The authorities expect at least a 50% discount from “unfriendly” non-residents upon exiting the assets of the Russian Federation

“Unfriendly” non-residents must provide at least 50% discount when exiting Russian assets. The corresponding decision was made by the subcommittee of the government commission on control over foreign investment on December 22. Decision publishes Ministry of Finance.

When considering the issue of issuing permits for transactions aimed at the alienation of securities in the authorized capital of Russian business companies by foreign persons associated with foreign states who commit unfriendly actions against the Russian Federation, or by persons who are under the control of these foreign persons, regardless from the place of their registration, proceed from the presence of a number of conditions.

It’s about:

• availability of an independent assessment of the market value of assets;
• sale of assets at a discount of at least 50% of the market value of the relevant assets indicated in the asset valuation report;
• setting key performance indicators for new shareholders;
• availability of payment by installments for 1–2 years and an obligation to voluntarily transfer funds to the federal budget in the amount of at least 10% of the amount of the transaction being carried out.

Formerly Russia introduced temporary restrictions on the exit of foreign business from Russian assets. Same were limited operations with shares in the authorized capital of limited liability companies. If a transaction involves a person who is in one way or another connected with unfriendly countries, it becomes necessary to coordinate it with the government commission for the control of foreign investment. Decree of President Vladimir Putin has been approved a list of 45 credit institutions that can be sold only with his approval.

Maria Fedotova