By the Government Decree No. 1651 dated 19 September 2022 (hereinafter – “Decree”) the Government of the Russian Federation extended the previously adopted Rules¹ to the transactions with the shares of Russian LLC for persons from "unfriendly" countries. The Decree came into force on 20 September 2022.
Thus, the transactions involving “unfriendly non-residents” which directly and/or indirectly entail the establishment, modification or termination of the rights of ownership, use and/or disposal of shares, as well as other rights that allow determining the conditions of management and/or entrepreneurial activity of an LLC, can be carried out/executed only upon obtaining permits from the Government Commission.
To obtain a permit of the Government Commission, the following should be provided:
- an application (in prescribed form);
- a request for a permit with information on the purpose, subject, content and essential terms of the transaction, number of votes attributed to the share acquired as a result of the transaction (operation), planned validity period of the permit (in free form);
- applicant’s state registration certificate – for legal entities or individual entrepreneurs; legal entities can also provide other documents confirming incorporation;
- an identity document of the applicant – for individuals;
- a document confirming incorporation – for foreign organizations that are not legal entities in Russia the document is to be provided in accordance with the legislation of the states where they were established;
- founding documents of the applicant – for a legal entity;
- a document containing information on beneficiaries, beneficial owners, persons exercising control over “unfriendly” non-resident (controlled persons) who is involved in the transaction (participates in the operation) and on the signs of such control;
- a list of transferred documents.
The documents shall be submitted in Russian in stitched form and shall be certified by the applicant's seal (if available). If the documents are in a foreign language, they should be apostilled (or legalized) and submitted to the Government Commission with a notarized translation into Russian.
If the documents are submitted by an individual, the documents shall be certified by the signature of an individual in the presence of a notary. The documents may be submitted by a representative who has a notarized power of attorney or other document confirming the authority to submit documents. The documents may be submitted by any party to the transaction, both a resident and an unfriendly non-resident.
The application and the attached documents may be submitted on paper or in electronic form, including the form of electronic documents signed using an electronic digital signature. The application and the attached documents can be sent to the Ministry of Finance of the Russian Federation by e-mail, by post or in person.
The Commission's permission to carry out a transaction or refusal to issue a permit is a formal decision of a sub-commission, which consists of one representative each from the Administration of the President of the Russian Federation, the Ministry of Economic Development of the Russian Federation, the Central Bank of the Russian Federation and is headed by the Minister of Finance of the Russian Federation. The Sub-Commission considers applications and documents and makes decisions at the meetings of the sub-commission or by absentee voting. Decisions are taken unanimously. At the same time, there are no specific deadlines for the consideration of documents. In practice, it may take 2-3 months.
Marillion legal practice team follows the news on the issue and is ready to provide support when applying for a permit from Government Commission.
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¹ Rules for issuing Permits by the Government Commission for the Control of Foreign Investment in the Russian Federation in order to implement additional temporary economic measures to ensure financial stability of the Russian Federation and other permits provided for by separate Orders of the President of the Russian Federation, as well as the exercise of other powers for these purposes
