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Foreign IT-companies will be obliged to open representative offices in Russia

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Foreign IT-companies will be obliged to open representative offices in Russia
By of information Kommersant, the Russian government plans to create a system of "digital residency" for foreign Internet companies with an audience of more than 100-500 thousand users in Russia by the end of 2021.
Foreign social networks, content and game services, messengers and app stores will be required to open representative offices in Russia, register with the Federal Tax Service and pay local taxes. Subject to participation in the program of "digital residency", foreign companies will be able to remotely register legal entities in Russia and pay all required taxes in Russia, and all the paperwork will be in electronic format.
Kommersant" source specified that after the adoption of the bill social networks and services will have a month to legalize business in Russia, otherwise they "may face sanctions" The Ministry of Finance, Federal Tax Service (FTS), Federal Customs Service (FTS) and FSS will be responsible for the implementation of this government initiative.
A representative of the Institute for Internet Development explained to the publication that the new requirements of the legislation of the Russian Federation may fall under Google, Facebook, Booking, Amazon, Wargaming.net, Steam, Facebook, Twitter, Pinterest, Zoom, Airbnb, Clubhouse, as well as other social networks and services.
An expert of the commission of the Moscow branch of the Association of Lawyers of Russia told "Kommersant" that the new measure will equalize the working conditions for foreign and Russian companies currently operating in the country. Thus, the Russian companies, unlike the foreign ones, according to the legislation of the Russian Federation are obliged to pay VAT. Because of this, many of them are even registered abroad, such as Yandex and Telegram.
The representative of the non-profit organization "Information Culture" explained that the implementation of a convenient electronic document flow with the Federal Tax Service, the need to register and meet the requirements to pay local taxes to continue to operate in the country, will make many foreign services to reconsider their local priorities and once again weigh the importance of the Russian market. There is a possibility that some services will not accept the new rules of the game and will develop further without Russian users and advertisers.
On March 16, 2021, Roskomnadzor stated that it could slow down or even block the work of any social networks and Internet platforms in Russia, including Facebook, Instagram, YouTube, and others, if these platforms do not comply with requirements to remove content banned in Russia and do not comply with the RKN’s legal requirements.

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