Decree No. 618 introduced a restriction on transactions with shares of Russian LLCs owned directly or indirectly by unfriendly residents, entailing directly and (or) indirectly the establishment, change or termination of the rights of ownership, use and (or) disposal of shares in authorized capitals of limited liability companies (with the exception of credit institutions and non-credit financial institutions) or other rights that make it possible to determine the conditions for managing such limited liability companies and (or) the conditions for their entrepreneurial activities. The list of unfriendly states was approved by Decree No. 430-р. Permit to make transactions specified in Decree 618 shall be issued by the Government Commission for Control of Foreign Investments in the Russian Federation in accordance with the Rules approved by Decree No. 295 of the Government of the Russian Federation dated March 06, 2022.

22.12.2022 Decree No. 942  has been published. The Government received the right to issue temporary permits for transactions, which are listed in Decree No. 252 dated May 03, 2022.

30.12.2022 The criteria for permitting the sale of shares and the withdrawal of dividends by shareholders and owners from unfriendly states were published (transactions listed in Decrees No. 254 dated May 03,.2022 and 618 dated September 08, 2022). An extract from the protocol is published on the website of the Ministry of Finance.

Get consultation and legal advise

Payment of dividends

Regular procedures

How to pay dividends: requirements, procedures and documents.

Special procedures

Decrees from 05.03.2022 № 95 and from 04.05.2022 № 254 established a special procedure for paying dividends to JSCs and distributed profits of LLCs in favor of foreign members (shareholders). The procedure involves making payments through a special account of type “C”, if the amount of obligations exceeds RUB 10 mln per calendar month. Payment of dividends in a different way consequently requires a permit. According to the extract from the minutes of the subcommittee of the Ministry of Finance, the requirements for subsidiaries to obtain permits to pay dividends and the approaches of the commission for issuing these permits are as follows:

  • “the amount of paid profit is not more than 50% of the total net profit of the previous year;
  • a retrospective analysis of the payment of dividends for previous periods is carried out;
  • foreign owners are ready to continue commercial activities in Russia;
  • federal executive authorities (depending on the subsidiary’s industry profile) have provided criteria for the significance of the company’s activities and an assessment of its impact on Russia’s technological and industrial sovereignty;
  • relevant departments have set quarterly key performance indicators (KPIs) for these organizations;
  • it is possible to pay dividends on a quarterly basis, subject to the achievement of the set KPIs.”

23.03.2023 Ivan Chebeskov, the director of the department of financial policy of the Ministry of Finance of Russia, stated: “We are talking about the principles of working with foreign companies here, how they can pay dividends to their parent companies from here. […] This principle is already in effect, decisions are already being made. As a rule, for companies that remain with us, we use an approach where they can pay up to 50% of the net profit from the previous year.” The procedure for issuing permission: “The government commission, when making a decision on dividends, considers each company on an individual basis, and the permission is issued by the Ministry of Finance in agreement with the Bank of Russia.” What does the Ministry of Finance take into account: “If the company has never paid dividends before and now wants to pay all accumulated profits for five years, then it looks a little strange. But if the company has systematically paid dividends, provided returns to shareholders and continues to work here, then we say: please pay 50%, but pay quarterly, based on certain quarterly key performance indicators of efficiency” (TASS).

22.06.2023 Dividend payments to foreign shareholders decreased from 2.9 trillion (2021) to 1.1 trillion (2022) rubles (RBC).

12.07.2023 The same approaches described above for making decisions on issuing permits for the payment of profits (dividends) to foreign creditors are listed again in the excerpt from the decision of the sub-commission of the Government Commission for the Control of Foreign Investments in the Russian Federation dated July 7, 2023, No. 171/5 (Ministry of Finance of the Russian Federation).

