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UNCLAS SECTION 01 OF 02 MOSCOW 001676 
 
 
SENSITIVE 
SIPDIS 
 
FOR CA/FO, CA/VO, CA/FPP, EUR/RUS 
 
E.O. 12956: N/A 
TAGS: CASC CVIS PGOV RS
SUBJECT: Challenges of Doing Business in Russia: Visa Regime Changes 
 
Ref: (A) 07 Moscow 4974 
      (B) 08 Moscow 0218 
 
¶1.  (SBU) Summary:  Late last year Russia implemented a new visa 
regime which limits foreigners with business or humanitarian (i.e., 
students, missionaries, and individuals traveling for scientific, 
cultural, or sporting activities) visas to a 90-day stay in any 
180-day period.  Standard work permits, however, allow one-year, 
multiple entry work visas. As a result, more and more U.S. 
businesses are opting for such permits, which are subject to 
region-specific numerical quotas. Because the Moscow-region quota 
was recently reached, employees of some U.S. businesses have been 
unable to obtain a visa. The Government of Russia (GOR) has told 
companies that it plans to temporarily increase the quota in the 
next few months. Companies have noted that the same problem will 
arise next year unless GOR makes the quota increase both substantial 
and permanent. 
 
¶2.  (SBU) None of the companies interviewed believed the visa regime 
changes were particularly unfair or designed to push western 
businesses out of Russia. Nor did the companies interviewed claim 
they were specifically targeted by GOR in any other way. The 
complaints about doing business in Russia faced by both Russian and 
non-Russian firms were more about corruption and the overly 
bureaucratic regulatory framework.  End Summary. 
 
Russian Visa Regime 
 
¶3.   (U) In late 2007, the Ministry of Foreign Affairs (MFA) 
announced changes to the Russian visa regime (Refs A and B). 
Previously, holders of business and humanitarian (i.e., students, 
missionaries, and individuals traveling for scientific, cultural, or 
sporting activities) visas, similar to the U.S. B-1/2 visa, were 
allowed to stay up to 180 days at a time in Russia with the option 
of continual renewals. In October of 2007, GOR limited holders of 
business or humanitarian visas to a 90-day stay in any 180-day 
period. In essence the changes mean that foreigners with these types 
of visas are limited to no more than 180 days per year. When the 
rules were clarified in January 2008, GOR explained that the rules 
did not apply to work permits, which allow employees of foreign 
businesses to obtain one-year, multiple entry visas. In order to 
obtain a work permit, an applicant must have a contract with an 
employer that is registered with the Russian Federal Migration 
Service. 
 
¶4.   (U) When these changes were announced, some U.S. citizens 
expressed concern about the difficulty of continuing their Russian 
operations under these restrictions. The majority of complaints have 
arisen from missionaries, students, small businessmen, and 
consultants. These categories of visa applicants are either 
ineligible for a work permit or cannot afford the time and expense 
of obtaining one. Most large, well-established companies are already 
using work permits. Applying for a work permit can be a lengthy 
process, requiring the company to obtain employment authorization 
and the employee to have an approved physician certify that he or 
she is free of tuberculosis, HIV, and leprosy, among other diseases, 
and is not a drug addict. However, the primary concern with work 
permits relates to the quotas for applicants from outside the 
Commonwealth of Independent States. GOR only issues so many of these 
per year for specific areas of the country (the figure for the 
Moscow region is 105,000) and holders of a work permit in one region 
may not work more than a specific number of days in another region. 
 
Effect of Changes on U.S. Businesses in Russia 
 
¶5. (SBU) The direct effect of the changes on large U.S. corporations 
has been minimal because most employees already had work permits. 
Such companies often employ a large staff devoted to dealing with 
work permits and visa issues. An executive with Topcon, a U.S. 
subsidiary of a Japanese corporation, involved in the global 
positioning systems industry, said renewing work permits is 
relatively easy when you understand the process, and takes only a 
few weeks. In general, companies entering the Russian market do not 
find the process for obtaining work permits particularly 
burdensome. 
 
¶6. (SBU) The primary difficulty with work permits are the quotas - 
GOR issues only so many per year. According to recent media 
 
MOSCOW 00001676  002 OF 002 
 
 
reporting, the quota for the Moscow region is 105,000. As greater 
numbers of businesses apply for work permits, the annual work permit 
quota will be met even earlier. Already some foreign corporations 
have been unable to obtain work permits for their employees. Procter 
& Gamble (P&G), for example, said that it has eight employees 
stranded in the U.S. because the work permit quota has been filled. 
They were told that GOR plans to offer a one-time increase in the 
quota in the next few months. In the mean time, P&G has said it will 
use business visas (subject to the 90-day rule) as a temporary 
solution. The difficulty with such visas is that employees are 
unable to open bank accounts, sign leases, and enroll their children 
in school. An executive with P&G also said he knew that there are 
over 20 employees of TNK-BP in a similar situation. 
 
¶7. (SBU) The difficulty with work permit quotas will likely 
increase. The booming Russian economy and the burgeoning middle 
class are likely to draw more and more foreign businesses to Russia. 
United Airlines, for example, intends to begin offering direct 
flights between Moscow and the U.S. in October of 2008. Unless GOR 
dramatically increases the quota for work permits, demand will 
continue to outpace supply, which may limit the entry and expansion 
of U.S. and other international firms in Russia or require them to 
have a predominantly Russian staff. 
 
¶8.   (SBU) Comment: The MFA has maintained that the changes to the 
visa regime were designed to harmonize Russian visa regulations with 
those of Schengen countries. They apparently were not intended to 
limit or prevent U.S. businesses from operating in Russia. The 
numerical quotas, however, particularly with respect to Moscow, 
ultimately may have such an effect. In line with our previous 
reporting on this issue, we will continue to closely track these 
issues and monitor the effects on U.S. businesses. End Comment. 
 
Russell