Subsidiaries of foreign IT companies will be denied access to benefits

As Kommersant found out, the Ministry of Digital Development plans to change the rules for including enterprises in the register of accredited IT companies so as not to allow foreign structures into it. Now the registry includes subsidiaries of Huawei, Samsung and others. This provides a number of tax and other preferences, including the possibility of a deferment from military service and mobilization for employees. Russian developers have long asked to close the register for foreign companies, emphasizing that they are poaching personnel from domestic organizations, including for the purpose of relocation abroad.

According to Kommersant’s sources in the government, the Ministry of Digital Development plans to tighten the rules for creating a register of accredited IT companies so that it cannot include subsidiaries of foreign organizations. Companies already on the register, according to one of Kommersant’s interlocutors, will be excluded from it.

“The Ministry of Digital Development is discussing changes to the rules for accreditation of IT companies. It is planned that they will come into force no earlier than July 1, 2025,” the ministry confirmed to Kommersant. They clarified that they are discussing a mechanism under which a Russian legal entity can receive accreditation, “in which the total share of direct and (or) indirect participation of Russian persons is more than 50% of the total number of votes that fall on voting shares (stakes) – subject to compliance with other existing accreditation requirements.”

Accredited IT companies receive a number of benefits. For example, they are subject to reduced rates for insurance premiums, zeroing out income tax, providing employees with preferential mortgages, deferments from military service and mobilization, etc. The register of accredited IT companies has been hidden since October 2022. You can check the presence of a company in it by searching by entering the company’s TIN on the government services website. Thus, Kommersant was convinced that the register contains SAP CIS LLC (100% owned by the German SAP SE), Huawei Tech Company LLC (100% owned by the Dutch Huawei Technologies Cooperatief UA), Samsung Research Center (100% owned by the Dutch Samsung Electronics Benelux BV), etc.

The Ministry of Digital Development began cleaning the registry in the summer of 2022. Then banks, budgetary institutions, insurance companies, etc. were excluded from the list. In August of the same year, the ministry created the “Council for the annulment of state accreditation of organizations operating in the field of IT,” whose task was to audit the register for the presence of non-core companies in it (see “Kommersant” dated August 2 and 15, 2022).

Industry associations have long proposed limiting the inclusion of foreign company structures in the register. According to the executive director of Domestic Software, Renat Lashin, the issue has been discussed at least since mid-2022: “Russian IT companies feared that more and more structures of Chinese and Indian enterprises intending to work in the Russian Federation would begin to be included in the register for the sake of benefits.”

Two Kommersant sources familiar with the discussion of the initiative explain that one of the important reasons why industry participants insisted on banning the inclusion of subsidiaries of foreign companies in the register was “the aggressive personnel policy of a number of Asian vendors.”

In fact, they received a non-competitive advantage over the Russians, says one of Kommersant’s interlocutors: “They have access to cheap money, which allows them to lure away our employees by offering significantly inflated salaries.” The founder of MyOffice, Dmitry Komissarov, confirms: Russian IT companies “have repeatedly mentioned that the structures of Asian vendors take advantage of preferences in order to hunt employees and transport some of them to work in China.”

Nikita Korolev