Insurance premiums and taxes for non-residents (2020)

Can a foreigner be an individual entrepreneur in Russia?

Yes it is possible. Thus, in accordance with Federal Law No. 115 of July 25, 2002, when staying on the territory of the Russian Federation, foreigners are endowed with the same rights as Russians.

According to Federal Law No. 129 of August 8, 2001, state registration of a foreign individual entrepreneur is carried out according to documents about his place of residence (“registration”). This may be a residence permit in Russia (RP) or a temporary residence permit (TRP).

In addition to a foreigner who is a tax resident, a non-resident of the Russian Federation can officially open an individual entrepreneur and start a business . However, if the latter does not have temporary registration, this cannot be done.

You will find the specifics of hiring foreigners with temporary residence permits and residence permits in another article.

Tax non-resident status and citizenship

You can often find misconceptions and disputes that the status of “resident/non-resident” is associated with the presence of Russian citizenship. However, here we should take into account the fact that tax and currency legislation differ, representing different branches of legislation and defining these concepts differently.

In accordance with the provisions of Federal Law 173, non-residents are individuals who are citizens of the Russian Federation, but permanently reside in a foreign country for at least a year. These include individual entrepreneurs. In addition, non-residents are foreign citizens who do not have a residence permit in Russia.

When determining the tax status of an individual entrepreneur, it is necessary to be guided by the provisions of the Tax Code of the Russian Federation, and not by the concepts of Russian currency legislation.

In accordance with Article 207 of the Tax Code of the Russian Federation, the status of a non-resident is in no way connected with the presence or absence of Russian citizenship of an individual entrepreneur. It was said above in which cases an individual entrepreneur, regardless of his citizenship, is recognized as a tax resident.

Thus, a foreign individual entrepreneur may not have a residence permit in the Russian Federation and be a foreign currency non-resident, but at the same time permanently reside in Russia for at least 183 days during the year and be a tax resident. This means that a foreign citizen individual entrepreneur will pay taxes at resident rates. If the condition of permanent residence in the Russian Federation during this period is violated, the individual entrepreneur becomes a tax non-resident. Obligations to pay taxes last have their own characteristics.

Requirements for opening

State registration of a foreign person as an individual entrepreneur is carried out when the foreign person provides one of the following documents to the local tax office:

• Residence permit (residence permit) in the Russian Federation. According to this document, a foreigner chooses any suitable region of the Russian Federation for doing business.
• Temporary residence permit (TRP) . Non-residents with a temporary residence permit are registered as individual entrepreneurs only in the region of the Russian Federation where this document was issued.

Otherwise, registration of individual entrepreneur status by a foreigner is the same as for citizens of the Russian Federation. However, first a foreign citizen receives a temporary residence permit or temporary residence permit. In this case, he goes to the following authorities:

• territorial branch of the Main Department of Migration Affairs of the Ministry of Internal Affairs at the place of registration;
• MFC;
• by mail.

After issuing a temporary residence permit or temporary residence permit, in accordance with clause 3 of Art. 8 Federal Law No. 129 of August 8, 2001, upon state registration as an individual entrepreneur, a foreign citizen applies to the Federal Tax Service of the Russian Federation at the place of temporary registration . At the same time, it performs the following actions:

1. Provides the tax inspector with the appropriate package of documents.
2. Selects the direction of business activity according to the OKVED classifier.
3. Selects a suitable individual entrepreneur taxation system.
4. Pays the state fee for state registration of individual entrepreneurs.

A visa is not a document that replaces a residence permit or temporary residence permit; as a result, without them - only with a visa permit - a foreigner cannot open an individual entrepreneur.

Does a non-resident have the right to register an individual entrepreneur?

Residents and non-residents have equal constitutional rights on Russian territory. The Civil Code states that an individual who has passed the state registration procedure can become an individual entrepreneur (IP). In the future, the individual entrepreneur cannot transform into a legal entity (LLC, OJSC, CJSC).

To register an individual entrepreneur, you must be over eighteen years of age and also be:

• Russian;
• holder of citizenship in a foreign country;
• a person without citizenship.

