Hire an employee from another country: contract, salary, signatures - how to get it all done

In this article we will examine the following questions:

1. How to register employees from other countries. We describe ways to formalize relations - in this case, only a service agreement (GPC) is applicable. What pitfalls may arise and what to pay attention to, how to draw up an agreement.
2. How the work process works: 2.1. Signing the contract and exchanging documents. How can you sign an agreement (via digital signature, exchange of originals, signature services). 2.2. Payment for services. How does payment work? Will there be currency control on the part of the bank and what difficulties may be encountered.
3. What taxes or commissions may arise during transfers: 3.1. What transfer fees do banks charge and where to look to calculate the correct amount of fees. 3.2. What taxes will the organization and non-resident employee face upon transfer.
4. What pitfalls may emerge in the process.
5. General conclusions from the article and a warning about possible risks.

How can you formalize a relationship with a foreign specialist?

You can sign an employment contract or a civil law contract with a foreign specialist - a contract for the provision of services.
An employment contract with a non-resident foreigner is not directly prohibited by law, but even some government agencies doubt the feasibility of such an agreement (letter of the Ministry of Labor and Social Development of the Russian Federation dated August 7, 2015 N 17-3/B-410). We recommend drawing up a GPC agreement, since in this case the document flow is simplified and there are no restrictions of the Labor Code. At the same time, the company will not need to notify the Ministry of Internal Affairs due to working with a foreign citizen who does not work on the territory of the Russian Federation (clause 8, Article 13 No. 115-FZ of July 25, 2002).

If the contract states that the specialist will provide services in Russia, then the Ministry of Internal Affairs will need to be notified within three days. Otherwise, you can receive a fine of 1 million rubles if the company is from Moscow (clause 4, article 18.15 of the Code of Administrative Offenses of the Russian Federation).

Features in the service agreement (GPC) that are worth paying attention to:

1. It is necessary to indicate that interaction will take place via Skype, telephone, mail and other communication channels.
2. It must be indicated that the performer will not be a resident of Russia, will be located outside of it and perform services there. The company does not become a tax agent of the contractor for personal income tax (clause 1, article 207 of the Tax Code of the Russian Federation, clause 1, article 226 of the Tax Code of the Russian Federation), and also will not pay insurance premiums (clause 5, article 420 of the Tax Code of the Russian Federation).
3. There should be no hints of an employment relationship: there is no work schedule, there is a clear goal and result of the provision of services, there is a contract duration and payment for results.
4. It is better to indicate the Russian currency in the contract. Some banks have lower commissions for transfers in rubles.
5. It is necessary to establish the document flow procedure in the contract. We'll talk about this below.

Agreement on alienation of exclusive rights

An agreement on the transfer of intellectual property rights as a result of meeting certain conditions will help reduce the risks of international cooperation. According to Article 1234 of the Civil Code of the Russian Federation, the acquirer receives the exclusive right to intellectual property as soon as the agreement undergoes state registration. The author transfers to him all rights, except personal non-property rights - to the name, authorship, and integrity of the work. Moreover, if the acquirer does not pay money for the purchase of rights within the specified period or does not send royalties on time, the contract is considered terminated, and there is no need to even go to court.

How does document flow and payment work?

Document flow

There are several ways to sign a GPC agreement and certificates of services rendered (work performed):

1. Sign documents by hand on both sides and exchange originals.
2. Sign documents using CEDS (qualified electronic signature).
3. Sign documents using a non-qualified electronic signature (NES).
4. Sign documents using facsimile.

First option

Exchanging paper with a non-resident is very inconvenient; there may be overhead and time costs for paper exchange. Of course, a foreign contractor can periodically come to Russia and sign closing documents at once, but this option is also inconvenient.

Second option

A non-resident of Russia will not be able to obtain an electronic signature on the territory of Russia. The only option is to obtain an electronic signature in the non-resident’s country, but the electronic signature must comply with international and Russian standards (Article 7 No. 63-FZ of 04/06/2011).

Third option

Such a service. How does he work:

1. The company and the non-resident performer register in the service (however, the non-resident performer may have problems with registration, namely, receiving an SMS for registration).
2. The non-resident makes the document.
3. The non-resident sends you a link to the document to sign.
4. An SMS with a signature code is sent to your phone.
5. You confirm the signature via SMS.

