Professional Employer Organization (PEO) in Russia

Global PEO in Russia 

As the largest country in the world by area and a vast population, Russia has a largely untapped talent pool that can be attractive to business looking to expand globally. But it can also be daunting. 

As a country known for it’s communist roots, there’s high levels of red tape, substantial paperwork, and hefty fines for non-compliance with local labor laws. Thankfully, professional employer organizations (PEOs) like Skuad don’t just make it possible to hire in Russia, they make it easy. 

Businesses can seamlessly onboard, pay, and hire remote employees in Russia — or anywhere else in the world for that matter. 

Let’s find out more about how a professional employer organization (PEO) can help you expand into Russia.

What is a PEO? 

A professional employer organization is a service provider that offers global human resources for SMEs, small businesses, medium-sized businesses, and startup operations. Essentially, they work as your outsourced HR team. 

Without the assistance of a PEO, companies looking to hire in Russia would also need to familiarize themselves with foreign payroll regulations and learn how to process it correctly. By partnering with a PEO, businesses can streamline and outsource Russian HR and administrative functions, leaving more time to focus on actually running the business.

PEO services aren’t just limited to Russia. In fact, they can help you to build a global team of workers that are based virtually anywhere in the world. 

Want to start hiring in Russia? Find out if a PEO in Russia is right for your business by chatting to one of the Skuad team today.

What are the benefits of using a PEO provider in Russia? 

By outsourcing your international HR responsibilities in Russia to a PEO, you’ll free yourself from the financial and time-related restraints that would otherwise make it an arduous undertaking. 

There are also numerous other benefits you might not even have considered yet. These include:

Hire the best of the Russian (and global) talent pool

Gone are the days when you’d have to hire within a 15-mile radius. Thanks to the rise of remote work, businesses no longer have to geographically restrict their search for talent.

So, with the means to affordably hire highly trained workers based throughout the whole of Russia, why wouldn’t you?

A PEO will unlock the door to the bustling talent pool in Russia, allowing you to select the finest employees to drive your company to success. 

Position yourself as a globally competitive company

Before long, your company’s name will be recognized on a worldwide basis, with the Russian talent pool competing to be employed by you.

In return, your PEO can set them up with an unrivaled benefits package that goes beyond just the statutory requirements to attract the most qualified workers. 

Test the waters in a new market

Before you launch full steam into a market that your company isn’t familiar with, it would be wise to gain some initial insights. 

With a convenient location spanning both Europe and Asia, expanding your operations into Russia is a smart way to get closer to both markets.

Convinced on the multitude of benefits of using a PEO to hire in Russia? Book into a demo with Skuad to get started today.

Avoid setting up your own legal entity in Russia

If you don’t work with a PEO to take on Russian employees, you’ll need to establish your own legal entity within the country — which is where your costs will begin to skyrocket.

Not only is it expensive to form your own legal entity, but it can also take months for the incorporation to be completed. Not to mention, you’ll need to put together a local legal team to help you with said incorporation.

You’ll also need to factor in the cost of your travel and accommodations since you’ll need to be physically present for the entire process. 

Using a PEO in Russia means completely bypassing the need to form an entire entity. This is because PEO services in Russia already have a legal entity established, which you can use as your own. 

Become culturally aware

When it comes to doing business in Russia or any other country, it’s critical to understand the cultural differences so you can maintain a respectful and professional relationship with your new employees. 

As your PEO service in Russia, Skuad can ensure you’re informed of the various cultural practices as an employer.

For example, did you know that Russians value directness in business interactions? Small talk is pushed aside, so talking business truly means talking business. Where this may be taken as abrupt in other cultures, this is standard in Russia (and means business is often done quicker!).

Remain compliant

Every country, Russia included, will have a different set of legal requirements. If you don’t comply with these laws regularly, you could end up facing some harsh penalties, including business bans.

Let’s get into some of the specifics about hiring in Russia:

Payroll in Russia

The local currency is the Russian Ruble (RUR).

Russia's minimum wage is low —- around 7,500 Russian rubles per month for all workers nationwide, which is approximately $115 USD per month.

Russian employees usually work an average of 8 hours a day, across 5 days a week. Should workers be required to do overtime, the first 2 hours is paid at 150%, with thereafter paid at 200%.

Russians are also required to have at least a 30 minute rest break each day by law, but this is normally extended to an hour by most companies.

Tax and employer contributions in Russia

• Russian residents are taxed at 13% for income tax.
• Non-residents are taxed at 30% — non-residents can take a residency test after 6 months and request the resident rate if they pass. 
• Employees do not contribute to the social security fund, but employers must contribute 30% of each employee’s salary. Typically the employer must pay:

• 22% - Pension Fund of the Russian Federation.
• 2.9% - Social Insurance Fund of the Russian Federation.
• 5.1% - Federal Compulsory Medical Insurance Fund.

Paid leave

• There are at least 8 paid holidays in Russia. 
• Employees get 28 paid days off per year, which they are eligible for after 6 months of employment. 
• Employers must provide 3 days of paid sick leave.
• Additional leave types include maternity, paternity, surrogacy, and unpaid leave —  maternity leave is for 140 days and is paid by the social insurance fund. 

There’s a lot to get your head around when looking to hire in Russia, but you don’t need to do it alone. Discover more about how Skuad can help your business grow.

How much does it cost to build a team in Russia?

Company incorporation in Russia

All international businesses must be incorporated in Russia before hiring workers. All entities must be approved and establish a business bank account. This process generally takes between 4-6 weeks to complete. 

You will need to have a budget of at least $17,000 to cover the fees you will face, such as legal registrations and government registration fees.

PEO in Russia

PEO services in Russia make global expansion easy. 

When you partner with Skuad, you can focus on core business operations and managing teams while maintaining compliance, paying your teams, and overseeing tax management in Russia. Our pricing structure is transparent. You can start hiring contractors at $19 a month while full-time employees are $199 a month. 

Skuad offers your business the ability to pay workers in Russia in local currencies while maintaining accurate and compliant records. Team members can be onboarded with just a few clicks of a button! Our easy-to-use platform allows you to manage time off, review documents, and see employee information quickly and easily. 

Get started with PEO in Russia today

If your business is ready to partner with a global PEO that can help you quickly and seamlessly expand its operations, contact Skuad today! With expertise in employment and labor laws in over 160 countries, we can help your organization expand to any country you want.  

Interested in seeing how PEO in Russia works in real-time? Book a demo with us so you can hire global employees and contractors in no time!