The government may oblige foreign IT-companies to open representative offices in Russia

The government of the Russian Federation has taken the legislative initiative to create a specialized system of «digital residency», under which foreign companies operating in the field of information technology are planned to be obliged to undergo the registration procedure with the tax authorities.

The above requirement will apply to those companies from IT-sector that meet the following criteria:

• place of incorporation is foreign jurisdiction;
• company’s audience is more than 500 000 users in Russia.

Such a measure is taken to equalize the legal status of Russian IT-companies that are required to pay taxes and fees in the Russian Federation, including VAT, with foreign companies. Besides, it will be possible to complete the registration procedure in 2 ways:

• remotely in the personal account of the Federal Tax Service;
• by establishing a subsidiary on the territory of the Russian Federation.