Cool and convenient service without dancing with CECP. At the moment, the primary document (all accounting documents, except invoices) can be signed with a simple or unqualified electronic signature (NEP is implemented in the service). Therefore, these documents can be signed using this service and the tax office is obliged to accept them (Clause 4, Part 3, Article 21 FZ-402 dated December 6, 2011, Article 6 No. 63-FZ dated April 6, 2011).

To do this, it is necessary to stipulate in the contract that documents signed using a qualified digital signature are equivalent documents on paper (clause 2 of Article 6 No. 63-FZ of 04/06/2011). If this is not done, the tax office may have additional questions.

Also, you cannot sign invoices using the service. To sign invoices, a qualified electronic signature is required - this is a requirement of the Tax Code (clause 6, Article 169 of the Tax Code of the Russian Federation).

Fourth option

You sign documents using a facsimile. You and the contractor take a scan of your signature and then insert it into the created documents. To do this, it is necessary to stipulate in the contract that documents with facsimiles have legal force (clause 2 of Article 160 of the Civil Code of the Russian Federation, clause 4 of Article 111 N 149-FZ of July 27, 2006).

In this case, the agreement will need to be signed live, otherwise the agreement and documents will not have legal force. This will require the arrival of the contractor or sending the contract via mail.

Judicial practice on the use of facsimiles is ambiguous. Tax authorities may not accept documents that are signed using facsimile. Therefore, we would recommend using the exchange of originals or using NEP.

Payment

For transfers in foreign currency, you will need a current account in foreign currency. For transfers in rubles, a regular ruble current account is sufficient.

To transfer up to 200 thousand rubles, a payment order and a currency transaction code are sufficient (clause 2.15 of Chapter 2, Instruction of the Bank of Russia dated August 16, 2017 N 181-I, clause 2.7 of Chapter 2 Instruction of the Bank of Russia dated August 16, 2017 N 181-I). In practice, the bank may request supporting documents: agreement, invoice, act.

For a transfer amount from 200 thousand rubles to 3 million rubles, you will need to prepare a payment order with a currency transaction code, fill out an agreement card (certificate of supporting documents) and prepare documents that relate to the transaction (clause 8.1 of Chapter 8 Instructions of the Bank of Russia dated 08/16/2017 N 181-I). Currency control verifies your payment, since the recipient's details belong to a non-resident.

The Bank pays close attention to the following points in the agreement:

• date of signing the contract;
• clear and precise description of the service;
• the amount of the deal;
• currency;
• terms of payment and provision of services;
• requisites.

If there are errors in these data, the bank may reject the transfer. The bank does not pay significant attention to legal, punctuation and spelling errors.

If the import transaction amount is higher than 3 million rubles, then you will have to register an import contract and submit documents to the bank (clause 4.2 of Chapter 4 of Bank of Russia Instruction No. 181-I dated August 16, 2017).

Customer Reviews

Gratitude from Loseva S.I. I express my deep gratitude to Sergei Vyacheslavovich (lawyer of the firm) for his very clear, accessible help in solving my problem (protecting rights as a consumer). This is the second time I have contacted you to solve my problems. Always everything......and in full.

With gratitude, Svetlana Ivanovna Loseva, 02/15/2019

Gratitude from P.V. Greshina I would like to express my deep gratitude to the employees of your company - Sergei Vyacheslavovich Mavrichev and Konstantin Vasilyevich Solovyov for their enormous support, for their competent explanation and good attitude towards people. I wish you success and prosperity.

Greshina P.V. 03/23/2018

Gratitude from Alexey Shubakov Many thanks to Sergei Vyacheslavovich for the complete and detailed consultation. I have not encountered legal assistance before, but now, with a very favorable impression, I will definitely apply again in the future.

Shubakov Alexey 10/17/2018

Gratitude from gr. Bogodyazh N.G. I, Bogodyazh N.G. turned to the Legal Agency of St. Petersburg for help in a dispute with the company RTC JSC regarding the refusal to return the goods in accordance with the rules of trade, thereby my consumer rights were violated.

Thanks to the company’s lawyer, Stepanov D.Yu., I was able to return the money for the low-quality product, and I also received an apology from my opponent. I would like to express my gratitude for the qualified assistance provided to me by D. Yu. Stepanov and the Legal Agency of St. Petersburg.

With gratitude, Bogodyazh.

