FARMING IN RUSSIA
Roadmap to starting a farm in Russia and immigrating
Under Russian legislation foreign national or company that has more than 50% of shares owned by foreign capital can’t own agricultural land in Russia. It is possible though to long term lease the agricultural land. Agricultural land is a special regime of land usage. House build on a farm, for example is not build on an agricultural land, so foreign national can own such a house and the land plot surrounding the house that could be used to grow crops. So, for those foreign nationals that want to move to Russia and live in the small village and have their food to grow and some animals – it is possible to purchase or build a house and have full ownership of it. Those that want to do farming as a business - its either long term lease of agricultural land or obtaining of Russian citizenship to be able to own the land.
The way to obtain Russian citizenship relatively fast in order to be able to purchase agricultural land is through employment scheme either with a third-party employer or through registering own company in Russia and be employed in it but what is essential in a profession from the qualified list of professions.
Under Russian legislation foreign national or company that has more than 50% of shares owned by foreign capital can’t own agricultural land in Russia. It is possible though to long term lease the agricultural land. Agricultural land is a special regime of land usage. House build on a farm, for example is not build on an agricultural land, so foreign national can own such a house and the land plot surrounding the house that could be used to grow crops. So, for those foreign nationals that want to move to Russia and live in the small village and have their food to grow and some animals – it is possible to purchase or build a house and have full ownership of it. Those that want to do farming as a business - its either long term lease of agricultural land or obtaining of Russian citizenship to be able to own the land.
The way to obtain Russian citizenship relatively fast in order to be able to purchase agricultural land is through employment scheme either with a third-party employer or through registering own company in Russia and be employed in it but what is essential in a profession from the qualified list of professions.
These are the professions from the agricultural sector that would allow one to obtain permanent residency in Russia after 6 months of employment and citizenship after 12 months
1- Agroengineer
2- Agronomist
3- Agrochemist
4- Veterinary and sanitary doctor
5- Veterinary and sanitary expert
2- Agronomist
3- Agrochemist
4- Veterinary and sanitary doctor
5- Veterinary and sanitary expert
6- Veterinarian
7- Veterinary gynecologist
8- Veterinarian of the reproductive zone
9- Veterinary therapist
10- Veterinarian-epizootologist
7- Veterinary gynecologist
8- Veterinarian of the reproductive zone
9- Veterinary therapist
10- Veterinarian-epizootologist
11- Hydro – meliorator
12- Milking Machine Operator
13- An employee in the field of veterinary medicine
14- Specialist in the field of agricultural mechanization
15- Specialist in aquatic bioresources and aquaculture
12- Milking Machine Operator
13- An employee in the field of veterinary medicine
14- Specialist in the field of agricultural mechanization
15- Specialist in aquatic bioresources and aquaculture
16- Specialist in animal science
17- Technologist of the food and processing industry
18- Technologist of production and processing of agricultural products
19- Tractor driver-combine harvester
20- Tractor driver-driver of agricultural production
21-Tractor operator
17- Technologist of the food and processing industry
18- Technologist of production and processing of agricultural products
19- Tractor driver-combine harvester
20- Tractor driver-driver of agricultural production
21-Tractor operator
Russia does not have specially designed program to attract foreign farmers to relocate to Russia and do farming, but that doesn’t mean there are no ways to do it. We believe that such programs would be developed in the nearest future but before that happens, we will provide you with essential information on how to open your farming business in Russia.
For starting your own farming business and obtain permanent residency or citizenship in Russia the plan would be:
- Register in Russia your own company Any foreign national can set up a company in Russia even being on a tourist visa in Russia. Most common entity registered in Russian by foreign entrepreneurs is Limited Liability Company. Foreign national or foreign company can be a 100% owner of such LLC and there is no legal requirement to hire a Russian as a general director as in some countries.
- On behalf of own company obtain work permit in one of the professions from the list above and work for 6 months in that profession
- Obtain permanent residency after 6 months of employment
- After 12 months of employment apply for Russian citizenship that would entitle you to purchase agricultural land in Russia
For more information on setting up business in Russia please visit our website www.startuprussia.com
GOVERNMENT SUPPORT
To develop business in the agricultural sector, a government support program was created, which both beginners and experienced farmers can count on.
