News about business, accounting and taxes in Russia

Amendments to intra-group transactions and transactions between foreign persons from 'unfriendly' jurisdictions

In February 2024 the Russian Government revised the rules regarding authorization for intra-group transactions and transactions between foreign individuals from jurisdictions considered 'unfriendly'.

These revisions were made to Government Decree No. 295, issued on March 6, 2022, which governs the granting of permits by the Sub-Commission of the Government Commission for Control over Foreign Investments in the Russian Federation.

The amendments re-affirm the procedure that was previously introduced. This procedure dictates that applications for authorization pertaining to transactions and operations involving securities and shares of Russian companies with authorised capital must include:

  • An independent appraisal report on the market value, prepared by an appraiser from the recommended appraisers list;
  • Key performance indicators and their target values for purchasers of securities and shares.

However, there are now two categories of transactions that no longer require the submission of an independent valuation report and key performance indicators. These categories include:

  • Intra-group transactions;
  • Transactions conducted between foreign individuals from 'unfriendly' jurisdictions.

As a result, applicants are not obligated to provide asset valuation reports and KPIs for these types of transactions when submitting their applications. Additionally, this indirectly means that other standard requirements of the Sub-Commission, such as the 50% discount from the asset value and the 15% exit tax, will also not be applicable to such transactions. These requirements are calculated based on the market valuation of the assets.

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