HSP Global Assessment
High Street Partners provided this enterprise solutions software firm based in the Southeast with advice regarding an opportunity in Russia. The company was considering bringing a group of 50 software developers working in St. Petersburg and Novosibirsk (on the Siberian plane) in house, and retained us to determine the options and risks involved in the possible transfer of these employees from their current third party employer to a new Russian subsidiary of the US firm.Business Challenge
High Street Partners was retained only 10 days in advance of the US Board meeting scheduled to discuss the decision, requiring a tight turnaround to review alternatives, flesh out parameters, provide a strategy for the proposed process and perform a cost analysis.
High Street Partners' solution
We began with a conference call with all parties to clarify objectives and define the project scope. Understanding that time zone management was crucial to success, we then involved our UK team to liase with our preferred Russian service providers while our Maryland office coordinated with the client’s headquarters team. Within a week HSP had identified the full range of local Russian compliance requirements and prepared a comprehensive report with the goal of apprising the Board of necessary considerations and cost analyses.
Effective Outcome
Our report, delivered in advance of the meeting, allowed the Board to navigate a minefield of considerations related to taking the developers in house. This deliverable achieved the following:
- Identified the options available with respect to establishing operations in Russia (including consideration of the group holding structure)
- Defined the legal requirements;
- Set out areas for consideration during the establishment process;
- Identified the estimated costs for establishment; and
- Made recommendations for the ongoing financial and compliance management of the Russian entities together with an estimated fee proposal.
In addition, the report provided advice regarding official Russian salary definition and taxation thereon, foreign currency controls, expatriate matters, employment contractual considerations, restructure of employee benefits, impact of granting US stock options, corporate and personal insurances, protection of IP rights, responsibilities of the local and foreign officers and Directors of the Russian entity, bank account set up and management, revenue structuring and transfer pricing, and company secretarial responsibilities.