23.08.2023 The terms of payment of dividends to foreign shareholders from “unfriendly countries” have been changed. News from the website of the Ministry of Finance of the Russian Federation: “payment of dividends (profits) to foreign persons may be made without restrictions, but its volume must not exceed the amount of investments in Russia. Also among the conditions for dividend payment: investment by foreign investors in the Russian economy starting from April 1, 2023, including expansion of production in Russia and development of new technologies. Previously, dividend payments could not exceed 50% of the previous year’s total net profit, provided that KPIs were met.”

23.08.2023 Only the investments which have been made after April 1, 2023, including the expansion of production in Russia and the development of new technologies count for the purpose of this condition, as it is formulated in the Extract from the minutes of the meeting of the subcommittee of the Government Commission on Control over Foreign Investments in the Russian Federation of August 9, 2023, No. 182/5.
Previously, the amount of dividend payments could not exceed 50% of the total net profit of the previous year, provided that the set KPIs were met.

Thus, in order to obtain permission to pay dividends, it is now recommended to provide evidence of the presence of “investments in the Russian economy”, “expansion of production volumes” and “development of new technologies”, as well as documents reflecting the amount of funds invested after April 1, 2023.

Which companies managed to obtain permission to pay dividends?

21.07.2023 Metro and Globus received special approval from the Russian Ministry of Finance to repatriate profits from Russia to Germany (t-online). According to the publication, Metro and Globus had to promise, among other things, that they would not withdraw from Russia.

Taxation of dividends after suspension of terms of double taxation avoidance agreements

Our support

We serve more than 200 international companies and constantly monitor the situation with dividend payment terms. Contact us if you have any questions about choosing the best course of action, or about paperwork, filing applications and interacting with government authorities.

Get consultation on the options of dividend payments

Permit to sell shares in companies and exit Russian market

Approval from the Federal Antimonopoly Service

If the transaction amount exceeds 7 billion rubles, approval from the Federal Antimonopoly Service (FAS) is required before submitting it to the Government Commission. The Government Commission and tax authorities may register the transaction without this approval, but the transaction will be disputable.

Approval from the Government commission under the Ministry of Finance

Criteria, approaches and requirements

30.05.2023 An assessment of the situation and scale of sales was conducted by the Central Bank of Russia (CBR). According to the CBR’s review, “From March 2022 to March 2023, foreign investors carried out approximately 200 transactions to sell their Russian assets. Around 20%, or 40 transactions, were associated with the withdrawal of non-residents from large assets, each valued at over $100 million. Since October 2022, there have been five transactions with an average check exceeding $400 million. According to Bloomberg’s calculations, foreign companies that left Russia sold assets worth $15-20 billion in 2022. The AK&M agency estimated the volume of such sales at $16.31 billion last year. Overall, the CBR believes that non-residents’ transactions for the sale of Russian assets carry elevated risks.”

“Firstly, the change of ownership in individual cases leads to a ‘complete restructuring of the business model of the acquired company.’ This refers to situations where companies have to change their supply chains if they were previously based on interaction with counterparties from unfriendly countries and depended on foreign supplies. To mitigate such risks, the government subcommittee examines ‘various aspects of future business operations’ before approving the deal.”

“‘Priority is given to buyers with relevant industry experience as well as leading businesses in related sectors.'”

“Many non-residents, when exiting their assets, ‘leave themselves the opportunity to return,’ for example, agreements include corresponding options.”

“‘The paltry $1.5 billion’ required for settlements with Shell ‘could not be purchased in sufficient quantities in dollars and euros on the market.’ The company was forced to buy half of the available yuan on the market, thus triggering the current yuan liquidity crisis… ‘Buyers are advised to evenly distribute the acquisition of currency on the domestic currency market'” (RBC).

