How to open an individual entrepreneur for a foreign citizen in Russia in 2021

Can a foreigner be an individual entrepreneur in Russia?

The Constitution of the Russian Federation provides for equal rights of Russian citizens and foreigners. That is, foreigners have the same rights and bear the same responsibilities as Russians, with the exception of cases provided for by law. Also, the Civil Code of the Russian Federation states that an individual can engage in individual entrepreneurship only after passing the state registration procedure. An individual entrepreneur does not have the right to form a legal entity in the future.

Is it possible for a foreign citizen to open an individual entrepreneur in Russia? It is possible, because, according to the regulations of the Russian Federation, an individual entrepreneur in Russia can be a person who has reached the age of majority. Accordingly it could be:

Russian citizen;
citizen of a foreign country;
Stateless person is a subject who does not have a specific citizenship.

The procedure for registering an individual entrepreneur for residents and non-residents of the Russian Federation looks almost identical. Like a Russian citizen, a foreigner undergoes the procedure of registration at the place of residence, in other words, “propiska”. In this case, it can be either a residence permit in Russia or a temporary residence permit.

Can a non-resident open an individual entrepreneur without temporary registration? No. Imagine a situation: an individual registered in Moscow wants to open an enterprise in St. Petersburg. It turns to the St. Petersburg branch of the tax service with a request to register it as an individual entrepreneur. He will be denied this request, since he is registered in Moscow. To open an individual entrepreneur in St. Petersburg, he needs to change his place of residence (registration) from Moscow to St. Petersburg. Same with foreigners. To register an individual entrepreneur in Russia, they need to obtain a temporary residence permit in a particular region of the state.

To become a full-fledged individual entrepreneur, any individual must collect the documents required for registration, in particular:

Passport and its photocopy. If an individual sends these papers by mail, then the passport must be photocopied, after which its copy is stitched, and then only sent to the registration authority.
Taxpayer identification code. It can be obtained from the branch of the Federal Tax Service of the Russian Federation or on its official website.
Primary document (receipt form) confirming payment of the state duty amount.
Registration of a foreign citizen as an individual entrepreneur, like registration of a citizen of Russia or a stateless person, is impossible without filing an application for state registration.
Application for the transition of an individual taxpayer to a simplified taxation system. This statement will enable its owner to switch to a more convenient tax system and significantly reduce their tax burden.

The law obliges foreign citizens to obtain a work permit along with a certificate of state registration and a USRNIP number.

Insurance premiums of non-resident individual entrepreneurs on a simplified basis

Non-residents-"simplified" pay insurance premiums for themselves in a fixed amount, in accordance with the provisions of Art. 430 Tax Code of the Russian Federation.

In 2021, a non-resident individual entrepreneur on the simplified tax system must pay contributions in the following amount:

for compulsory pension insurance in the Pension Fund of the Russian Federation – 29,354 rubles;
for compulsory health insurance in the Federal Compulsory Medical Insurance Fund - 6,884 rubles.

Individual entrepreneurs using the simplified tax system (including non-residents) do not pay contributions to FOSS.

If a non-resident received the status of a simplified tax payer during a calendar year, then the amount of insurance premiums payable is calculated in proportion to the registration period:

Contribution to the simplified tax system = Fixed contribution / 12 months * KolMes,

where FixVzn is a fixed amount of contributions established by Art. 430 Tax Code of the Russian Federation; KolMes – the period of stay of a non-resident individual entrepreneur as a payer of the simplified tax system (in calendar months).

If, at the end of the calendar year, the income of a non-resident “simplified” person exceeded 300,000 rubles, then the individual entrepreneur must pay an additional contribution to the Pension Fund in the amount of 1% of the difference between the actual income and the limit (300,000 rubles).

Additional contributions to the Compulsory Medical Insurance Fund of the Tax Code of the Russian Federation are not provided.

How to formalize and register an individual entrepreneur for foreigners?

Federal Law-129 provides a complete list of instructions on how individual entrepreneurs are registered by a foreign citizen. Registration of a non-resident of the Russian Federation can be carried out only at the place of his residence. The place of residence of a foreigner is the place of temporary residence, the mark of which is on the identity document.