The advantages of IP are:

• low cost of opening;
• a small package of necessary papers;
• no legal address required;
• no need for authorized capital;
• simple document circulation and accounting;
• possibility of using simplification;
• It is not necessary to open a current account and issue a seal;
• if necessary, it is easy to close an individual entrepreneur.

Documents from non-residents

When registering as an individual entrepreneur, a foreigner provides the following documentation to the Federal Tax Service of the Russian Federation:

• application for state registration of a foreign individual as an individual entrepreneur (form P21001);
• a copy of your personal passport, birth certificate and other documentation indicating the specific place and date of birth;
• RVP stamp or copy of residence permit and originals of such documents;
• receipt of payment of state duty.

The foreigner sends the necessary documentation to the Federal Tax Service by a valuable letter or brings it in person. In a separate receipt, the tax inspector indicates the date of receipt of the certificate of state registration of the individual entrepreneur and the list of documents that he receives from the applicant for consideration.

A foreign citizen undergoes state registration as an individual entrepreneur only after full legalization of the necessary documentation. Along with the original documents, foreigners submit to the Federal Tax Service annexes with an accurate translation of all information into Russian.

Structure and rules for filling out the application

First, when registering as an individual entrepreneur, a foreigner fills out an application on form P21001. In such a situation, the applicant performs the following actions:

1. Fills out the application in a Word document in capital letters and in this 18-point font - Courier New. If filling out the document manually, the applicant uses a pen with black ink and writes in capital block letters.
2. On page 1 of the application, fill out your full name, TIN, gender, date, place of birth and citizenship.
3. On page 2 indicates the address of the place of registration and data from your personal passport.
4. Sheet A of the application reflects the OKVED codes by which he will engage in small business.
5. On Sheet B indicates the procedure for issuing documentation and your contacts. The applicant fills out the “full name” and “signature” fields only manually, with a pen with black ink and under the supervision of a tax inspector when submitting an application for state registration.

After filling out, the foreigner prints out application P21001 in 1 copy. Double-sided printing of such a document is prohibited.

We do not recommend completing the documents yourself. Save time - contact our lawyers by phone:

8 (800) 350-29-87Moscow

Documents for registering an individual entrepreneur as a foreigner in 2021

Important!

From November 25, 2020, the application form P21001 for state registration of individual entrepreneurs and the requirements for filling out this form have changed. If you prepare an application using the old form, the tax office will not accept it. Our free service will help you prepare documents according to the new sample.

To register as an individual entrepreneur, a foreigner must submit the following documents:

:

• Application on form P21001
  . Some fields can be filled out in a foreign language with mandatory duplication into Russian. When submitted by a trusted person, the application must be certified by a notary
• Original passport
  or document replacing it
  and its notarized translation
• A copy of a residence permit or permit to stay in the Russian Federation
  (usually a simple copy is sufficient, but it is better to check with your inspection in advance whether they need a notarized copy)
• A copy of a document confirming residence permit or registration
• Notarized power of attorney
  (if documents are submitted by an authorized person for you)
• A certificate of no criminal record
  will be required to open an individual entrepreneur with certain types of activities.

An example of filling out an application for a US citizen
If you have a receipt for payment of the state fee, it is also better to attach it, but the receipt does not apply to the required documents. If you must pay a fee, this must be done before submitting documents, but the inspectorate cannot refuse you just because you lack a receipt.

. Remember that from January 1, 2021, when submitting registration documents electronically, through the MFC or a notary, the state fee is not paid.

There are some specifics in providing an identity document for a foreigner. For Russian citizens this is a passport; for foreign citizens there may be another document: ID card (for Kyrgyzstan), DNI (for Spain), service passport (for citizens of Abkhazia, Belarus, Kazakhstan, Kyrgyzstan, Ukraine, South Ossetia), etc. If the country from which you come does not issue passports, but some other identification documents, check whether this document is equivalent to a passport in Russia

. This is determined by an international agreement between Russia and each specific country.

Important point: before submitting documents for registration, check whether your passport (or similar document) contains information about the date and place of birth

. If they are not there, be prepared for the inspection to request a birth certificate (or its equivalent). In this case, it is better to translate the certificate and prepare a notarized copy of the translation in advance.

