The Government of Russian Federation has issued the decree № 1723-р., which states the ways for legislative improvement (the so-called “road map”) in corporate governance and business climate improvement. The introduction of amendments to the Federal Law On International Companies and International Funds in terms of specification of requirements to the foreign legal person, which may be granted a status of international company or international fund, was scheduled as one of the planned changes.  

More specifically, the RF government has decided to increase the geography of countries whose legal persons will be able to "move" to special administrative regions - Russky Island and Oktyabrsky Island. Now, the bill has already been submitted to the Ministry of Economic Development and the Bank of Russia, which is ahead of the terms specified in the road map. This allows us to conclude that the legislators are loyal to the changes, which means that the respective law may already appear already in early 2021, and not in May, as planned by the RF government. However, this bill has not yet been seen by the State Duma deputies, whom the final decision on the adoption of these changes remains with.

How will the law be changed after amendments? These amendments will increase the number of regional groups having the opportunity to change their legal address and “move to” Russia, i.e. redomicile. The legislators try to attract national and foreign capital, creating a special zone with a tax haven regime. The company even from the so-called FATF ‘greylist (offshore) zones’, i.e. the countries not observing their recommendations (for instance, not disclosing ultimate beneficiaries), for example, the Bahamas, Mauritius, Panama, Samoa and the Seychelles, will be able to move to the Russian haven.  

For those who are already going to return to their native jurisdiction, we should note that this bill has not been even considered by the State Duma deputies. There is every reason to believe that it will be amended and the likelihood of adopting this bill is quite high.

The lawyers of Law & Trust will continue to closely follow the progress of adoption of amendments and regularly inform our dear readers about the key changes in this bill. Our company is always on the periphery of international corporate relations, which allows us to analyze risks and offer creative solutions from the top of our experience. If you have any questions after reading this article, we will be happy to answer them. Feel free to call us during working hours at the phone number indicated on our website