Legal System and how it works:

Russian legal system follows statutory laws which are based on legislation unlike case laws which is based on judicial precedent. The main legal body of comprises of Constitution, Federal constitutional laws, federal laws, presidential decrees, governmental regulations, and laws of regional constituents of the Russian Federation.

Peter Gerendasi 2009, Doing business and investing in Russian Federation [online], Pricewaterhouse Coopers, Russia, p.7, Available

According to Legal system of Russia, the judiciary is divided into three branches; the regular court system which has the Supreme Court on top, the arbitration court system which has High Court of Arbitration on top, and the Constitutional Court as a single body without any courts under it.

In case of disputes between any business entities, the case is usually taken to arbitration court for trial.

Vladimir Davydov Legal system of Russia [online], Available from: http://www.uoregon.edu/~jbonine/review.html [Accessed: 25.3.2010].

According to the Russian laws, a Russian court cannot nullify a statute holding it unconstitutional. Vladimir Davydov further states that “upon motion of an interested governmental organization, it can hold a statute or an executive enactment unconstitutional, or give its interpretation of the Constitution.” When an issue of constitutionality of an act is raised during proceedings before a court, there is a rule that such a case is automatically referred to the Constitutional court.

Further, the Supreme Court of Russia has the right of legislative initiative and can submit its conclusions conceding the interpretation of laws. Its views are considered highly authoritative and always taken into account by lawmakers. The Supreme Court issues guiding instructions for lower courts on specific matters of law which are a binding upon all the courts, state agencies and officials who use such laws and hence it is treated as a source of law in Russia.

Vladimir Davydov Legal system of Russia [online], Available from: http://www.uoregon.edu/~jbonine/review.html [Accessed: 25.3.2010].

Government rules and regulations establishing business

The company needs to complete the following to be fully operable:

• production and registration of a corporate seal;
• register with the State Statistics Committee;
• register as a taxpayer;
• register with the Medical Insurance Fund, Social Insurance Fund and Pension Fund; and
• open bank accounts. Approximately it takes six weeks to fulfil such actions.

All records of a company must be made, expressed and maintained in Russian, according to Russian bookkeeping standards. No matter Russian or foreign each company which runs business in the Russian Federation, has an obligation to register with tax authorities.

Taxpayers must file tax returns monthly regularly and submit balance sheet quarterly to tax authority.

The founders when establishing a company enter into an agreement and take an obligation. The charter and the foundation agreement are the documents that are required to be filed with the registration authorities. The content and structure of these documents are determined by the Russian law.

Establishing a company in Russia [online], Available from: http://www.ruscham.com/en/rossinfo/db/13.html [Accessed: 25.3.2010].

Ownership of Business, Land and Office

Most land (unlike buildings and premises) is not privately owned, but held by federal, regional and local authorities. Owners of property built on state land may purchase the land, but many property owners prefer to lease land from the state instead.

Rights to real estate have to be registered with the State Register. In addition to registration with the State Register, the main technical and legal information on land plots (their measurements, boundaries, buildings standing thereon, etc.) must be recorded in the state land cadastre. Although the Land Code provides that if a building and the underlying land are owned by the same person, it is impossible to sell them separately, the land and the facilities located on it are treated as separate legal interests and may be owned by different persons. In general, Russian law neither imposes major restrictions on foreigners nor makes distinctions between foreigners, Russian legal entities with foreign interest and Russian legal entities/citizens in relation to ownership of land. Apart from land legislation requirements, a prospective developer has to comply with planning regulations that are rather complex and may differ depending on where the project is implemented.

Peter Gerendasi 2009, Doing business and investing in Russian Federation [online], Pricewaterhouse Coopers, Russia, p.16, Available

Labour/Employment Law

The Russian Labor Code outlines the right of employees. If a conflict arises, an employee can demand his right against the protective provisions of the Labor Code in court.The normal working hours in Russia are 8 hours/day and 40 hours/ week.

Foreigners entering the Russian Federation must have an identification document recognized by the Russian Federation. The enterprise which invites a foreign national must have obtained a permission to hire foreign employees and thereafter the employer must apply for the individual work permits with respect to each of the employees he is inviting.