The inspection will also check whether you have a residence permit or temporary registration

. When registering, Russian citizens do not require a separate document confirming registration, since the corresponding stamp is in the national passport. When staying in Russia for more than 7 days, foreigners are required to obtain temporary registration. If there is no at least temporary registration, it is no longer possible to say that you are in the country legally, even if you have a visa. In addition, you need to register with the tax office at your place of residence (that is, registration or temporary registration).

A criminal record certificate will be required if you plan to work in the following areas

:

• Provision of educational services
• Carrying out entertainment and entertainment events
• Provision of medical services
• Laboratory activities
• Work of libraries and archives
• Working with youth and children
• Organization of camps and recreation centers
• Provision of services in the field of sports and tourism
• Providing some social services, etc.

A complete list of activities for which you will need to provide a certificate

, Approved by Decree of the Government of the Russian Federation of April 16, 2011 N 285.
The inspection may require a certificate of no criminal record both in the Russian Federation and in the country of citizenship
. The inspectorate can request a certificate on Russia independently through interdepartmental channels, but obtaining it this way will most likely be delayed. Therefore, if you know that your type of activity will require this certificate, it makes sense to apply for it in advance. It is better to find out the procedure for issuing such a certificate in the country of your citizenship from the authorized bodies of that country. Usually, if a document is required urgently and it is not possible to leave Russia for it, it is possible to ask for a certificate at the consulate of your country and receive it through diplomatic channels.

How to register: procedure

Selection of activities

When registering as an individual entrepreneur, a foreigner selects the main type of activity according to OKVED-2 (OK 029-2014 (NACE Rev. 2)). However, it must be taken into account that for certain permitted types of activities it is necessary to first obtain a separate license. In Art. 12 Federal Law No. 99 of May 4, 2011 provides a complete list of such works.

In addition, a foreigner may not engage in business in all types of activities. In Art. 14 Federal Law No. 115 of July 25, 2002 and other similar legal acts indicate the following areas of labor activity prohibited for foreigners:

• civil service;
• defense and military-industrial complex;
• work in a bank;
• work on the securities market;
• sale of various medicines;
• sale of alcoholic beverages;
• trade in weapons, various types of ammunition, aviation and military equipment;
• organization of various gambling games;
• power supply.

Each type of activity from OKVED has its own insurance tariff, tax and tax rate, possible benefits and the need to provide additional certificates

What taxes must be paid and is it possible to choose the simplified tax system?

For 1 month. After submitting an application for state registration of an individual entrepreneur or on the same day, the foreigner submits to the Federal Tax Service a notification about choosing one of the following taxation systems:

1. General (OSNO).
2. Patent (PSN).
3. Simplified (USN).
4. UTII (Unified tax on imputed income).
5. Unified Agricultural Tax (Unified Agricultural Tax).

The table below provides a comparative description of each taxation system for a foreign individual entrepreneur.

When choosing the required tax regime, you need to keep in mind the difference between residents and non-residents of the Russian Federation. After all, a tax non-resident is a foreigner who has lived in Russia for at least 6 months. for 1 year. A non-resident individual entrepreneur of the Russian Federation pays personal income tax equal to 30% to the budget, while a resident pays only 13%.

Payment of state duty

According to Part 6, Clause 1, Art. 333.33 of the Tax Code of the Russian Federation, when opening an individual entrepreneur, a foreigner pays a state duty in the amount of 800 rubles. A sample form and a blank receipt for payment of the duty should be downloaded from the Federal Tax Service website. This can be done absolutely free.

Submission of documents

The collected documentation must be taken to the Federal Tax Service at the place of registration (or to the MFC). If all is well, then 3 days after submitting the documents, the foreigner will be given a Certificate of State Registration of Individual Entrepreneurs and a notification with statistics codes. From this moment you can start working.

Opening a current account

According to Russian legislation, after undergoing state registration as an individual entrepreneur, a foreigner is not required to open a new current account. This should be done only when carrying out transactions with your official partners and clients for amounts over 100,000 rubles.

