Small and medium enterprises from affected industries can withdraw from their lease
On May 22, 2020, the State Duma passed[1] in the third and final reading a law on emergency measures to support the economy amid the spread of coronavirus.
Among other things, Part 4 was added in Article 19 of Antivirus Federal Law No. 98-FZ Amending Certain Legislative Acts of the Russian Federation on Emergency Prevention and Mitigation.
This new rule provides that if tenants fail to reach an agreement with their landlord on rent reduction or otherwise change the terms of their lease, tenants will be able to withdraw from their lease agreement until October 01, 2020 without filing a court claim for rent reduction and without having to pay for withdrawing from their lease, as well as pay penalties or damages to the landlord. However, in such case, tenants will lose their security deposit.
Only small and medium enterprises (SMEs) from the most affected sectors of the economy will be able to apply and enjoy this new rule.
The Federal Tax Service recommends determining whether a company is an SME based on the list approved by Russian Government Decree N 434[2] dated April 3, 2020 and the code of main type of activity as specified in the State Register of Legal Entities/State Register of Individual Entrepreneurs as of March 1, 2020.
We look forward to advising you in more detail on any questions you may have about rent adjustment as well as any other measures introduced by the government to support companies.
If you have any further questions, please feel free to write to Mikhail Borodin and Julia Talagaeva.
Truly yours,
[1] https://sozd.duma.gov.ru/bill/953580-7
[2] Russian Government Decree N 434 Approving the List of Sectors of the Russian Economy the Most Affected by the Consequences of the Spread of Coronavirus dated April 3, 2020