Scaling Russia’s workforce challenge

January 15, 2019

Being one of the largest producers of crude oil, and home to the world’s largest natural gas reserves, Russia holds gargantuan opportunity for the oil and gas sector. This also means that many international oil and gas players open subsidiaries in the country.

But there may be a steep mountain to climb before reaping the benefits, especially when it comes to the workforce.

Base camp – legal

It would be easy to assume that setting up a subsidiary is where these challenges begin. But it’s not as complex as you may think. Registering a branch office in Russia takes a minimum of eight weeks to complete, and it can be a 100 per cent foreign owned entity. This means it can invoice local customers, sign local sales contracts and receive income from customers without any problems. The challenges lie deeper than this – Russia’s strict data protection laws.

Similar to the EU’s General Data Protection Regulation (GDPR), Russia’s equivalent is known to be just as complex and stringent. In many cases, international companies must fulfil the requirements of both the GDPR and local laws, even though they may be contradictory. These may seem like tricky steps to navigate, but with the right experience in implementing these data procedures, and a proactive approach, the peak may be closer than you think.

Ascending the talent hill


The challenge the recruitment industry faces is the contracted workforce ban. The new law was introduced in 2016 to rectify the lack of specific outsourcing regulation in Russia and has made it complicated to use a contracted workforce. In fact, contracted work is prohibited, but personnel provision as a service has obtained its legal form, and is still subject to legislative conditions.

Оne exception is to employ personnel through private employment agencies. This is essentially a Russian legal entity that has passed a special accreditation to perform personnel provision. It’s crucial to ensure the agency has relevant expertise in recruitment and HR processes, in order to guarantee that personnel arrive safely and compliantly on-site when needed.

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Reaching the summit

Russia’s migration policies are actually quite lenient compared with other countries. This obviously depends on the individual and the reason for migration, but generally the process is easy to complete, especially if it’s for a highly qualified specialist. But if a deadline is not met it can often lead to the application being unsuccessful.

So, careful management of the process is vital. This can be designed specifically to trigger alerts which inform the applicant on deadlines. This helps to guarantee important deadlines are not missed – saving costs while ensuring compliant immigration services.

Russia may well have its challenges, especially when setting up a local business. But it is worth every application passed and time spent, as the country is booming with opportunities. With the correct team, experience, global reach and track record – the 360° summit view will be well worth the climb.


This post was written by: Larisa Katunina, Vice President – CIS at Airswift