A foreigner opens a current account for an individual entrepreneur in any Russian bank. A foreign citizen notifies the tax authority about opening a new bank account for an individual entrepreneur within 7 days after registration.

When opening a current (bank) account, a foreigner provides the bank with the following documentation:

1. Certificate of state registration of individual entrepreneurs.
2. Notification of taxpayer registration.
3. Photocopy of TIN.
4. Extract from the Unified State Register of Individual Entrepreneurs.

If, when carrying out business activities, payments are made only in cash, then a bank account does not need to be opened. After obtaining the status of an individual entrepreneur, in order to successfully run a business, a foreigner should order the production of a company seal.

Is a company seal required?

A foreign individual entrepreneur does not have to issue a company seal unless absolutely necessary . However, for example, when opening a bank account, bankers require such a seal. This case is an exception to the rule, but you should be prepared for it.

You can make an individual entrepreneur stamp at any stamp manufacturing company. In order to order an individual entrepreneur stamp, you must provide the following documents to this office:

1. Original and photocopy of the Certificate of state registration of an individual as an individual entrepreneur.
2. Copy of INN IP + original.
3. Personal passport (original).

The cost of making a seal is 500-1500 rubles. The price of the service can be found in the price list from the manufacturer.

My-nalog.ru

Today we will consider one of the difficult issues for an entrepreneur - what taxes must be paid in Russia, and at what rate, if an individual entrepreneur permanently resides outside the Russian Federation, but he was previously registered as an entrepreneur and at the same time chose the “simplified taxation”. Everything will depend on what account he receives his income into...

Outline of the article: 1. The simplified tax system for a non-resident 2. The tax rate under the simplified tax system for a non-resident 3. Income for a non-resident under the simplified tax system arrived at a Russian bank from a source located in our country 4. Income for a non-resident under the simplified tax system arrived at a Russian bank from a source located outside the territory of our country 5. Personal income tax for non-residents (obligation to pay tax and submit reports)

Good afternoon, I want to talk about how the tax rate, the obligation to pay tax and declare income may change depending on where you live and into which account (account in which bank) you receive money from business activities.

In order not to make my explanation boring and incomprehensible, I will immediately move on to a specific example (and this is my reader’s question) and we will analyze it together.

An individual – a citizen of the Russian Federation – was registered as an individual entrepreneur last year and during registration chose a simplified taxation system with the “Income” object in order to pay 6% of income.

A couple of months later, he moved to permanent residence in the United States and carries out trading operations through a foreign broker Interactive Brokers (American broker) and provides consulting services along the way. Money for his services goes to his account, which he opened immediately after registering an individual entrepreneur with Sberbank.

What we have? Non-resident - this is the case; services are provided – that’s two; income for services goes to an account in a Russian bank - that’s three; there is a second source of income from an American broker (this is a source “outside the Russian Federation”) - that’s four.

Here are four important components. And we see that our citizen applies a simplified taxation system for all this.

USN for non-residents

Does a citizen lose the right to use the simplified tax system if he permanently resides in the territory of a foreign state? No, he doesn't lose it.

There is a wonderful letter from the Russian Ministry of Finance that talks about this. The letter is short and therefore I will quote the text of the letter immediately in this article so that you can read it right away...

Question: On the application of the simplified tax system by an individual entrepreneur - a non-resident of the Russian Federation. Answer: MINISTRY OF FINANCE OF THE RUSSIAN FEDERATION LETTER No. 03-11-11/2228 dated January 23, 2014 The Department of Tax and Customs Tariff Policy has considered the appeal regarding the application of the simplified taxation system by an individual entrepreneur - a non-resident of the Russian Federation and reports the following. In accordance with “p. 1 tbsp. 346.12" of the Tax Code of the Russian Federation (hereinafter referred to as the Code), taxpayers are recognized as organizations and individual entrepreneurs that have switched to a simplified taxation system and apply it in the manner established by Chapter. 26.2 of the Code. “Clause 3 of Art. 346.12 of the Code defines a list of taxpayers who do not have the right to apply the simplified taxation system. This list of taxpayers is exhaustive and does not include individual entrepreneurs who are not tax residents of the Russian Federation. Thus, individual entrepreneurs who are non-residents of the Russian Federation have the right to apply a simplified taxation system. Deputy Director of the Department of Tax and Customs Tariff Policy R.A. SAHAKYAN 01/23/2014

As noted in the above letter, individual entrepreneurs who are non-residents of the Russian Federation have the right to apply a simplified taxation system. Conclusion - our citizen has the right to work for the simplified tax system.

