On October 30, 2024, the web site of the Russian Ministry of Finance published an extract from minutes of the meeting of the subcommittee of the Government Commission for Control over Foreign Investments in the Russian Federation (hereinafter the "Subcommittee") dated October 15, 2024 No.268/1 (hereinafter the "Extract").

According to the Extract, the conditions for the Subcommittee to issue permits for transactions aimed at alienation of securities (including shares) and stakes in the charter capitals of Russian legal entities by persons of foreign states committing unfriendly acts are changed:

1. The asset needs to be sold at a discount of at least 60% of its market value as determined by an independent appraiser included in the list of recommended appraisers. Previously, the minimum discount on a deal was 50% of the market value.

2. The minimum voluntary contribution to the federal budget is increased from 15% to 35% of the market value of the asset being alienated.

A schedule is provided for paying the contribution: 25% of the market value is to be transferred to the state budget within 1 month from the date of the transaction, 5% within 1 year and the remaining 5% within 2 years.

In addition, if a transaction is made with assets with a market value exceeding 50 billion rubles, consent from the President of the Russian Federation will be required.

This review was prepared by CLS Corporate Law practice Team – Senior Associate Elizaveta Dvoinishnikova and Associate Ekaterina Shilovskaya. We will be happy to advise you on any issues related to transactions involving sale of stakes in charter capitals (shares) of Russian legal entities and to support such transactions.

Additional information

Should any questions arise in connection with the above or if you need any additional materials, please contact the CLS office in St. Petersburg or Moscow.

This information letter keeps clients of CLS and other interested parties abreast of information that may, to some extent, affect their activity or cater to their interests. The opinions and commentaries expressed in this information letter shall not be deemed legal advice and do not cancel the need to obtain legal advice or legal opinion on separate issues.

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