For state registration of a foreigner as an individual entrepreneur, the following documents must be submitted to the local tax office:

Application for state registration of an individual entrepreneur according to the model approved by law. Form P21001 occupies one of the main places in the list of registration documentation.
A photocopy of a document that confirms the identity of a foreign citizen registered as an individual entrepreneur.
A photocopy of a birth certificate or other document that contains information about the date and place of birth of a foreigner who is going to register as an individual entrepreneur.
A photocopy of a document that confirms the legal right of a non-resident of the country to reside on its territory. Most often, such a document is a temporary residence permit. For foreign citizens it is placed in the form of a stamp in identity documents. If the individual entrepreneur is a stateless person, then this permit takes the form of a separate document. A residence permit for both is a document that confirms the right of its owner to permanently reside in the territory of the Russian Federation.
Opening an individual entrepreneur by a foreign citizen is impossible without him submitting to the tax authority an original or a copy of a document confirming the place of permanent residence of this individual;
Original receipt for payment of state duty.

Many people are interested in how much it costs to open an individual entrepreneur? Based on the information described above, it follows that to open it you need to spend money on photocopies of the necessary documents and pay a state fee of 800 rubles.

A sample filling out, as well as a blank form of primary documents can be found on the official website of the Federal Tax Service. You can download them absolutely free.

The “registration package” can be submitted to the tax service yourself, submitted through a third party, or sent by mail. If you cannot personally submit the documentation, then in this case the application for state registration and the application for transition to the simplified tax system will have to be certified at a notary’s office. Certification of each document can cost from 20 rubles per copy. These applications can also be sent via email.

STS for non-residents in 2021

For non-residents of the Russian Federation, the general conditions for switching to the simplified tax system, the procedure for calculating tax, the deadlines for its payment, and filing reports apply.

Features of application

A non-resident of the Russian Federation can switch to the simplified tax system from January 1 of the current year by submitting a corresponding application to the Federal Tax Service.

To acquire the status of a simplified tax system payer in 2021, a non-resident must fulfill the following conditions:

Annual income . To switch to the simplified tax system, a non-resident’s income based on the results of the previous calendar year should not exceed 150 million rubles. Compliance with the income requirements is confirmed by tax returns filed by the non-resident in the previous reporting year.
The number of employees . An individual entrepreneur who does not have the status of a tax resident of the Russian Federation can switch to the simplified tax system, provided that the number of its employees does not exceed 100 people. When calculating the number of employees, the Federal Tax Service calculates the average number of individual entrepreneurs - full-time employees, part-time employees, persons hired under a contract.

Video: How to register a foreigner as an individual entrepreneur?

How does registration work?

If you are not a resident of the Russian Federation, this does not mean that the conditions for registering your business on the territory of this state are more difficult than for Russian citizens. The state seeks to stimulate the growth of small and individual enterprises registered by both Russians and other individuals. The conditions are almost the same. The only thing you should take special care of before registering an individual entrepreneur for a foreign citizen is the place of temporary or permanent residence, without which opening an enterprise is impossible.

Language issue

Can a non-resident register as an individual entrepreneur if his application and other documents are not prepared in Russian? Answer: no. According to the law, every foreign citizen planning to register an individual entrepreneur on the territory of the Russian Federation must not only make a competent translation of all documents prepared for registration, but also have them notarized. Translation of documents is carried out by special organizations. And notarization of documents translated into Russian will not take much time and money.

Submission of documents

After all permits have been received, documents have been translated and certified, applications have been drawn up, you can safely go to the tax authority to submit documents for registration. Recommendation: just in case, in addition to paper versions of documents, take electronic ones with you. This is not necessary, but it may be useful.

If all documents are completed correctly, then after 5 working days you will be able to pick up from the registration authority your certificate of state registration of an individual as an individual entrepreneur with the assigned Unified State Registration Number of an individual entrepreneur, an extract from the State Register of Individual Entrepreneurs.

Typically, after the tax authority officially registers an individual entrepreneur, he is obliged to transfer all the necessary data about the new business entity to the authorities of the Pension Fund and the Federal Compulsory Medical Insurance Fund. However, exceptions do occur. If, after 7 days from the date of receipt of your registered documents, you have not received notification that you have been registered with these authorities, then you will have to send all the documents yourself. It is necessary. If you do not register with these authorities, then such inaction will entail punishment provided for by the law of the Russian Federation.

Remember, if you, as an individual entrepreneur, are going to hire workers, then you are obliged to pay insurance premiums not only for yourself, but also for your subordinates.

QUESTION: taxation procedure for purchasing services from a non-resident in the case where the recipient of the remuneration is:

— organization (resident of the Russian Federation);

— individual entrepreneur (resident of the Russian Federation)

ANSWER: the subject of the agreement is stated as follows: “The Performer (resident of the Russian Federation) undertakes to provide services expressed in a performance at the concert venue within the framework of the XXX concert project, and the “Customer” (resident of the Republic of Belarus) undertakes to pay the Performer a remuneration for the performance services.”