Government programs are provided both on a gratuitous basis (grant, subvention, subsidy) and on a reimbursable basis (leasing, concessional lending).
Government programs are provided both on a gratuitous basis (grant, subvention, subsidy) and on a reimbursable basis (leasing, concessional lending).
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SUBSIDIES
Subsidies allow you to compensate partially the costs of farming business. Farmers engaged in the cultivation and processing of vegetables, fruits and grains can count on the allocation of additional land, partial or full reimbursement of their cost.
You can also count on subsidies by planting perennial orchards (including vineyards) or using expensive seeds of elite plant varieties in your crops. Subsidies are allocated for insurance of sown fields (for example, against frost or fire), as well as for the construction of facilities (for example, a vegetable store or an elevator).
Subsidies are allocated for the purchase of agricultural machinery in order to upgrade or replace existing machines, as well as for the purchase of agricultural products from the members of farming cooperative. In addition, you can receive a subsidy for the purchase of property with its subsequent re-registration to the members of the cooperative.
Farmers involved in breeding animals are given subsidies for the purchase of young animals (calves, heifers, poultry), for herd insurance, and sold milk falls under quotas.
For beginner farmers, the program of assistance to peasant (farm) farms is suitable, subsidies for which amount to 300 thousand rubles. Money can be spent on summing up or improving drainage systems and electricity, buying agricultural equipment.
Another subsidy program is aimed at supporting family farms. To receive money, a home farm must have been registered as a producer of agricultural goods for more than a year, and also provide a business plan, own funds in which should be 40% of the total budget. The proof will be an extract from the deposit in the bank.
You can also count on subsidies by planting perennial orchards (including vineyards) or using expensive seeds of elite plant varieties in your crops. Subsidies are allocated for insurance of sown fields (for example, against frost or fire), as well as for the construction of facilities (for example, a vegetable store or an elevator).
Subsidies are allocated for the purchase of agricultural machinery in order to upgrade or replace existing machines, as well as for the purchase of agricultural products from the members of farming cooperative. In addition, you can receive a subsidy for the purchase of property with its subsequent re-registration to the members of the cooperative.
Farmers involved in breeding animals are given subsidies for the purchase of young animals (calves, heifers, poultry), for herd insurance, and sold milk falls under quotas.
For beginner farmers, the program of assistance to peasant (farm) farms is suitable, subsidies for which amount to 300 thousand rubles. Money can be spent on summing up or improving drainage systems and electricity, buying agricultural equipment.
Another subsidy program is aimed at supporting family farms. To receive money, a home farm must have been registered as a producer of agricultural goods for more than a year, and also provide a business plan, own funds in which should be 40% of the total budget. The proof will be an extract from the deposit in the bank.
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GRANTS
Grants are issued free of charge through competitions, but with the condition that the recipient of state support fulfills all the stated conditions.
The amount received from the state depends on the type of activity of the business. For example, animal husbandry is more costly and labor-intensive, and more money has been allocated for this direction than for crop production.
Each region has its own limits on the size of the grant. For example, in the Moscow region for cattle breeding, the maximum amount of assistance is 5 million rubles, for gardeners, fishermen and others - 3 million rubles.
The amount received can be spent on the purchase of land and equipment (not older than three years), construction, purchase of animals (except for pigs), as well as payment of 20% of the cost of creating and developing the farm.
At the time of applying for a grant, the farmer must have a business plan with a detailed description of the project, as well as a presentation with an analysis of upcoming costs and expenses.
In the Moscow region, farms registered in that region, operating for no more than two years and receiving an annual income of no more than 120 million rubles, can count on major assistance.
There are also special requirements for the director: he must have a specialized secondary or higher agricultural education, or work experience in the specialty of at least three years.
After receiving a grant, it is necessary to use the received funds within one and a half years. An important condition, which will be closely monitored, will be the creation of new jobs and their subsequent preservation.
The grant is paid in installments, after each receipt you need to pay taxes. Since the allocated amounts to support farmers are considerable, the list of documents for awarding a grant is impressive.
It is important to remember that after receiving subsidies, farmers will be supervised in order to control the intended use of money.