Feedback from Solovyova I would like to express my deep gratitude to lawyer Konstantin Vasilyevich Solovyov for his qualified assistance in resolving my issue. The decision was made in my favor, for which I am very grateful. I would also like to express my gratitude to the company’s team for their sensitive attitude towards clients.

Gratitude from V.N. Skorokhodova Dear Alexander Viktorovich! Let me express my sincere gratitude to you for your understanding, sensitive approach to the situation, openness, emotions and professionalism. I wish you good luck, success in your work and prosperity.

Sincerely, Skorokhodova V.N.

Thanks to Kavaliauskas V.A. I would like to express my deep gratitude to Vasily Anatolyevich, an employee of your company, for his enormous support and competent defense of my case. And also for having a good attitude towards people. I will recommend your organization to all my friends and family.

I wish you success and prosperity,

05/14/2018

Gratitude from Truk N.N. I would like to express my gratitude to Vasily Anatolyevich Kavalyauskus, Alexander Viktorovich Pavlyuchenko and Maxim Andreevich Lobur for providing qualified legal assistance, with the help of which my problem was resolved quickly and clearly. When contacted, I always found understanding and attention. It’s good that the “Society for the Protection of Consumer Rights” employs such lawyers and advocates. I wish you success in your future work and defending the interests of consumers.

Sincerely, Truk N.N.

07.05.2018

Gratitude from Piskunov I.B. I just don’t have words to express my gratitude to Sergei Vyacheslavovich. Thank you for having such a lawyer. Thank you for your help regarding the issue regarding the employment contract.

Piskunov I.B. 12/12/2018

Review by B.I. Goreky Gratitude to Yuri Vladimirovich from B.I. Goreky for the consultation on family rights.

Taxes and commissions

Taxes

The company will not have any insurance premiums or personal income tax. This is an additional bonus for the organization when working with foreigners who work remotely outside of Russia (the conditions were described in the first part of the article).

Also, the company does not incur VAT (clause 1, clause 2 of Article 161 of the Tax Code of the Russian Federation, clause 1 of Article 143 of the Tax Code of the Russian Federation). The VAT payer is an individual entrepreneur or a legal entity, and an organization purchases services from an individual, so VAT does not arise.

Personal income tax arises for a foreign specialist. When the contractor receives funds into his bank account, he will need to account for them in his country.

For example:

• Personal income tax in Ukraine - 18%;
• Personal income tax in Belarus is 13%.

Commissions

Most banks charge a commission for each foreign currency transfer. It is calculated using the following logic:

1. There is a lower and/or upper cost of translation.
2. The cost of the transfer depends on the percentage of the payment amount.

For example, the tariffs of some banks:

Commissions of Sberbank, Tinkoff and Alfa Bank for currency and ruble transfers

Commissions can vary significantly, so we will not compare the conditions of banks in detail. Basically, you can include 2% of the payment amount for commission as expenses. Tariffs for foreign currency payments can be calculated individually in each individual case.

And now briefly

1. It is possible to formalize relations with a non-resident individual only through a GPC agreement.
2. The GPC agreement must correctly indicate the terms of document flow, the conditions for the provision of services (in order to avoid paying personal income tax and insurance premiums) and exclude any similarity to an employment contract.
3. The easiest way to organize document flow is using services with a simple electronic signature or via facsimile.
4. For contract amounts up to 200 thousand rubles, simplified currency control is required. For amounts over 200 thousand rubles you will have to provide documents.
5. The contract must be carefully and correctly drawn up: indicate the subject of the contract, dates, amounts, currency, details, terms of payment and provision of services.
6. The company will not incur any taxes. Personal income tax arises for a non-resident individual in his country.
7. The approximate amount of bank commissions for transfers can be included in planned expenses at 2%. It is better to find out the exact amount of the commission directly from the bank.

Court decisions

Intellectual Law: Protection of Copyright Works

Registration of trademarks and service marks in a short time

Intellectual law: The highest measure of taste

How to reach your maximum

Attracting foreign specialists is an excellent opportunity for companies to expand their pipeline and find qualified specialists. At the same time, the company does not have insurance premiums and personal income tax, which can serve as a competitive advantage for the organization: increasing salaries and attracting the best specialists or reducing the cost of services.

The only negative is complicated document flow and increased costs or workload on accounting.

Cover photo: Shutterstock/small smiles Images in text courtesy of the author