Newsletter: Сriteria for obtaining the permission of the Subcommission / MinFin precised

Among the most notable restrictive measures introduced in regard to companies connected with so-called “unfriendly” states operating in Russia is a requirement to receive a special permission for certain transactions from the subcommission of the Governmental commission for the control over the foreign investments in Russia (Subcommission) / the Ministry of Finance. The procedure for obtaining the permissions was previously only specified to the extent of filing of an application for review with the respective authority. On December 30th, 2022, however, the extract from the Minutes of the Subcommission meeting of December 22nd, 2022 No. 118/1 with requirements for granting the permission was made publicly available. Nonetheless, the criteria have been precised only in relation to transactions with shares and to dividends.



Transactions with shares in Russian companies


The following minimum requirements must be met for transactions with shares:

  • availability of the independent appraisal of the market value of the assets of the company/shares to be sold/purchased;
  • sale at a discount amounting to at least 50% of the above mentioned market value;
  • establishment of KPI for the new shareholders;
  • a lump sum payment in the amount of at least 10% of the transaction price to the Russian budget OR payment of the transaction price (purchase price) by installments within 1-2 years.



Payment of dividends


Generally, the total amount of restricted payments (loan interest, dividends, etc.) actually made to foreign persons from the unfriendly states or to persons under their control must not exceed RUB 10M. The payments exceeding this threshold are to be credited to a special type-“C” account, with further disposal of funds being severely limited and / or a special permission of the Ministry of Finance must be obtained for such payments. When granting the permissions in regard to dividend amounts above the aforementioned threshold, the following criteria are relevant:

  • the amount of dividends to be paid must not exceed 50% of the net profit for the previous year;
  • the foreign shareholders must be willing to continue carrying out commercial activities in Russia;
  • establishment of KPI by federal authorities (relevant ministry, e.g., Ministry for Industry and Trade);
  • the company must be able to pay dividends on a quarterly basis, provided the KPI are being met.


Moreover, the Ministry of Finance will review the lookback analysis of the past dividend payments and the government authorities’ evaluation of the influence of the respective company’s activities on Russian economy, technological sovereignty etc. when deciding on issuance of a permission.


Despite the fact that the above conditions may be described as additional restrictions, they do provide some guidance for foreign companies planning to apply for said permissions. With several open questions remaining, further clarifications are to be expected.