RS Main Migrant Workers from the West

Migrant Workers from the West

The Russian labor market has been underestimated by experts from developed countries.

There are very few labor migrants in Russia from the developed western countries- only a few tens of thousands. Neither Russian demographers nor expats working here can understand this. For this category of workers, there exist favorable conditions, compared to average Russians: high demand, good salaries, sufficient level of safety, and an excellent education system for children.

Why Russia is Good for Migrant workers


Russia ranked seventh in the ranking of the most appealing country for migrant workers.

It was first estimated as high, in the latest edition of HSBC Bank's annual survey - "Expat Explorer".

China skipped ahead over Russia, climbing 11 spots in the rankings, to take the top spot, with Germany, Singapore, the Cayman Islands, Australia and Canada following behind China. Russia ranked ahead of the U.S., France and Great Britain in the category. In total, 37 countries participated in the survey.

During the evaluation of the participating countries, the originators of the survey (HSBC), considered several dozen parameters, separating them into three categories - economic working conditions, quality of life, and educational opportunities for children.

Russia ranks ahead of the U.S., France and Great Britain in most appealing countries to migrant workers

Russia's low income tax is its main advantage. Russia ranked fifth according to the disposable income category. Since 2011, highly paid foreigners in Russia who are earning more than 2 million rubles a year (nearly $62 000) pay an equal amount of income taxes with the citizens of Russia (13%)

The quality assessment of life saw Russia coming down a few spots, to rank 12th. Migrant workers are not accustomed to Russia's labor culture– which ranked 35th place among those polled. It is difficult for citizens of other countries working in Russia to find comfortable housing, besides the fact that most housing is expensive. It is obvious that the poll was carried out first of all across Moscow. Migrant workers are dissatisfied with Russian restaurants and medical centers. But foreigners living here disprove the myth about bleakness, isolation and Russia's suspicions of migrants. Russia is in the first three of the countries where it is easy to find friends and on the fourth place in availability of entertainments. The youth is ready to communicate in English in most cases, the authors of research note with satisfaction.

The main advantage of Russia is the low income tax

Russia is especially recommended to foreign couples with children. It is easy to find a suitable school (the second place in the world rating), and the education level is rather high.

From where the foreigners are and what they do in Russia

HSBC assessment is a look at Russia (actually, at Moscow and St. Petersburg) and of Europeans from the Western world. According to the Federal State Statistics Service, their share among all foreigners legally working in the country in the 2000s didn't exceed 2-3%, and according to recent data for 2011 it reduced to 1-2%. It is connected with low-qualified labor inflow to Russia in 2002 to 2004 from CIS countries, first of all, mainly Uzbekistan and Tajikistan, and to a lesser extent, from Ukraine and Kyrgyzstan.

According to data for the end of the first half of 2013, the share of labor migrants from CIS countries among having permits to work or a 'patent' (for individuals) reached nearly 90%. And this is without taking into account the citizens from Belarus, who have equal labor rights with the Russians. Among foreigners from "distant" lands, citizens of China made up nearly half, Turkey-15%, 13% - North Korea.

In 2000, in Russia there were only 23 thousand Europeans working, that were from EU countries (but then they made up more than 10% of foreigners working in Russia) and less than 2 thousand Americans. The number of labor migrants to Russia steadily increased until 2008, having reached 2.4 million people; 36 thousand from them were citizens of the European Union countries, 5 thousand more – citizens of the USA. The crisis sharply reduced Russia's appeal, both for citizens from the countries of the former Soviet Union, and for foreigners from other states. The sharp toughening of immigration laws and a reduction in the labor migration quota, which affected citizens from the countries of the former Soviet Union. After the anti-immigrant demonstrations, in residential areas in the south of Moscow in October, 2013, the Federal Migration Service began to consider the need of taking new steps for the regulation of labor migration. In particular, the possibility of entrance to Russia from CIS countries only on foreign issued international passports, were discussed.

The Ministry of Labor and Social Protection of Russia suggests reducing the quota for foreign labor by more than 100 thousand – to 1.6 million people in 2014. Thus, almost at the same time the same ministry decided to increase quotas for a number of regions this year. As part of the continuing common country quotas, additional working hands were requested by Moscow – 14 thousand more (the general quota — 215.5 thousand people). The capital sharply needs unskilled workers and construction workers (40% of the quota). But in third place in the quota in the category of workers, were heads of institutions, organizations and enterprises – 16% of the quota or nearly 40 thousand people.

For the first half of 2013, according to the Russian Central bank, foreigners transferred $8.5 billion from Russia (17% more than a year ago). Including $2.8 billion which is 4% more than in the first half of 2012 transferred to other countries: most of it to Hong Kong, China ($346 million) and the USA ($286 million). Even more went to CIS countries: to Uzbekistan - $2.3 billion, Tajikistan - $1.3 billion, to Ukraine – $0.6 billion.