Tax rate according to the simplified tax system for non-residents

Will the tax rate increase for a non-resident? No, it doesn't increase. The simplified tax system provides for two types of tax rates: – 6% if you pay tax on income; – 15% if you pay tax on “Income minus expenses.” At the same time, regions have the right to reduce the rate, so you need to look at the exact rate depending on your registration.

Many people ask me - what about 30%, since non-residents pay taxes at a rate of 30%? But this rate is applicable for personal income tax. Personal income tax and simplified taxation system are different taxes and an increase in the rate for non-residents from 13 to 30% is applicable for personal income tax, but not for the simplified taxation system.

Income for a non-resident under the simplified tax system was received by a Russian bank from a source located in our country

How to pay tax if the client pays for services (in our example) to an account opened in a Russian bank? It’s very simple how you would pay if you lived in our country.

And now attention - you, as entrepreneurs, need to pick up an extract from the Unified State Register of Individual Entrepreneurs and see what OKVED codes you have open. If it provides for such types of work as providing consulting services, receiving income from the sale of securities, then we are dealing with your simplified system.

If suddenly, such OKVED codes are not in your list of codes, then, according to the Russian Ministry of Finance, such transactions will fall under the scope of the “Personal Income Tax” chapter. How dangerous is this? Let's go straight to the numbers and take a look...

You are a non-resident and you have the required OKVED code. You received income from the provision of consulting services to your account in a Russian bank in the amount of 52,000 rubles. The tax amount in this case for you will be according to the simplified tax system = 52,000 x 6% = 3,120 rubles.

If you pay personal income tax, then as a non-resident you will no longer pay 3,120 rubles for this operation, but an amount greater = 52,000 x 30% = 15,600 rubles. The difference is noticeable. After all, for the “simplified” people, it doesn’t matter whether you are a resident or not, if you received income into your Russian bank account, you pay tax at the rate that you initially chose.

How to pay tax according to the simplified tax system if the broker is Russian?

This is where you need to be especially careful. So, you are an individual entrepreneur and you are a non-resident, but you receive income from a source on the territory of the Russian Federation. If you have chosen a taxation object of 6% of “Income”, then you will pay 6% of the total amount of income received from the sale of securities. And this is sometimes very unprofitable.

I recommend reading the explanations of the Ministry of Finance on this topic, where the financial department in its letter describes in detail the algorithm for calculating the tax -.

It will be better if you pay a 15% tax on “Income minus expenses” for transactions on the stock market, because you can also take into account the expense part. After all, income is not profit and it’s worth remembering. And in the stock market, sometimes expenses exceed income, and a loss results, so why overpay “out of the blue.”

What to do if your simplified tax system is 6%? If it is beneficial for you to pay a tax of 15% of profit, and not 6% of income, then you have time to submit a notice of change in the object of taxation before the new year 2019. We'll fix everything.

Income for a non-resident under the simplified tax system was received by a Russian bank from a source located outside the territory of our country

To make it easier to imagine all the information, please look at my table:

Conclusion for a non-resident - if an individual entrepreneur operates on a simplified taxation system and among his income there is income that comes from a source located outside the Russian Federation, then such income is not taxed.

For example, as shown in the table, if an entrepreneur receives only income from foreign sources, then he does not need to pay tax and declare his income.

And since he is still registered as an individual entrepreneur, he is simply obliged to submit a zero declaration under the simplified tax system (at the same time, he still pays insurance premiums). To avoid this, you just need to close your individual entrepreneur and that’s it.

Personal income tax for non-residents (obligation to pay tax and submit reports)

Conclusion for a non-resident - when receiving income from a foreign source, you do not have to pay tax. But your status as an individual entrepreneur obliges you to submit reports. A simple ordinary citizen (who was not registered as an individual entrepreneur) will neither pay tax nor submit a report. And you, as an individual entrepreneur, are required to submit a report.

