Increase in Voluntary Contribution and Discount Upon Sale of Shares/Interests in Companies

As expected, the Russian Government Commission has tightened the conditions for issuing authorizations for transactions with respect to shares/interests in companies.

Now, the discount must be at least 60% of the market value of an asset. Previously, it was at least 50%.

A voluntary contribution has been increased to 35% of the appraised market value of shares/interests and will have to be paid as follows:

• 25% within one (1) month from the transaction date;
• 5% within one (1) year from the transaction date; and
• 5% within two (2) years from the transaction date.

Previously, a voluntary contribution was 15% of the appraised market value of shares/interests.

Furthermore, selling or buying any assets valued at more than RUB 50 billion will require approval from the Russian President.

As you may remember, some transactions, such as the sale of interests in limited liability companies or shares in joint-stock companies where one of the parties is a person, whether an individual or a legal entity, from the approved list of ‘unfriendly’ countries, will require an authorization from the Russian Government Commission on Control over Foreign Investments in the Russian Federation that is issued subject to a number of conditions.

We would be pleased to advise you on how to obtain authorizations from the Russian Government Commission in more detail.

If you would like to discuss this matter further or have any questions, please write to Anton Kabakov or Alexandra Yudina.