Criteria for resolving on the permit to sell shares by foreigners “associated with unfriendly states”:

  • “availability of an independent assessment of the value of assets;
    • March 27, 2023 “Taking into account the discussion that took place, as well as in addition to the minutes of the meeting of the Subcommittee of December 22, 2022 No. 118/1, the Subcommittee recommends that applicants simultaneously submit expert opinions prepared by an expert or experts of a self-regulatory organization of appraisers in accordance with Article 17.1 of the Federal Law of July 29, 1998 No. 135-FZ “On appraisal activity in the Russian Federation” along with the report on the assessment of the market value of assets.” (Ministry of Finance of the Russian Federation)
    • 25.08.2023 Reuters on the price of deals: “Moscow demands big discounts from foreign companies leaving Russia”. Reuters sources say the Government Commission is demanding more discounts before approving deals. “The commission approves about 90% of the deals and meets twice a week to review applications.”
      Potential Red Flags: buyer’s lack of experience in the business area of the company being sold, the presence of intermediate buyers, and questions about asset valuations.
      Procedure: “After evaluation, the Ministry of Finance submits the application for consideration to the commission, which includes representatives of the Central Bank of the Russian Federation and specialized ministries.
    • 26.08.2023 “The subcommittee does not force the final price down. The valuation is not done by the commissioners but by an independent valuer. The price may change only if the commission points to an incorrect assessment of the market value of the foreign business,” – Ministry of Finance.
  • availability of payment by installments for the buyer for one or two years or payment of a voluntary contribution to the federal budget equal to at least 10% 15% (06.10.2023 Ministry of Finance) of the transaction amount.
    • March 27, 2023 Voluntary contribution is now an obligation: “when considering the issue of granting permits for the implementation (execution) of transactions (operations)… usually proceed from:
      1. the obligation to make a voluntary transfer of funds to the federal budget in the amount of not less than 10% of half the market value of the corresponding assets indicated in the asset appraisal report;
      2. the obligation to make a voluntary transfer of funds to the federal budget in the amount of not less than 10% of the market value of the corresponding assets indicated in the asset appraisal report, in case the sale of assets is carried out with a discount of more than 90% of the market value of the corresponding assets indicated in the asset appraisal report.” (Ministry of Finance of Russia)

      Thus, now the voluntary payment to the budget cannot be replaced by installment payments, and the payment amount must be from 5 to 10% of the asset value, depending on the size of the discount. Other recommendations (including the discount of 50%) remain in force.

      15.08.2023 From December 2022 to August 10, 2023, the budget received 57 billion rubles from “voluntary contributions” from the sale of assets (RBC).

    • 27.09.2023 In 2023, it is planned to receive 114 billion RUB to the Russian budget from transactions involving the sale of assets in Russia by foreigners. From January 1 to September 22, 2023, the amount of receipts amounted to 73.3 billion RUB. In 2024, receipts of 2 billion RUB are expected. No receipts are planned from 2025. (RBC)
  • sale of an asset at a discount of at least 50% of the value determined in the course of an independent appraisal;
  • establishment of key performance indicators (KPI) for new shareholders (owners).”
  • 18.05.2023 The introduction of mandatory IPO requirements before the sale is being considered. “The Government Commission for Control over Foreign Investment is discussing the idea of requiring buyers to list a portion of the acquired companies’ shares on the stock exchange when granting permission for the sale of assets owned by foreign owners leaving Russia. This was announced on May 16 during the NAUFOR Russian Stock Market conference by Elvira Nabiullina, the head of the Central Bank.” (Kommersant)

Thus, before resolving on the sale of assets in the Russian Federation, it is necessary to obtain an independent assessment of the value of assets and take into account that in order to obtain the permit, the price and structure of the transaction will have to meet the specified criteria (discount, installment plan, contribution to the federal budget).

Please note that the extract from the minutes informs about the approaches and criteria that the Ministry of Finance is guided by when issuing permits, but does not establish strict procedures and requirements, therefore:
1. even full compliance with the specified criteria does not guarantee that the permit will be obtained
2. the permit may be obtained even if all four criteria are not fully met. In this case, we recommend supporting the application with convincing grounds and arguments, attaching (if possible) the relevant documents

10 Requirements from July 7, 2023

On July 14, 2023, 10 requirements were formulated for foreign investors to divest from assets in Russia (Vedomosti). Some of these requirements have been applied before, but there are also new ones, for example:

“The asset buyer must not enter into a put option agreement with the seller for a period exceeding two years. If such an agreement is signed, the former owner must pay the market price for the return of the business, including evaluating the economic benefit to the current owner.

