Two things surprise most foreign employers. Ending employment requires a ground from the Labour Code and a procedure to match — goodwill and notice are not enough. And a great deal turns on paperwork that has to exist before it is needed, not produced when someone asks. Both are manageable if handled early, expensive if not.
Employment contract, services contract or self-employed — the choice affects tax, documentation and the risk of later recharacterisation.
Compliant Russian contracts, internal regulations, working time and holiday records — the document set an inspector will ask for.
Changes to terms, transfers, disciplinary process, absence and leave — each with a procedure that has to be followed to be relied on.
Mutual agreement, redundancy or dismissal for cause: different grounds, different notice, different severance, and a paper trail built beforehand.
Labour inspectorate findings, employee claims and court proceedings — defended on the documents that already exist.
Every dismissal has to rest on a ground set out in the Labour Code, and each ground brings its own procedure, notice and documentation. Poor performance is not, by itself, one of them — relying on it means having built an evidenced process long before the conversation.
Where the procedure fails, courts reinstate: the employee returns to their job with pay for the period they were out. That outcome is what makes an improvised dismissal one of the more expensive mistakes available to an employer here — and why mutual agreement, properly documented, is so often the right route.
The usual pattern is not an employer behaving badly — it is an employer who did the right thing and cannot evidence it. Which is fortunate, because that is the cheapest category of risk to close, and it closes in advance.
In Russian, containing the mandatory terms — a translated group template rarely qualifies on its own.
Expected from the first employee, not from the fiftieth. A common inspection finding when missing.
Kept contemporaneously; reconstructing them after a complaint does not help.
Employment records are personal data, with their own consent and handling obligations under Russian law.
Every term you agree has a payroll consequence. We run the calculation as well as draft the contract.
Payroll service →Hiring a foreign national ties the employment contract to permit status — the two have to match.
Immigration service →No Russian entity? Since 2025 a foreign company can still carry withholding and reporting duties.
NDFL agent duties →Not safely. A Russian employment contract has mandatory content set by the Labour Code — place of work, job function, start date, pay terms, working time — and a translated template usually misses some of it while including terms that are unenforceable here. The contract also has to exist in Russian. We normally start from a compliant Russian base and bring your group's terms into it, rather than the other way round.
Harder than most foreign employers expect. There is no at-will employment: dismissal has to fit a ground listed in the Labour Code, each with its own procedure and paper trail, and the burden of proving it was done properly sits with the employer. Redundancy carries notice periods and severance; dismissal for cause requires documented process that has to have been built before the decision. Mutual agreement is usually the cleanest route, and it is worth structuring properly rather than improvising.
The inspectorate checks documents: contracts and their mandatory content, internal regulations, working time records, payslips, holiday scheduling, and how personal data of employees is handled. Most findings are documentary rather than substantive — the employer did the right thing but cannot evidence it. That is also the cheapest category of risk to fix in advance.
It can be legitimate, and it can also be recharacterised as employment — with back pay, contributions and penalties following. What matters is how the relationship actually runs: fixed hours, a workplace, subordination and ongoing rather than project work all point towards employment regardless of what the document says. We advise on the choice and on documenting it so it holds up.
Yes — the obligation does not scale with headcount the way many employers assume. Internal labour regulations, data protection rules for employee records, working time and holiday documentation are expected from the first employee. Small teams are inspected too, and a missing document set is the most common finding.
This is the genuinely difficult area. Russian labour law contemplates remote work, but a foreign company employing someone in Russia without a local entity runs into practical limits — and separately may pick up tax agent duties from 2025. The structuring question and the tax question have to be answered together, which is exactly where a tax and legal team in one place helps.
The cheapest time to ask is before the decision is made. Describe the situation and you will get a plain answer on what the law requires and what it takes to get there.
ex-Big Four team · Moscow · since 2018 · © TaxWell & Partners
Practical support for international business in Russia.