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20 November, 2020

10 million for a residence permit in Russia: the Ministry of Economic Development is preparing a new offer for investors

The Russian Ministry of Economic Development has developed a draft law which proposes granting foreigners residence permits for investments. There are 5 options, the amount of investment is from 10 to 50 million roubles. But there is a condition that can push investors away.

Russia may start issuing residence permits for investments
Photo: Adobe Stock

The innovation should attract foreign investment into the country, accelerate the development of technology and create jobs with high wages. In our opinion, Russia is following the global trend. Many countries are hoping to compensate for the drop in GDP due to the crisis and the pandemic, so they are softening the conditions of existing programmes and developing new proposals for investors.

Amounts and investment options

The Ministry of Economic Development has not yet made the draft law publicly available. However, Ministry representatives say that there will be 5 investment options. According to their conditions it is necessary:

  1. To own business in Russia. If the company is Russian, the investor needs to increase its capital by 15 million rubles. If the company is foreign - by 50 million rubles. In both cases, the company must have worked for at least 3 years.
  2. Invest in existing businesses. The investor must invest 15 million or more rubles in any Russian company. He does not need to become a shareholder in the company. But the money can only be invested in a business that has been operating for at least 3 years, has paid taxes from 6 million roubles to the state and employed at least 25 people.
  3. To become an individual entrepreneur. The investor registers IP in Russia, invests in his business from 10 million rubles and creates at least 10 jobs.
  4. Hold government bonds worth RUB 30 million or more. Buy bonds at least 3 years before applying for a residence permit.
  5. To own real estate in Russia with a total value of 30 million or more rubles. The objects must have been owned by the investor for at least 3 years prior to submitting an application.

In 2020, a foreigner may apply for a residence permit in Russia according to a standard procedure. For this purpose, they first receive a temporary residence permit, and a year later they can apply for a residence permit. The applicant will have to collect a large package of documents, pass an exam in Russian language, history and law, and undergo a medical examination. It will be easier and faster to obtain a residence permit for investment.

What can scare away investors

The investor also needs to change his tax residence and pay taxes in Russia. If a resident spends more than 183 consecutive days in another country in the world, he will lose his residence permit in Russia.

Residence conditions may make the offer non-working and the demand for a residence permit for investment in Russia will be minimal. Our experience shows that the main goal of investors 一 is visa-free entry into the country. Only 5% of our clients plan to change their place of residence

Diana Alieva
Sales Director Immigrant Invest

For whom the innovation is designed

Wealthy citizens from the CIS countries may be interested in the offer in the first place. According to statistics from the Russian Ministry of Internal Affairs, from January to October 2020, 182,000 foreigners received residence permits. 70% of them are citizens of Tajikistan, Kazakhstan, Uzbekistan, Azerbaijan and Ukraine.

Citizens of "complex jurisdictions" may also constitute a significant proportion of applicants. These are people from countries in the Middle East and Africa, where living standards are lower than in Russia. The reasons may also be war or political instability.

Top managers, executives of large companies and businessmen are another group of foreign citizens for whom the changes are intended. In this case, the status is required not for permanent residence but for visa-free entry into Russia, for example, from China.

Why would a foreigner need to obtain a residence permit in Russia?

A foreigner with a residence permit is equal in rights to Russian citizens. The only restriction is that residence permit holders may not vote in elections.

Opportunities that a resident with a residence permit receives:

  • To move to live in Russia;
  • to enter Russia without visas and 117 other countries with which the Russian state has agreements on visa-free entry. These include Hong Kong, South Korea, South Africa, Brazil and the UAE.
  • Change your tax residence and pay taxes under Russian law;
  • obtain an obligatory medical insurance policy and receive free treatment in medical institutions of the country;
  • receive social payments and benefits such as pensions;
  • to work and study in the country without restrictions.

Since November 2019, a residence permit has been issued for life. A resident can apply for Russian citizenship through a normal or simplified procedure.

Under the normal procedure, the applicant must have lived in the country without a visa for at least 5 years before acquiring citizenship. Under the simplified procedure, there is no such requirement. Individual entrepreneurs and business owners in Russia can also receive a passport on preferential terms. The requirements for candidates are listed in Article 14 of the Federal Law of 31.05.2002 N 62-ФЗ "On Citizenship of the Russian Federation".

It is not yet known whether the simplified procedure will apply to residents with residence permits for investments.

In recent years, the Russian passport has gained popularity among foreign celebrities. For example, actors Gerard Depardieu and Steven Seagal, boxer Roy Jones and fighter Jeff Monson from the USA have received Russian citizenship. In June 2020, Natalia Oreiro, a popular Russian actress and singer from Uruguay, applied for citizenship.

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10 million for a residence permit in Russia: the Ministry of Economic Development is preparing a new offer for investors