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RUFarming in Russia – Immigrating to Russia and Starting a Farm
Although Russia currently lacks a specific program to attract foreign farmers to relocate and do farming in the country, many interesting opportunities are still available! We anticipate the development of such programs shortly. And we can offer valuable information on how to start a farming business in Russia and how to move here.
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General Information on Farming in Russia
According to Russian law, foreign individuals or companies with more than 50% of shares owned by foreign entities are not permitted to own agricultural land in Russia. However, they can enter into long-term leases for agricultural land. Agricultural land is subject to specific regulations. For example, a house built on a farm is not considered part of agricultural land, so foreign individuals can own such a house and the surrounding land for growing crops. Therefore, foreign nationals who wish to move to Russia, live in a small village, grow their food, and keep some animals can purchase or build a house with full ownership rights. Those interested in commercial farming must either lease agricultural land long-term or obtain Russian citizenship to own land legally.
One way to quickly obtain Russian citizenship to purchase agricultural land is by utilizing the employment scheme, either through a third-party employer or by registering and working in one's own company in Russia. However, it is crucial to work in a profession from the qualified list of professions.
Important: Those working in professions in the agricultural sector may qualify for permanent residency in Russia just after 6 months of employment and for citizenship after 12 months.
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Farming specializations in Russia
1. Agroengineer
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-epizootologist16- Specialist in animal science
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
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
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Roadmap to Starting a Farm in Russia
To start your own farming business and gain permanent residency or citizenship in Russia, follow these steps:
1. Register your own company in Russia. Any foreigner can establish a company in Russia, even while on a tourist visa. The most common type of entity for foreign entrepreneurs is a Limited Liability Company (LLC), which can be 100% owned by a foreign national or company. There is no requirement to hire a Russian as a director.
2. Use your company to obtain a work permit in a profession from a specified list and work in that profession for at least 6 months.
3. After 6 months of employment, you can apply for permanent residency.
4. Once you have been employed for 12 months, you can apply for Russian citizenship, which will allow you to purchase agricultural land in Russia.
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Support Measures for Farmers in Russia
GOVERNMENT SUPPORT
The government has established a support program for the agricultural sector, available to both new and experienced farmers. The program offers both non-repayable forms of support such as grants, subventions, and subsidies, as well as repayable forms such as leasing and concessional lending.
SUBSIDIES
Subsidies provide partial compensation for the costs of operating a farm business. Farmers who produce vegetables, fruits, and grains can receive additional land, as well as partial or full reimbursement of their expenses. Subsidies are also available for planting perennial orchards, such as vineyards, and using high-quality seeds for crops. Additionally, subsidies can cover insurance for fields against frost or fire, as well as the construction of facilities like storage or elevators.
Furthermore, subsidies can be used for purchasing agricultural machinery, upgrading existing equipment, or buying agricultural products from cooperative members. Farmers who breed animals can receive subsidies for purchasing young animals, insuring herds, and meeting milk quotas.
For new farmers, there is a program that provides subsidies of up to 300 thousand rubles for peasant (farm) farms to improve drainage systems, and electricity, and purchase agricultural equipment. Another program supports family farms that have been registered as agricultural goods producers for over a year. To qualify, they must present a business plan with 40% of the total budget covered by their own funds, evidenced by a bank deposit statement.
GRANTS
Grants are distributed free of charge through competitions, with the requirement that the recipient meets all specified conditions. The amount of funding provided by the state is based on the type of business activity. For instance, animal husbandry requires more investment and labor, so more funding is allocated to this sector compared to crop production.
Each region has its own set limits for grants. In the Moscow region, the maximum amount of assistance for cattle breeding is 5 million rubles, while for gardeners, fishermen, and others it is 3 million rubles. The funds received can be used for purchasing land and equipment (less than three years old), construction, buying animals (excluding pigs), and covering 20% of the farm's development costs.
Applicants must submit a detailed business plan and a presentation outlining projected costs and expenses when applying for a grant. In the Moscow region, farms registered there for no more than two years and earning an annual income of up to 120 million rubles may be eligible for significant support.
The farm director must hold specialized agricultural education or have at least three years of relevant work experience. Grant recipients are required to utilize the funds within eighteen months and must create and maintain new jobs as part of the agreement.
Payment of the grant is done in installments, with taxes due after each disbursement. Given the substantial amounts involved in supporting farmers, the documentation required for approval is extensive. Farmers should be aware that their use of the funds will be closely monitored post-subsidy approval.
SUBVENTIONS
Subventions are provided to farmers at no cost but must be used for specific purposes. They are typically allocated for housing for farm workers or non-residential buildings like cowsheds or storage facilities. If the funds are not used as intended, they must be returned to the government.
LOANS
On December 29, 2016, a resolution known as Program 1528 was introduced to support agricultural producers. This program, initiated by the Ministry of Agriculture, focuses on identifying systemically important credit institutions that participate in the state program of providing preferential loans to agricultural enterprises.
The preferential loan offered through program 1528 has an annual interest rate cap of 5%, making banking products more accessible and easing the financial burden on producers. The government compensates any lost profits for the banks, ensuring transparency and minimizing the risk of corruption through strict financial supervision and reporting mechanisms.
This form of preferential lending has proven to be a valuable tool for boosting the economy, with over 20.6 billion rubles allocated in 2021 to subsidize financial organizations. While not directly distributed to farmers, this funding indirectly benefits agricultural businesses.
However, not every business executive is eligible for a preferential loan. Specific requirements must be met, including demonstrating a consistent or stable positive profit, maintaining timely payments on existing loans, and adhering to the maximum loan amount of 40 million rubles with a repayment term not exceeding 8 years. Borrowers have the freedom to choose from approved financial institutions designated by the Ministry of Agriculture when applying for a loan under program 1528.
SPECIAL CONDITIONS OF LEASING
The state program also offers leasing with favorable conditions for the acquisition of essential equipment for farming operations. This includes specialized equipment needed for farm work.
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P.S. Our company - «OKA» Agency - specializes in helping people move to Russia.