The buyer is obliged to place up to 20% of the shares of the acquired Public Joint-Stock Company (PJSC) on organized auctions. The listing procedure must be initiated within a year after the transaction, and the stock exchange listing must be completed within three years. (As clarified by the source of ‘Vedomosti,’ this refers to SPOs of companies that have already obtained public status, with only a small portion of shares in free circulation, and this requirement will only affect new transactions). (Kommersant).”

Other requirements listed in the Vedomosti article include:

“The requirement to conduct a listing even in the case of liquidation or loss of public status by the PJSC; the necessity of obtaining an opinion from an independent private appraiser from a special list to confirm that the purchase price corresponds to the market value; the requirement of an expert opinion prepared by participants of a self-regulatory organization of appraisers; providing a discount of no less than 50% from the market value; making a payment to the budget in the amount of 10% if the transaction is carried out with a discount of less than 90% from the market value; the buyer’s compliance with KPIs for the development of the company and the preservation of the workforce; a prohibition on repatriating funds from the sale for owners from unfriendly countries, as well as the presence of all other necessary permits from Russian authorities for the transaction.”

19.07.2023 A statement with the requirements has been published on the website of the Ministry of Finance of Russia.

Preemptive right to buy shares of strategic enterprises from foreigners

July 24, 2023 Preemptive right of the Government of Russia to acquire shares of strategic enterprises (the list approved by Presidential Decree No. 1009 dated August 4, 2004) is implemented regardless of the existence of preemptive rights for other entities. The goal is to purchase these shares “at a significant discount for subsequent resale at market prices and transfer the proceeds to the federal budget” (Interfax).

Procedure for obtaining a permit to sell shares

A subcommittee of the Ministry of Finance shall issue permits for transactions falling into the categories specified in this document. The procedure for submitting applications and the list of required documents can be found in the Decree № 295 от 06.03.2022 (Clauses 4-15).

The application form has been published in accordance with the extract from the minutes of the Subcommission meeting of January 19, 2023, No. 127/3, and can be downloaded from the website of the Ministry of Finance.

16.10.2023 New application form for authorizations for transactions with non-residents

Applications can be filed one of the following ways:

  1. by email podcom@minfin.gov.ru
  2. by post 109097, Moscow, Ilyinka, 9
  3. by courier : Moscow, Ilyinka, 9, entrance 5, office 121 (entrance from Bolshoy Cherkassky pereulok)
  4. through the ministries supervising the areas in which legal entities whose shares are the subject of transactions, operate

Attempts to bypass restrictions

11.11.2022 Bank of Russia: “Residents from unfriendly countries sometimes try to appear as participants in the markets of countries that Russia considers friendly” (RBC).

16.05.2023 Bank of Russia will prevent attempts to reduce the amount of assets owned by non-residents from unfriendly countries: “Our position is very firm: we believe it is wrong to allow or encourage, incentivize (in any way) practices that allow for the reduction of the amount of assets owned by non-residents from unfriendly countries through their purchase and transfer here, and so on. And if we find any new loopholes that were not foreseen, we will continue to close them” (Kommersant).

24.05.2023 Decathlon is separately selling stores in regions: it was previously reported that the company has sold five locations in Russia in 2023. Deputy Head of the Ministry of Industry and Trade, Viktor Evtukhov, said, “I think we need to suspend this process so that the retail chain doesn’t try to bypass the mandatory conditions for selling the business. In other words, to avoid a deal that takes into account the full value of the assets. Because it’s possible to sell all the stores individually and leave the country without providing a 50% discount to its customers and without paying 10% of the total amount in taxes to the treasury” (Izvestia).

