Putin's decree says 3 Russian SAR residents fulfilled requirement to quit foreign legal entity registers
MOSCOW. Jan 9 (Interfax) - Russian President Vladimir Putin has signed a decree, confirming that three companies redomiciled to Russian special administrative regions (SARs) have fulfilled a requirement to leave the legal entity register in the countries of their former registration even though foreign authorities refused to remove them from the register.
Decree No. 1 "On the specifics of the legal status of businesses with international company status", dated January 3, 2024, was published on the online database of legal information on Wednesday.
According to the list contained in the document, the requirement to quit a foreign register of legal entities has been fulfilled by Wandle Holdings Ltd. (a shareholder of PJSC Polyus ), international limited liability company Adorabella and international limited liability company Chlodwig. Wandle Holdings Ltd. relocated from Cyprus to a Russian special administrative region back in March 2022.
The other two companies hold 43.6% of shares of PJSC PhosAgro and were redomiciled from Switzerland in April 2022. Prior to that, they were known as Chlodwig Enterprises AG and Adorabella AG. The Guryev family owned the main stake in PhosAgro through them before the spring of 2022. Chlodwig and Adorabella were added to the U.S. SDN List in November 2022.
This decision was adopted because the aforementioned companies were denied removal from foreign registers "for reasons that are unsubstantiated and beyond their control" and "even though they timely finalized all necessary procedures," the decree said.
The document also paves the way for expanding the number of SAR residents whose fulfillment of the aforementioned requirement will be recognized. SAR residents will be added to this list upon the government's recommendation and by presidential decrees.
Russia's legislation requirements companies redomiciled to SARs to secure their removal from the legal entity register in the country of their previous registration within a two-year period. Breaching these requirement may entail a number of negative consequences for SAR residents with international holding company status, one of them being the loss of this status and of a number of tax incentives provided to them. However, not all companies can abide by this requirement due to being denied assistance from foreign authorities, foreign notaries, lawyers, etc., Russian officials said earlier.
Over the past year and a half, Russian authorities have been discussing different potential solutions to this issue, with options ranging from extending deadlines for quitting a foreign register to recognizing this requirement as fulfilled based on the decision of the Russian government's foreign investment commission.
A law adopted in late December 2023 allows SAR residents to repeatedly extend the deadline for quitting their previous jurisdiction via the governmental commission if they were denied removal from foreign registers at their request for reasons that are "unsubstantiated or beyond their control."