Most of all the foreign labor finds Moscow appealing - 16% of all migrants live here according to the results of for the first half of 2013, having permission to work in the country, and also in St. Petersburg – 13%. Another 12% work in the Moscow region, nearly 5% - in the Krasnodar territory, including workers in Sochi, the capital of Winter Olympic Games 2014.

In the main oil-extracting region of Russia – the Khanty-Mansi district 4% of foreign migrants were working, in the Leningrad region (near St. Petersburg) — 3.5%, 2.5% - in the Primorsky territory (where in 2012 the APEC summit was held), in the Kaluga region (where in recent years there was a powerful automobile building cluster) and in the Sverdlovsk region – the center of heavy mechanical engineering, respectively. 88% of foreigners working in Russia are male.

Russia is especially recommended to foreign couples with children. It is easy to find a suitable school, and the education level is rather high

The vast majority of labor migrants from the European countries and the USA live in both capitals – Moscow and St. Petersburg. Labor quotas are not extended to foreigners having the status of highly qualified specialists. Their number amounted to 11.6 thousand people or 1.1% from all citizens of other states having permits to work in Russia, according to the results for the first half of 2013. But among highly qualified specialists there are also a lot of citizens from countries of the former Soviet Union.

The most surprising fact is that illegal migrants in Russia are not only from our neighbor countries, with the majority of which there is the visa-free exchange, but also from the West. According to FMS, the number of citizens of the European Union countries who haven't left Russia in a timely manner exceeds nearly four times the number of issued work permits. The number of Americans illegally living in Russia is also measured in the thousands. So the real appeal of Russia is much higher than the official one.

The Official Commentary from the Federal Migration Service

The number of citizens from the European Union countries who have the been issued permits to work in the territory of the Russian Federation remains approximately at the same level from year to year – about 20 thousand people. During the first ten months of 2013 15.7 thousand work permits were issued which is 0.6% more than the same period last year.

According to the automated system of the analytical reporting of the Russian FMS, as of November 14, 2013 (that is, the foreign citizens who entered the territory of the Russian Federation and haven't left in due time) there are 3 million 673 thousand people in the at-risk group. 57.2 thousand of them are from European Union countries, 6.5 thousand people from North American countries (Canada, the USA, and Mexico).

In total, from July 1, 2010 to September 30, 2013 46.9 thousand work permits were issued for highly qualified specialists; 41.6 thousand to citizens of the countries, with which Russia has visa agreements, 5.3 thousand permits to the citizens from visa-free countries. Besides, during the first ten months of 2013 Russian FMS issued 20.7 thousand work permits to highly qualified specialists, that is 2.2 times more, than for the similar period of time in the last year. To foreigners with visas 17.4 thousand and to the ones without visas 3.3 thousand permits were issued.

Among all qualified professionals who have received such status this year, citizens of the EU countries were 5.1 thousand people, of which: Germany - 953, Great Britain - 762, France - 695, Italy - 429 people. Qualified professionals from the United States, 628 permits were issued.

Qualified professionals from the CIS countries for ten months in 2013 obtained 3.3 thousand work permits, of which the largest number: Ukraine - 973, Uzbekistan - 958, Tajikistan - 558 Moldova - 369 documents.

Improvement of the legislation concerning the order to attract highly qualified foreign specialists continues. Due to the amendments made to federal law No. 115-FZ 'About legal status of foreign citizens in the Russian Federation', FMS approved the notification procedure about salary payment to highly qualified specialists, as well as employment cancellation cases or civil contracts, and cases providing holidays to them without salary preservation for more than one calendar month within a year (it is required to notify the amount of remuneration quarterly; about cancellation of employment contracts or providing holiday – not later than three days – RS). The new order is effective starting January 1, 2014.

From next year, the employer of a highly qualified specialist won't have to register such employee for tax purposes. It will be made by FMS within interdepartmental exchange of information with tax authorities after it has received the application for a work permit from the highly qualified specialist.

With the order from FMS, the list of territorial bodies of the Service, authorized to receive and review applications for highly qualified specialists and issues of work permits has expanded from 15 to 83.



Andrey Korovkin, the head of the laboratory of labor force forecasting in the Institute of economic forecasting of the Russian Academy of Sciences

"Migrants from foreign countries, especially from Europe, come to Russia necessarily with visas and with work permits. These people are known as civilized and law-abiding. They will not arrive here in cargo trains. I am sure that the considerable number of them attained the status of highly qualified specialists and a salary of more than 2 million rubles a year. As a rule, they are directors, footballers, and hockey players. We even use a special term for them: they are not guest workers but expatriates.

