One of the major challenges a foreign company faces is the amount of paperwork it is confronted with when doing business in Russia. Russia is notorious for its bureaucratic business practices which manifest in huge amount of paperwork that accompany each operation a company executes. The challenge with the paperwork does not end when the operation in question is over. For the Russian bureaucratic system any operation only starts to exist once the paper is there, in fact.
So, what happens with this bunch of documents afterwards and why should the foreign companies care?
According to the Russian legislation all documents should be properly filed and stored in Russia both during the lifetime of the company and after the company is closed. Each type of document has its storage period regulated by a number of legislative acts (Federal Act N125 from 22.10.2004 and Federal Act N43 from 02.03.2016) and varies from 5 to 75 years to permanent storage.
But where do you store the documents when the company closes?
After the company is closed (which is a lengthy and complicated process in itself) the documents should be
- separated by their type;
- properly filed;
- deposited in specialized archives on the territory of the Russian Federation
- the documents of 50+ years’ storage require additional review and approval of the archive commission
The reason for this regulation is that counterparties of the company should have access to the documents in case of any claims even when the company is not operational. It is especially important for personnel documents – sometimes former employees have to request their documents many years after working in the organization for correct pension calculation.
If the documents are not stored and not deposited in an archive, the fines of up to 300 000 RUB (approx. 4 000 EUR) can be imposed (according to Articles 13.20 and 13.25 of the Code of Administrative Offences). This might also lead to a scrutinized investigation of the company’s activities and tax payments which usually lead to further fines and penalties.
The following chart represents main types of documents, storage periods, and the types of archives where they have to be deposited.
*Starting from 2016, personnel documents issued before 2003 have to be stored in the state archives for 75 years, after 2003 – for 50 years.
The whole process of documents’ inventory and archival usually takes from 3 to 8 months. Special consulting companies provide services of documents’ expertise and preparation for the archive in compliance with all regulations and standards. Some of these companies also serve as private archives and can store temporary documents until their expiry dates.
Whether the process takes 3 or 8 months depends on the way the company files and stores its documents from the first day of its operations in Russia.
Svetlana Shishakova, Partner, Lighthouse Russia B.V.