4/13/23 Conditions for selling businesses from unfriendly countries tightened

In March 2023, a meeting of the subcommittee of the Government Commission for Control over Foreign Investments in the Russian Federation was held. At this meeting, decisions were made on the conditions for the sale of businesses in Russia by owners from unfriendly countries and their affiliates.

In case of such a sale by foreign persons associated with foreign states that commit unfriendly actions in relation to the Russian Federation, Russian legal entities and individuals (including if such foreign persons have the citizenship of these states, their place of registration, the place of their primary conduct economic activity or the place of their primary profit from their activities are these states), or persons who are under the control of these foreign persons, regardless of the place of their registration or the place of their predominant economic activity, proceed, as a rule, from the expediency of establishing the listed conditions for the implementation (execution) of such transactions (operations):

1. Obligation to voluntarily transfer funds to the federal budget in the amount of at least 10% of half of the market value of the relevant assets indicated in the asset valuation report;
2. The obligation to voluntarily transfer funds to the federal budget in the amount of at least 10% of the market value of the relevant assets indicated in the asset valuation report, if the sale of assets is carried out at a discount of more than 90% of the market value of the relevant assets indicated in the asset valuation report.

For entrepreneurs from friendly countries (with whom the Russian-Eurasian Business Broker REAB works), this news means that attractive assets at an affordable price will appear on the Russian market for buying and selling businesses, which means new investment opportunities.