Features of taxation when paying income to a legal entity

Value added tax

In accordance with paragraph 1 of Article 114, when selling goods (work, services), property rights on the territory of the Republic of Belarus by foreign organizations that do not operate in the Republic of Belarus through a permanent representative office and are not therefore registered with the tax authorities of the Republic of Belarus (hereinafter in this chapter - foreign organizations that are not registered with the tax authorities of the Republic of Belarus), the obligation to calculate and pay value added tax to the budget rests with organizations and individual entrepreneurs registered with the tax authorities of the Republic of Belarus purchasing these goods (works, services), property rights.

In order to determine the object of taxation for VAT, one should be guided by the norms of Appendix No. 18 to the Treaty on the Eurasian Economic Union (Signed in Astana on May 29, 2014).

In accordance with subparagraphs 1-4 of paragraph 29, the place of sale is recognized as the territory of the state whose taxpayer is purchasing:

works, services are directly related to movable property, vehicles located on the territory of this Member State;

services in the field of culture, art, training (education), physical culture, tourism, recreation and sports are provided on the territory of this Member State;

consulting, legal, accounting, auditing, engineering, advertising, design, marketing services, information processing services, as well as research, development and experimental technology (technological) work;

works, services for the development of computer programs and databases (software and information products of computer technology), their adaptation and modification, maintenance of such programs and databases;

services for the provision of personnel in the event that the personnel work at the buyer’s place of business.

These provisions also apply when:

transfer, provision, assignment of patents, licenses, other documents certifying rights to state-protected industrial property objects, trademarks, trademarks, trade names, service marks, copyrights, related rights or other similar rights;

rental, leasing and provision for use on other grounds of movable property, with the exception of rent, leasing and provision for use on other grounds of vehicles;

provision of services by a person engaging on his own behalf for the main party to the agreement (contract) or on behalf of the main party to the agreement (contract) another person to perform work, services provided for in this subclause.

Otherwise, the place of sale is recognized as the country of residence of the taxpayer in which the work is performed or services are provided.

This norm is also reflected in Article 117 of the Tax Code of the Republic of Belarus.

Thus, the place of implementation directly depends on the wording of the subject of the contract.

Based on the information set out in the question, the place of sale of services in terms of calculating value added tax is the territory of the Russian Federation. In other words, the obligation to pay value added tax is assigned to the Seller of services, which, according to the terms of the agreement, is a legal entity resident of the Russian Federation. Depending on the taxation system applied, the tax may or may not be paid on the territory of the Russian Federation.

The Customer (resident of the Republic of Belarus) does not have such an obligation based on the above legislation.

Income tax

Payers of the income tax of foreign organizations that do not carry out activities in the Republic of Belarus through a permanent representative office (hereinafter in this chapter - payers) are foreign and international organizations, including those that are not legal entities, that do not carry out activities in the Republic of Belarus through a permanent representative office, but deriving income from sources in the Republic of Belarus (hereinafter in this chapter - foreign organizations) (Article 188 of the Tax Code of the Republic of Belarus).

The types of income of foreign organizations that do not operate in the Republic of Belarus through a permanent representative office and are subject to income taxes are named in Article 189 of the Tax Code of the Republic of Belarus.

Thus, the object of income taxation is the income of a non-resident received from the organization and holding of cultural and entertainment events on the territory of the Republic of Belarus and (or) participation in them, as well as from the operation of attractions and menageries on the territory of the Republic of Belarus (Clause 1.6 of Article 189 of the Tax Code RB).

Clause 7 of Article 213 of the Code of the Republic of Belarus dated July 20, 2016 N 413-Z “Code of the Republic of Belarus on Culture” establishes that cultural-species measures are cultural measures in public ci i (or) in special ways.

Yes, cultural and cultural events include performances, concerts, performances, and other cultural events.

Based on the subject of the agreement provided for study “provision of services for performing at a concert venue”, as well as clause 2.2.1 of the agreement “the performer undertakes to perform a live performance”, we conclude that the income received by the Performer (resident of the Russian Federation) is classified as income from participation in concert and entertainment event and is subject to income tax.

According to Article 7 of the Agreement between the Government of the Republic of Belarus and the Government of the Russian Federation for the avoidance of double taxation and the prevention of tax evasion with respect to taxes on income and property (hereinafter referred to as the Agreement), the profits of an enterprise of one Contracting State may be taxed only in that State, unless such the enterprise does not carry on business in the other Contracting State through a permanent establishment situated therein. If an enterprise carries on business in this way, its profits may be taxed in that other State, but only so much as is attributable to that permanent establishment.

It should be noted that the income of a Russian organization that does not operate in the Republic of Belarus through a permanent representative office is exempt from income tax in the Republic of Belarus, subject to the submission to the tax authority at the place of registration of the tax agent of a document (certificate) confirming its permanent location in Russian Federation for the purposes of applying the Agreement.

