerprint card mailed off to the FBI, and then have the FBI’s answer about your criminal record (hopefully the lack of one) apostilled, which is an international certification. Applying for residency and proving that you are not a detriment to Russian society is a very long process.

Can the average person survive the process of applying for Russian residency?
Only a jobless person with nothing else to do, who enjoys being treated rudely and being given the runaround, should attempt this on his own. Anyone with a job should let the professionals handle it. It is so time-consuming that doing it on your own will be disruptive to your work and the aggravation just isn’t worth it.

As a law firm, we have done this many times, and we are very helpful, but we are not the cheapest people on the market because there are differing degrees of service and we will either do the entire process or nothing. For example, there are plenty of firms that will offer to help you fill in the application, and charge you only $500. But filling in the application is the least of your problems; getting the application accepted is the largest problem. Every step in the process of obtaining the documents that must be submitted with the application and going through the process after submitting the application presents its own problems; scheduling the medical tests, going to the tests prepared (bring your own bottle), finding the state clinics and the right rooms in the clinics, getting fingerprinted by the police (this time in Russia), and getting the registration stamp applied in your passport is each a separate ordeal. The time involved is horrendous. You may stand in line for seven hours just to submit your first application, which may be refused for no good reason.

In our view it is better to limit our practice to doing the entire process of obtaining temporary residency, which is not cheap but ends with a happy client, than to do only part of the job and to have the client run into problems (which are 100% guaranteed) and then blame us for them. We end up charging, on average around $6,000 to help someone, from start to finish, with this process, and this is all in billable hours. Think of the time that this represents! and that’s when you know what you are doing!

Is there a website or resource with more information?
Many law firms provide some detailed information on their websites about the process and the documents required, although we do not because we only handle applications for temporary and permanent residency if we can do the entire process. When we are hired we shepard our clients through the process. You can try www.myadvocat.ru, which can be read in English.

In the end, is it worth it?
Yes it is worth it to apply for temporary and then permanent residency if your life and work is in Russia. For those of us who are here for the foreseeable future, residency is worth all the hassle it takes to get it. Plus, as with many things here in Russia, you must not only look at the advantages something will bring you, but also the unpleasantness it will help you avoid.

Jamison R. Firestone is Managing Partner for the law firm of Firestone Duncan. A graduate of Tulane University, 1988, and Tulane Law School, class of 1991, Mr. Firestone was born in Los Angeles in 1966, raised in New York, and received his higher education in New Orleans. Mr. Firestone is a member of the New York Bar. He has lived in Moscow since 1991 and founded Firestone Duncan in 1993 to serve the needs of small and midsize businesses. Mr. Firestone has extensive experience structuring the Russian operations of foreign companies and joint ventures. He is a member of the Board of Directors of the American Chamber of Commerce in Russia and Co-chair of its Enterprise Development Committee.

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