After the crisis of 2008, quotas for migrants workers were reduced and frozen, but due to the small number of western migrants and specifics of the jobs that they occupy, this step in the state regulation's has had an insignificant impact on the reduction of their numbers. Variability of our immigration laws has very little impact in this category. The economy of our companies plays much more significant role in the reduction of their number and as well as the branches of the western firms, on personnel expenses.

However, now more and more foreign experts are invited to Russia as consultants, teachers, to give lectures in higher education institutions. It is unlikely that they will receive a permit to work. They are here on a temporary basis: they give lectures, and go back home - to their wife and children.

We have few labor migrants from the West, although I don't know why. Are they experiencing 'greenhouse conditions'? At least, a risk level for them is significantly low, than for the average Russian.'


Nikita Mkrtchyan, Institute of a demography of the Higher School of Economy (HSE)

"The subject of labor migration to Russia from the West is interesting, but never explored properly. Perhaps, the reason is that they don't create any problems for us. We are focused on a much more urgent problem of migration from the East, and from the CIS countries. If it was worth studying the migration from the West, we would only study it from the point of view of creating more favorable conditions in those regions, to find out why, for example, even our former citizens don't go to Skolkovo (the Russian analog of a silicon valley – RS).

At HSE, we embarked on hiring up to 30% of foreign expert teachers, who are competitive in the international market. Yes, they create competition for our experts, taking highly paid positions. But this competition is justified; otherwise, we will be stewing in our own juice.

It isn't excluded that among migrants from the West there is an informal employment, too. Though it is hardly possible to enter from these countries (visa order) illegally but to arrive by a usual visa and to work here informally is surely a common practice, considering our bureaucratic red tape. But these people working in large companies, aren't going on strike, the police officer on the street is unlikely to stop them. Though the share of illegal workers among Europeans is very far from the overall legal and illegal migrant workers: which we estimate to be about 30% to 70%.

The main reason why experts from the West are reluctant to come to Russia is the same reason for our reluctance to escape to the west: security. Though we who are living here, perceive this problem more sensitively, than it seems from the outside. For many foreigners who are already living here, our country is pleasant. They are generally little excited by our political problems.


Irina Ivakhnyuk, Dr.Econ.Sci., the professor of economics department of Moscow State University

'Highly qualified specialists are the main channel of labor migration from Western countries. Federal law which has provided them with preferences in obtaining permits to stay and work in Russia was lobbied by the transnational corporations in Russia. Therefore, I doubt that after 2009, that there was a collapse of the western labor and migration toward our way. On the contrary, one would expect such growth.

Dmitry Medvedev who was then president of Russia, soon after adoption of this law declared: 'Russia joined the headhunting". So concerning highly skilled migrants, Russia unambiguously says: 'You are welcome!'

If you look at branch distribution, you will see that labor migrants from the West first of all are involved in financial operations, real estate transactions, and so on. It is the argument of those who in principle are against the involvement of any migrants to Russia. They say that labor migrants are involved in real estate operations. In fact, consultants, for example, are invited by banks which who "dropped" due to unpaid loans issued under the real estate and land plots. It was necessary to understand what to do with such pledges. And since we have no experts in this area, they are invited from abroad.

The other sphere of application of highly skilled western workers. are management positions in the assembly enterprises of automotive industry, productions of household appliances, chain stores, etc.

They are also a lot among researchers and professors of higher education institutions. For professionals, attracted to university and scientific-research centers, and also special economic zones, the minimum annual threshold earnings to qualify for the privilege of applying to the status of the highly qualified specialist and on the right of payment of income tax at the rate of 13%, is lowered to 1 million rubles.

It seems to me, it isn't necessary to give huge benefits to highly qualified specialists. It is one of the few accurately outlined migratory channels in the Russian legislation. It is important to understand that migratory appeal of the country depends not only on immigration legislation, but mostly on the situation in the country as a whole, on the amenities of life, on safety in the streets, etc.

For this reason, Russia is not always appealing to migrants from the West even in conditions of high unemployment there and in the existing "preferential" legislation for them here. Besides, they are afraid of Russia: the rigid political regime, the absence of democratic freedoms and other passions which are painted in the information field, drive public opinion. Though many foreigners say that it is interesting to live in Russia, it isn't boring and that it is a most interesting experience; bustling political, public, and night life, whatever their desire.

Such "extreme" experiences in Russia can be highly appreciated by the migrant worker's subsequent employers, having positively affected his career in the homeland. And for the staff of multinational corporations business trip to Russia is a guarantee of a more rapid career growth".

Andrei Susarov,
correspondent from FinmarketInformational Agency,
Exclusively for Russian Survey RS