Yes, your tax amount will be zero, because there will be no tax base and object of taxation. But you will be required to submit a zero declaration. Instead of a zero 3-personal income tax, you can submit a single (simplified) tax return, which will show the tax authorities that you had no transactions during the reporting period.

The best option for a non-resident individual entrepreneur when receiving “foreign” income is to close the individual entrepreneur and not pay extra insurance premiums and not make unnecessary “moves” to submit zero reports.

I hope that my article helped you understand. If you have any questions, write to me.

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Reasons and grounds for refusal of registration

A Federal Tax Service employee refuses to register a foreign individual as an individual entrepreneur in the following situations:

• when not all documents are provided to the tax officer;
• if the submitted documentation is completed incorrectly (with typos, errors, edits);
• if the documents are not certified by a notary;
• if a foreigner has previously received individual entrepreneur status in the Russian Federation;
• if the period for declaring a foreign individual entrepreneur bankrupt has not yet expired;
• if there is a previously adopted court decision to terminate the current activities of the individual entrepreneur forcibly;
• if there is a court order prohibiting a foreigner from engaging in commercial activities in his native country and on the territory of the Russian Federation.

After state registration of documentation that does not inspire confidence among officials, the foreigner is sent an official response by mail in writing indicating all the violations committed.

Foreign citizens who do not open an individual entrepreneur, but simply find employment in the Russian Federation, need a work patent or permit. About the difference between a patent and a permit, also about the procedure for hiring foreign citizens in the Russian Federation, notification of employment, obtaining a work permit and employment of foreign citizens, about foreign highly qualified specialists, about the features of registering an LLC with a foreign founder We talked about it in our other materials.

Rights and obligations in the Russian Federation

According to paragraph 3 of Art. 62 of the Constitution of the Russian Federation, foreigners are endowed with the same rights and responsibilities that residents of the Russian Federation have. As a result, the rules for doing business and hiring foreign employees are no different from the procedure established for citizens of the Russian Federation.

In accordance with Part 1 of Art. 23 of the Civil Code of the Russian Federation, any adult citizen, including foreigners, has the right to open an individual entrepreneur . However, he cannot register a new legal entity (company).

A foreigner can open an individual entrepreneur in the Russian Federation if he has an official residence permit or temporary residence permit. The laws of the Russian Federation do not limit the activities of a foreign individual entrepreneur in any way, with the exception of prohibited types of economic activity from OKVED. A foreigner can engage in small business in Russia under the conditions established for citizens of the Russian Federation.

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Who is recognized as a non-resident under the Tax Code of the Russian Federation?

In paragraph 2 of stat. 203 of the Tax Code defines the status of a resident of Russia - these are those citizens who stay in the territory of our country for at least 183 days (calendar) for 12 consecutive months. In this case, the stay should not be periodic, from case to case, but only permanent. Accordingly, non-residents are individuals who have been in Russia for less than 183 days.

Note! The course of the term should not be interrupted by short-term trips (up to 6 months) outside the country due to treatment or training, or performing various duties at hydrocarbon deposits in the depths of the sea.

Not only foreigners, but also Russian citizens can be recognized as non-residents for tax purposes; the fact of residence does not depend on the nature of citizenship. Also, when determining tax status, you should not rely on Law No. 173-FZ of December 10, 2003, where in stat. 1 provides completely different conditions for determining residents/non-residents depending on the nature of residence in the Russian Federation, availability of a residence permit, etc. These factors are used in regulating currency legislation.

Since in the context of this article the question is considered: Can a foreigner open an individual entrepreneur in Russia? Let's clarify who exactly has the right to register a business. According to stat. 23 of the Civil Code, an individual entrepreneur is a person who receives the opportunity to conduct activities from the moment of official registration in the Unified Register as an individual entrepreneur. That is, civil and tax legislation does not prohibit a foreigner from opening an individual entrepreneur, but has a number of features regarding the calculation of taxes and the submission of mandatory documentation to the control authorities for the registration procedure.