Restrictions have been introduced on transactions (operations) being completed in relation to membership interests in the charter capital of Russian LLCs
Pepeliaev Group advises that, starting from 8 September 2022, Decree No. 618 of the Russian President dated 8 September 2022 (the “Decree”) has established new requirements for completing transactions (operations) the subject matter of which are membership interests in the charter capital of Russian limited liability companies (LLCs).
The Decree introduces the requirement for permission to be obtained from the Governmental Commission for Controlling Foreign Investments into Russia (the “Governmental Commission”) for completing transactions (operations) in relation to membership interests in the charter capital of Russian LLCs, if such transactions are completed between:
residents and “hostile”  non-residents (parties under their control);
“hostile” non-residents and other non-residents.
At the same time, the condition for the need to obtain permission from the Governmental Commission does not apply to:
transactions (operations) in relation to membership interests in the charter capital of credit and non-credit financial institutions;
legal relations in the sphere of implementing the Sakhalin-2 project, which are regulated by Decree No. 416 of the Russian President dated 30 June 2022,
legal relations in the financial and the fuel and energy sectors, which are regulated by Decree No. 520 of the Russian President dated 5 August 2022.
What to think about and what to do
In the sense of clause 1 of the Decree, permission of the Governmental Commission is necessary not only to enter into a sale and purchase agreement for a membership interest but also to complete any transactions (operations) which directly and/or indirectly lead to the establishment of, a change in, or the termination of rights of ownership, the use or disposal of membership interests, as well as other rights which allow the condition to be determined for a Russian LLC to manage and/or pursue entrepreneurial activities. Consequently, depending on the provisions of a certain agreement, it may become necessary to obtain permission from the Governmental Commission, including for entering into corporate agreements, options, or pledges of membership interests.
Help from your adviser
Pepeliaev Group’s lawyers have significant experience of providing comprehensive legal support with regard to all corporate regulation issues.
Our experts are keeping track on a daily basis of the new amendments in corporate legislation. They are ready to provide recommendations on how to choose the best solutions for business with respect to any issues of corporate law.
 Decree No. 618 dated 8 September 2022 “On the procedure for completing (accomplishing) individual types of transactions (operations) between certain persons”. Came into force on 8 September 2022.
Available in electronic format: http://publication.pravo.gov.ru/Document/View/0001202209080027.
The list of “hostile states” is set out in Decree No. 81 of the Russian President dated 1 March 2022.