The owner of the Moscow brewing company has become a structure from the UAE

Large Russian companies continue to transfer their parent structures to friendly jurisdictions. Thus, the founder of the Moscow brewing company, which produces Khamovniki and Zhiguli Barnoe beer, was a structure from Dubai. This can facilitate the purchase of imported ingredients and equipment, as well as the payment of dividends. But for Russian-related businesses, working in the UAE is also fraught with difficulties, lawyers warn.

The founder of CJSC Moscow Brewing Company (MPC) was Echelon Systems Ltd., registered in Dubai, follows from the Unified State Register of Legal Entities. According to the Dubai International Financial Center (DIFC) registry, Echelon Systems was created at the end of 2023. Previously, the Cyprus-based Echelon Systems Ltd was a shareholder of MPC. The MPC declined to comment.

According to DIFC, Echelon Systems shareholders include Premier Beverages PB, which owns part of the brands produced at MPC, and HC Oasis, which is associated in the market with Messrs. Kashper and Lifshitz. Also listed as shareholders of Echelon Systems are the general director of MPK Igor Dementyev, member of the board of directors Olga Averyanova, ex-head of MPK Alexander Ivanchikov and Andrey Molodykh, who, judging by his profile on Linkedin, was the financial director of MPK.

The change of the parent structure from Cyprus to the UAE meets the trend of transferring the management of holdings to friendly jurisdictions, points out Forward Legal lawyer Maxim Ignatov. Thus, companies from the UAE became the owners of the ITMS tobacco group (brands Dunhill, Kent, Vogue, Rothmans, Lucky Strike) and the Russian structure of the DIY network Leroy Merlin. Pen & Paper partner Kira Vinokurova reminds that transactions with Cypriot companies are limited by special economic measures of the Russian Federation. To issue loans to a non-resident, permission from a government commission is required; payment of dividends requires opening a type C account, she points out.

Nikolai Zhelagin, founder of the “Take a Day Off” chain of beer stores, says that a company in Dubai can be useful for importing hops, as well as purchasing foreign equipment and spare parts. Supplies of the latter to Russia today are directly difficult, which complicates the work of many brewers, he points out. Igor Khavsky, co-owner of the distributor SVAM Group and the Gletcher brewery, however, doubts that the transfer of the head structure to the UAE was necessary to facilitate the work of the MPC. According to him, the Russian company can continue importing beer. The changes could be due to the desire of shareholders to better control the asset and make it easier to receive dividends, Mr. Khavsky believes.

As Kira Vinokurova notes, although the UAE has not joined the sanctions against the Russian Federation, the UAE’s close relations with Western jurisdictions, the prevalence of payments in dollars and integration into the global economic system can create difficulties for businesses associated with Russia. We can talk about refusal to cooperate with such companies, excessively thorough checks of any payments, non-execution of payment orders that violate sanctions, she lists. Maxim Ignatov adds to the disadvantages of re-registering a business in the UAE “significant relocation costs”, as well as the need for tax and other penalty payments, the so-called exit tax. In addition, he points out, additional uncertainty is created by legislative policies, which are generally aimed at encouraging the localization of business rather than managing it from abroad.

Anatoly Kostyrev