Putin instructs govt to accelerate process for businesses to transfer assets from overseas to Russia

MOSCOW. Aug 17 (Interfax) - Russian President Vladimir Putin instructed the government by November 30, 2023 to simplify the procedure for redomiciliation of businesses to Russian special administrative regions (SAR) in cases where the "relocation" is blocked by foreign jurisdictions.

The instruction was issued following the results of the XXVI St. Petersburg International Economic Forum, held on June 14-17, 2023. The list of instructions is published on the Kremlin website.

It says that the government, with the participation of leading public associations of entrepreneurs, should "accelerate the transfer of business assets, primarily in key sectors and areas of the economy, to Russian jurisdiction." This must be done, including via the use of SAR to register the companies if the standard procedure is blocked or not provided for by the legislation of a foreign state.

Also, the government was instructed to "ensure the launch of a mechanism by November 30 that allows Russian persons to restore control over domestic companies in cases where such control is exercised via foreign legal entities and has actually been lost" due to the unfriendly actions of other states. Restoration of control can be ensured, the order states, "including by replacing the shares of holdings registered in foreign jurisdictions owned by Russian persons with shares of Russian companies included in such holdings."

The document does not specify how the order relates to laws N470-FZ and N452-FZ which were adopted in July. The first allows Russian beneficiaries of economically significant domestic organizations to receive direct dividends from them through the courts, as well as equity and a share in direct ownership, bypassing foreign structures from "unfriendly" jurisdictions. The second law creates a new way to transfer assets to the SAR from abroad: it allows companies registered abroad to establish subsidiaries in the SAR, subject to the transfer of assets to them, as well as to exchange shares of redomiciled companies for securities of international companies which are residents of the SAR.