Thus, in the above situation, an object of taxation with income tax arises (the tax is calculated and transferred by a resident of the Republic of Belarus as a tax agent). If a residence certificate is provided, the non-resident does not have the obligation to calculate income tax.

Features of taxation when paying income to an individual

Individual entrepreneurs engaged in foreign economic activity enter into agreements both with foreign organizations and with individual entrepreneurs who are tax residents of other states.

According to Article 19 of the Tax Code of the Republic of Belarus (hereinafter referred to as the Code), individual entrepreneurs are individuals registered as individual entrepreneurs.

Foreign individual entrepreneurs are recognized as individuals registered as individual entrepreneurs outside the Republic of Belarus (Part 3, Clause 1, Article 19 of the Code).

Thus, for tax purposes, individual entrepreneurs are treated as individuals. Consequently, since foreign individual entrepreneurs are not organizations, when receiving income from Belarusian organizations they are not recognized as payers of income tax for foreign organizations that do not operate in the Republic of Belarus through a permanent representative office, but are payers of personal income tax (hereinafter referred to as income tax ) in accordance with paragraph 5 of Article 14 and Article 195 of the Code.

Consequently, the fee received by a Russian artist (presenter) from a Belarusian organization is income from sources in the Republic of Belarus.

In accordance with paragraph 1 of Article 13 “Income from independent personal services” of the Agreement, income received by a person with permanent residence in one Contracting State (Russian Federation) from the provision of professional services or other activities of an independent nature may be taxed in another Contracting State ( Republic of Belarus). This happens if:

• the said person has a permanent base in that other State (Republic of Belarus) used by him to carry out his activities, or

• income is paid from sources in that other State (Republic of Belarus).

In all other cases, such income may be taxed only in the first-mentioned State (Russia).

The term “professional services” includes, in particular, independent scientific, literary, artistic , sports, educational or teaching activities, as well as the independent activities of doctors, lawyers, engineers, architects, dentists and accountants (clause 2 of Article 13 of the Agreement).

Since in the described situation the income is paid from sources in the Republic of Belarus, then, according to Article 13 of the Agreement, it must be subject to income tax in the Republic of Belarus.

Here, similar to income tax, if a certificate of permanent residence is presented at the time of payment, an exemption from income tax or a reduced tax rate may be applied.

When paying income to foreign individual entrepreneurs, there are no rules obliging Belarusian organizations to calculate and transfer to the budget value added tax, calculated based on turnover from the sale of goods (work, services), property rights, the place of sale of which is recognized as the territory of the Republic of Belarus, since individual entrepreneurs are not organizations.

Thus, when paying income:

- for a non-resident legal entity, the individual entrepreneur has the obligation to withhold income tax at a rate of 15%. When providing a tax residence certificate, such an obligation does not arise. The tax return is submitted to the regulatory authorities indicating the amount of tax payable in the amount of 0 rubles. Responsibilities for paying VAT arise for a non-resident, as a Seller of services, taking into account the taxation system applied by him.

- for a non-resident individual, the individual entrepreneur has the obligation to withhold income tax from the amount of the paid fee in the amount of 13%. When providing a tax residence certificate, such an obligation does not arise.

Certificates can be submitted both before and after tax payment. However, if a certificate is provided after payment of the tax, the tax is initially withheld and paid, then returned from the budget and transferred to the counterparty.

04.10.2019

Do I need a current account?

Many people are interested in whether a foreigner can open an individual entrepreneur in Russia without a bank account. The rules for registering individual entrepreneurship for Russian citizens and foreigners are the same in terms of opening bank accounts and obtaining a stamp. More detailed information about opening a current account for an individual entrepreneur can be found here

According to the law, every individual entrepreneur registered in Russia is not required to open a current account. It is necessary to open it only if you are going to carry out transactions with your partners and clients for amounts greater than 100,000 rubles. If you realize that such amounts are not expected in your business activity, then it is not necessary to do this, although it is advisable. It's difficult to predict how far your business will go, who you'll partner with, and how much revenue it will generate.

Is printing required?

A foreign citizen represented by an individual entrepreneur also does not have to issue a stamp unless absolutely necessary. However, it is worth noting that if you plan to open an account in a bank convenient for you, it may ask you to provide a stamp. This, of course, is an exception to the rule, but you also need to be prepared for it.

The seal of an individual entrepreneur brings many advantages, not disadvantages, to its owner. It gives its owner solidity and reliability in the eyes of his partners, competitors and clients. It protects the documentation. In any case, whether or not to have a seal is up to you to decide.

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