The Kremlin has issued a decree that local government inspections of businesses in Russia should be decreased by 70 percent following complaints from entrepreneurs that local government administration checks were making their businesses inefficient.
The order reads: “The government of the Russian Federation jointly with the General Prosecutor of the Russian Federation: To ensure the inclusion in the legislation of the Russian Federation changes providing for the limiting the number of unscheduled inspections carried out by each authority control (supervision) in respect of legal entities and individual entrepreneurs annually (no more than 30 percent of the number of planned inspections envisaged by the annual plan of scheduled inspections of each body of control (supervision).”
There are exceptions – unscheduled immediate inspections can be permitted if initiated in connection with the harm or the occurrence of threats to life, health of citizens, harm to animals, plants, environment, objects of cultural heritage, as well as the threat of emergency situations of natural and techno-genic character, noted in this order.
In addition, the order instructs a reduction in the timing of an unscheduled inspection in respect of the legal entity or individual entrepreneur to 10 working days. The order is to be enforced from December 1 this year.
The Vice-Chairman of “Business Russia”, Andrei Nazarov, said, “The number of inspections went beyond the limits of reasonable. Many staff members are required to devote their time to the preparation of supporting documents for inspection, which paralyzes the company’s work. People have no time to do business.”
Chris Devonshire-Ellis of Dezan Shira & Associates comments “This is a welcome change and one that frees companies from the unwanted and unnecessary attentions of local authorities in local businesses in Russia and the associated, sometimes financial aggravation. It is a pull back by the State from private corporate business affairs and in line with President Putin’s directive to increase and better support Russian entrepreneurs. Such steps are to be welcomed.”
Chris Devonshire-Ellis is the Founding Partner and Chairman of Dezan Shira & Associates. He is based in Europe. The firm provides European businesses and governments with strategic, legal, tax and operational advisory services to SMEs and MNCs investing throughout Asia and has 28 offices across China, India and the ASEAN nations as well as St. Petersburg and Moscow. Please contact the firm at email@example.com or visit the practice at www.dezshira.com
Dezan Shira & Associates´ Russian investment brochure offers an overview of the services provided by the firm – both foreign investment into Russia and Russian investment into Asia. It is Dezan Shira´s mission to guide investors through Russia´s complex regulatory environment and assist with all aspects of establishing, maintaining and growing business operations in the region.
In this issue of Russia Briefing, we explain the basics of business set up for foreign investors, from trademark registration, representation, trading mechanisms, and manufacturing. With low corporate tax rates, Russia is set to become the most dynamic of the trade corridors opening up to Asia.