News: Citizens of the Russian Federation who live abroad for more than six months will be released from foreign exchange control

Citizens of the Russian Federation who live abroad for more than six months will be released from foreign exchange control

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Certain amendments were made to the currency legislation. Any citizen of the Russian Federation will be considered as currency resident, and those Russian citizens who live abroad for more than six months will be exempt from currency control.

On October 17, the relevant draft of amendments was introduced in the law on currency control and regulationby the government.

According to many experts, this set of amendments will help to eliminate the ambiguities that periodically arise in the process of determining the currency residence of the citizens of the Russian Federation residing (temporarily/permanently) abroad.

Before the amendments come into effect, not all Russian citizens are considered to be currency residents.

A Russian who temporarily or permanently resides for at least a year in another country is recognized as a non-resident.

When returning to the territory of Russia for at least a day, he again becomes a currency resident. After staying more than 365 days outside of Russia, the citizen is again deprived of the currency residence of this jurisdiction.

Current legislation extends restrictions on currency residents regarding currency transactions, requirements for declaring foreign accounts and reporting on these accounts. Failure to comply with these requirements/restrictions entails fines, the amount of which can often be 100 percent of the amount of the illegal currency transaction.

183 days of residing outside of the Russian Federation

According to the amendments, the currency residence is not a permanent risk for Russian citizens, who live abroad for most of the time.

The requirements regarding the procedure of opening of accounts in foreign banks, the conduct of currency transactions due to the foregoing accounts and the subsequent report on the flow of funds will not be applied to Russian citizens who live outside of Russia for more than 183 days during the year, while the number of entries to the territory of the Russian Federation per year is unlimited.

A citizen of the Russian Federation, who resides abroad for more than 183 days a year, is exempt from currency control requirements.

There is no need to abandon passports anymore.

In the opinion of the same experts, the draft law also eliminates ambiguities due to which a Russian living abroad could lose his non-residency after another short-term arrival to the territory of the Russian Federation.

A citizen who lives outside the Russian Federation for more than 183 days a year will be withdrawn from the restrictions on foreign exchange transactions and does not undertake to notify the Federal Tax Service. In fact, such a citizen is deprived of an unnecessary motivation "to discard a Russian passport," since there will no longer be the concept of "illegal currency transaction"for him.

For more detailed information, please contact the lawyers of Law&Trust International.