- Russia to simplify permanent residency applications.
- The foreign investment visa will have new criteria.
- The focus on the African and Middle Eastern investors.
The Russian Ministry of Economic Development announced new draft law pertaining the simplified procedure for the foreign nationals to obtain Russian residential permit. It should be noted, Ukrainian nationals can obtain Russian citizenship under the simplified procedure already without the need of the investment.
However, the new criteria applies purely to the foreign investors (excluding Ukrainian nationals). The draft law is expected to come into effect in Summer 2021.
The investors will have either invest in the Russian existing businesses or open new business on the Russian territory. The main goal of the new law is to simplify the way the foreign nationals can live in Russia. At the same time, the new simplified procedure does not fast track a path to the Russian citizenship. Hence, it is only a long term visa to reside in Russia.
Chinese nationals could be interested in the simplified procedure investment opportunities. Nevertheless, for the Western Nationals doing business in Russia is very risky. The business could be taken from an individual on the moments notice, including the accusations of the serious crimes.
If the business reaches larges scale, the profit is always shared with the Kremlin. The scenario includes the Kremlin representative sitting on the board, which leads to financial data access.
Moreover, the amount of the investment is on par with the German entrepreneurial residency criteria. The total capital outlay including all fees starts at the €360,000 ($426,839.04 US dollars).
According to the German guidelines the permanent residency is issues after successful stay of the 3 years and after 8 years of residing in Germany, the investor can apply for the German citizenship. This part differs from the new law proposed in Russia.
The Kremlin is interested in the medium and large sized foreign business investors. The minimum investment is 10 million roubles ($131,209.66 US dollars). The expected average investment is 30 million roubles ($393,628.98 US dollars).
In comparison in USA to qualify as an immigrant investor starting from 2019, a foreign national must invest without borrowing, the minimum qualifying capital amount of the $1,800,000 US or $900,000 in the high unemployment region. In Canada it differs province by province but an average is $500,000 Canadian dollars ($381,893.65 US).
Interestingly, the Kremlin is targeting the investors from the Middle East and Africa. The Russian embassies will start hosting events in Africa and Middle East to attract business investors to invest and reside in Russia.
There is a push to also attract the joint ventures between Russian and African companies. The aggressive campaign is expected to start in the 2021.
Nevertheless, the launch might have to be pushed back due to the Coronavirus pandemic. The second wave Coronavirus pandemic continues to be brutal around the globe, including Moscow.
The lockdowns continue and the number of infected with the Covid-19 continue to escalate. The vaccine is here, but all of the vaccines have not completed Phase 3 trials.
The Russian vaccine Sputnik V was approved in Russia prior to the due process completion. The Pfizer vaccine hoping to skip a step in the phase 3 trials.
Next week Pfizer is expected to petition US government to approve their vaccine under emergency measures. Hence, the approval could be without the full trials completion.
Russian population continues to be in decline and that is why Russia needs foreign investments as well. Coronavirus also has impacted Russian economy adversely. Additionally, the Western sanctions imposed on the large Russian corporations continue to have a impact on the Russian financial situation.