The amount received from the state depends on the type of activity of the business. For example, animal husbandry is more costly and labor-intensive, and more money has been allocated for this direction than for crop production.
Each region has its own limits on the size of the grant. For example, in the Moscow region for cattle breeding, the maximum amount of assistance is 5 million rubles, for gardeners, fishermen and others - 3 million rubles.
The amount received can be spent on the purchase of land and equipment (not older than three years), construction, purchase of animals (except for pigs), as well as payment of 20% of the cost of creating and developing the farm.
At the time of applying for a grant, the farmer must have a business plan with a detailed description of the project, as well as a presentation with an analysis of upcoming costs and expenses.
In the Moscow region, farms registered in that region, operating for no more than two years and receiving an annual income of no more than 120 million rubles, can count on major assistance.
There are also special requirements for the director: he must have a specialized secondary or higher agricultural education, or work experience in the specialty of at least three years.
After receiving a grant, it is necessary to use the received funds within one and a half years. An important condition, which will be closely monitored, will be the creation of new jobs and their subsequent preservation.
The grant is paid in installments, after each receipt you need to pay taxes. Since the allocated amounts to support farmers are considerable, the list of documents for awarding a grant is impressive.
It is important to remember that after receiving subsidies, farmers will be supervised in order to control the intended use of money.
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SUBVENTIONS
Subventions are transferred to farmers free of charge, but have a specific purpose. As part of state support, they are allocated for the construction or purchase of housing for farm workers, as well as for the construction of non-residential buildings for the needs of the farm. For example, cowsheds, vegetable stores or garages. In case of misuse, the money received will have to be returned to the state.
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LOANS
In order to support producers of agricultural products, on December 29, 2016, a resolution was issued, called program 1528
Its essence lies in the fact that the Ministry of Agriculture draws up a list of systemically important credit institutions that participate in the state program of preferential lending to agricultural enterprises.
The preferential loan does not exceed the threshold of 5% per annum, which makes banking products more affordable and reduces the financial burden on manufacturers, and the government compensates all lost profits for banks. This mechanism eliminates the risks of corruption: everything in a financial institution is under strict supervision, and the state receives reports on all operations.
Preferential lending is a convenient tool for expanding the capabilities of the economy: in 2021, the state allocated more than 20.6 billion rubles to subsidize financial organizations, which means that the country's farmers received this money, although not directly.
But not every business executive gets the opportunity to get a loan on favorable terms, it is necessary to meet a number of requirements:
• only those enterprises whose profit is constantly growing or is at a stable positive level can apply for a preferential loan
• the borrower is allowed to have existing loans, but delays on them are unacceptable
• financial institutions issuing preferential loans are appointed by the Ministry of Agriculture, but the borrower himself has the right to decide which bank from the list to apply to
• the maximum amount of the requested loan should not exceed 40 million rubles, the loan term should not exceed 8 years.
Its essence lies in the fact that the Ministry of Agriculture draws up a list of systemically important credit institutions that participate in the state program of preferential lending to agricultural enterprises.
The preferential loan does not exceed the threshold of 5% per annum, which makes banking products more affordable and reduces the financial burden on manufacturers, and the government compensates all lost profits for banks. This mechanism eliminates the risks of corruption: everything in a financial institution is under strict supervision, and the state receives reports on all operations.
Preferential lending is a convenient tool for expanding the capabilities of the economy: in 2021, the state allocated more than 20.6 billion rubles to subsidize financial organizations, which means that the country's farmers received this money, although not directly.
But not every business executive gets the opportunity to get a loan on favorable terms, it is necessary to meet a number of requirements:
• only those enterprises whose profit is constantly growing or is at a stable positive level can apply for a preferential loan
• the borrower is allowed to have existing loans, but delays on them are unacceptable
• financial institutions issuing preferential loans are appointed by the Ministry of Agriculture, but the borrower himself has the right to decide which bank from the list to apply to
• the maximum amount of the requested loan should not exceed 40 million rubles, the loan term should not exceed 8 years.
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SPECIAL CONDITIONS OF LEASING
The state program provides assistance with the return. This is a leasing program with benefits for the purchase of special equipment needed for farms. The offer also includes special equipment.
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