Russia » Economics

Fruits are money too

Russia opens the access to the legal entrepreneurship for non-citizens and refugees in the next year. Newcomers from the south of Russia and former parts of the USSR will be cared about by the Ministry of Taxation of the Russian Federation, who will start registering private businesses starting from the next year. Both citizens and newcomers will be able to pass such a registration by a simplified procedure and receive an appropriate EWLE certificate ("Entrepreneur without legal education").Candidates only need to be temporarily registered at their residency address. Moscow expects massive budget income from private businesses; however it is almost certain that considerable time should pass before those new businessmen become respectable taxpayers.

The Vice-Minister of Taxation Vladimir Mishustin explained to the press yesterday, that the new procedure for EWLE registration, which comes to action on the 1st of January 2004, will not create any barriers for foreigners, non-citizens and refuges. According to his words, these categories of entrepreneurs will only need to present their residential or temporary registration, together with an application form to be able to receive the EWLE certificate

It is to be reminded that on-application process of private entrepreneur registration starts from the coming year. It will take only five working days to receive a private business certificate. The simplified process of registration of companies has already been in use for 5 years. The practice shows that taxation people try to follow the timelines for issuing the certificates.

In regards to the newcomers, the current legislations describe the process of registering them as entrepreneurs with uncertainty. According to Mr. Mishustin, the present civil codex does not forbid foreigners and non-citizens to engage in private business activities in Russia. President's decree number 1482 states that entrepreneurs need only two documents for the State registration: an application form and a receipt for the registration fee paid. No other documents should be demanded according to this decree. However, regional registration offices in Russia demand passports also, seemingly not counting it as "other" document. As the head of the consultation department of ICLC audit consulting company, Sergey Chebotnikov says: "since this aspect was not clearly explained in sub-law acts, the executive level forced entrepreneurs to register at their residence address". The new federal law FL-76 "On changes and additions to the federal law "On the state registration" brings the registration procedure in conformity with the taxation codex, which allows non-citizens to become tax-payers.

In fact, this opportunity for non-citizens to register their businesses is not a new legislation, but rather a restriction imposed on executive power in the area of law creation. Andrey Nasonov, CEO for United Entrepreneurs Organizations of Russia, claims that "lack of opportunities for legal business lead to many breaches of law, massive unregistered business activity or registration under false documents"

It is worth noticing that the Moscow taxation offices are happy with the new law. The tax gatherings from physical persons consist the major part of the city's earnings, exceeding those from revenue tax, excise duties and even sales tax.

However, entrepreneurs themselves are skeptical about this new opportunity. As it was explained to the "News time" newspaper in administration of a Moscow market, "no market director will allow people to trade without entrepreneur registration certificate, because it is always checked by militia". Hence, most non-citizens usually register their businesses under Moscow residents documents. Others, building teams for instance, live in peace without any registration. So expectations of a flood of new entrepreneurs wishing to register a new business in Moscow are not fully supported.

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