Putin instructed to speed up the transfer of business assets to Russian jurisdiction

Russian President Vladimir Putin instructed the government to speed up the transfer of assets of companies in key sectors to Russian jurisdiction, as well as launch a mechanism to regain control over domestic companies if they are managed through foreign legal entities. The instructions were given following the results of the St. Petersburg International Economic Forum (SPIEF-2023). Document published on website Kremlin.

As follows from the text of the instructions, it is proposed to speed up the transition of companies to Russian jurisdiction, among other things, by registering foreign companies in special administrative regions (SAR), when the possibility of their redomiciliation is blocked or not provided for by the legislation of the country where they are registered.

The government was also instructed to ensure the launch of a mechanism that will allow Russian persons to regain control over companies managed by foreign legal entities, if it was actually lost due to “unfriendly actions against the Russian Federation, Russian citizens and organizations.” It is proposed to do this, among other things, by replacing the shares of Russian-owned holdings registered abroad with shares of Russian companies included in such holdings.

Orders must be completed by November 30, 2023. Russian Prime Minister Mikhail Mishustin has been appointed responsible for their implementation.

In February, during the announcement of the message to the Federal Assembly, Vladimir Putin called for the deoffshorization of Russian business. In June, during a speech at SPIEF-2023, Mr. Putin urged complete the transfer of Russian business assets to Russian jurisdiction by the end of this year.

In May, the Ministry of Economy reportedthat the department is developing measures that will help businesses move to Russian jurisdiction, bypassing foreign prohibitions.

May 16 State Duma in the first reading accepted draft law on a new procedure for “relocation” of foreign companies to the SAR. The document was criticized in the Presidential Council on Codification and Improvement of Civil Legislation. In June, the Ministry of Economy presented business deoffshorization plan. It, in particular, provides for tax incentives, protection of shareholders, simplification of “relocation” and fine-tuning the regulation of international funds.

More details – in the material “Kommersant” “A new path will be paved to “Russian offshores””.

Olesya Pavlenko