18.10.2023 The court invalidated the sale of land and real estate to Bauer Technologiya LLC due to the lack of permission from the Government Commission on Foreign Investments (Vedomosti).

How many companies have left the market and sold their businesses in Russia?

15.02.2023 In 2022, 109 deals were made on the sale of assets by foreign shareholders and owners. “The departure of foreign investors had the strongest impact on the machine building industry, the report says: 21 deals totaling $5.03 billion were made in this sector. Also notable was the exodus of foreigners in the services and construction sectors: in them, 11 deals worth $2.87 billion and 20 deals worth $2.2 billion were made in 2022, respectively. [….] “It is worth noting that not all deals on the sale of business by foreign investors are included in our statistics. This is due to the symbolic amounts for which some businesses are sold, as well as the protracted process of approving sales. Many of them cannot be finalized at all due to legal restrictions,” the AK&M report specifies” (RBC)

30.05.2023 Assessment of the situation and scale of sales from the Central Bank of Russia: “From March 2022 to March 2023, foreign investors carried out approximately 200 deals to sell their Russian assets, as reported by the Bank of Russia in its review. 20%, or 40 deals, were related to the exit of non-residents from major assets, each valued at more than $100 million. From October 2022, there were five deals with an average check above $400 million. According to Bloomberg calculations, foreign companies that left Russia sold assets worth $15-20 billion in 2022. The AK&M agency estimated the volume of such sales at $16.31 billion last year. […] (Central Bank of Russia)

In general, the Central Bank believes that non-residents’ transactions for the sale of Russian assets carry increased risks.

Firstly, the change of ownership in individual cases leads to a “complete restructuring of the business model of the acquiring company.”

This refers to situations where companies have to change supply chains if they were previously based on interaction with counterparts from unfriendly countries and dependent on foreign supplies. In order to mitigate such risks, the government subcommittee examines “various aspects of the future functioning of the business” before approving the deal. […]

“Priority is given to buyers with relevant industry experience, as well as leading businesses in related industries.” […]

Many non-residents, when divesting their assets, “leave themselves the opportunity to return,” for example, agreements provide for corresponding options. […]

The “pitiful $1.5 billion” needed for settlements with Shell “could not be bought in sufficient quantities in dollars and euros on the market, so the company was forced to buy half of the available yuan on the market, thereby triggering the current yuan liquidity crisis […]. “Buyers are advised to evenly distribute the acquisition of currency in the domestic foreign exchange market.” (RBC)

Which companies have obtained permissions to sell businesses and exit Russia?

Several examples of large companies, for which information on the permission to deal with their shares appeared in the media:

  • Volvo – sold
    19.10.2022     “Volvo is considering various options to optimize its business in Russia, including a full or partial sale” (Vedomosti)
    08.09.2023 Volvo’s assets in Russia transferred to a Russian investor (Minpromtorg).
    25.09.2023 The transaction did not include a repurchase option (Vedomosti).
  • H&M – all stores closed, the company has left Russia. The contractor is trying to recover 245.8 million rubles from H&M through court.
    18.07.2022 H&M announces plans to leave Russia (H&M Group).
    04.10.2022 H&M closed 42 out of 98 stores in Russia (TASS).
    06.12.2022 All H&M stores in Russia are closed (TASS).
    28.08.2023 Vedomosti, Kommersant: “Logisticsspetstrans LLC has filed a lawsuit with the Moscow Arbitration Court against H&M to recover 245.8 million rubles. The logistics contractor wants the money for failure to comply with the assurance on sustainable business development. Allegedly, the company, relying on this assurance, purchased 50 vehicles and organized a transport base as required by H&M’s tender, but the retailer eventually withdrew from the Russian market. … Logistikspetstrans is demanding money under part 1 of Article 431.2 of the Civil Code (unreliable assurances about circumstances relevant to the conclusion of the contract and its fulfillment).”
  • Siemens – operations suspended, receivables not recovered (13,4 mln EUR (RBC)), penalty of 6 mln. roubles per day for non-execution of one of the contracts
    02.03.2022 Siemens suspends deliveries and new projects in Russia (RBC).
    13.03.2023 Siemens Mobility filed cassation appeals (1, 2) with the Supreme Court of Russia in an attempt to overturn the prohibition to submit disputes (1, 2) under contracts with Russian Railways to the Vienna International Arbitration Court. Both disputes were resolved in favor of Russian Railways, submission to the Vienna International Arbitration Court was refused.
    22.05.2023 The Moscow Arbitration Court granted the application of Russian Railways to recover from Siemens Mobility GmbH: “To recover from Siemens Mobility GmbH in favor of Open Joint Stock Company Russian Railways <…> a penalty for non-execution of the court decision in the amount of 6.078 million rubles for each day of non-execution of the court decision [to deliver 13 “Sapsan” high-speed trains]” (TASS).
  • SHELL – approved, sold
    25.05.2022     Shell signs final documents in Lukoil asset sale deal (Interfax).
    12.04.2023 Sale of SHELL’s 27.5% stake in Sakhalin-2 project approved for $1.16 billion (Reuters).
  • Tchibo – sold
    12.08.2022 Tchibo sold Russian business to local management, new brand will appear next year (RBC).
    10.11.2023 Tchibo changes its name and umbrella brand to Tibio (Kommersant).
  • Mondi – approved, sold
    19.12.2022 The deal to sell Syktyvkar LPC for 95 bln. rubles has been blocked. “The possible reason is that the price of the deal is too high … the authorization process is still ongoing” (RBC).
    18.09.2023 Mondi has sold its last enterprise in the Russian Federation – Syktyvkar LPC for 80 billion rubles. The transaction was approved by FAS and a subcommittee of the government commission for control over foreign investments (Interfax).
    04.10.2023 Mondi has completed its exit from the Russian market ahead of schedule. “Initially, the terms of the deal suggested that Mondi would receive funds from the sale of LPC in six monthly tranches of 13.5 billion rubles each by the end of December this year … Mondi has received 57 billion rubles into its bank account in London and has a letter of credit for the remaining 23 billion rubles, which will be paid in two equal tranches in November and December 2023” (Interfax).
  • Domino’s Pizza – bankruptcy
    28.12.2022     Domino’s Pizza is considering the possibility of selling its Russian business (Interfax).
    21.08.2023 DP Eurasia, the company managing the Domino’s Pizza brand in Russia, has ceased its attempts to sell the Russian division, DP Russia, and has initiated the process of its bankruptcy (RBK).
  • Schaefflergruppe – approved
    03.01.2023     The Russian Government allowed deals with assets of Schaefflergruppe (Germany) and the controlled companies Schaeffler Russ and Schaeffler Rusland (Order No. 4401-r of December 31, 2022). TASS on the company: “The German company Schaeffler is a manufacturer of automotive components, as well as a controlling shareholder of the tire manufacturer Continental AG. In 2014, the Russian platform Schaefflergruppe – LLC Schaeffler Rus – launched serial production in the Ulyanovsk region. The enterprise produces components for Russian automakers and provides services for the restoration of bearings for railway transport and industry.”
  • VimpelCom (VEON) – approved
    01.02.2023     The government commission for monitoring foreign investment approved the terms of the deal to sell “VimpelCom” (which provides services under the “Beeline” brand and now belongs to the Dutch holding company VEON) to Russian top management (RBC).
    09.10.2023 VEON sells stake in VimpelCom to Russian management. The transaction does not imply a buyback. The amount of the transaction is RUB 130 billion. As part of the deal, VEON buys back Eurobonds for a comparable amount and issues replacement bonds with a longer maturity at the insistence of the government’s Foreign Investment Commission. (Reuters, RBC)
  • IKEA – approved
    16.02.2023     The deal to sell IKEA’s factories in Russia was approved (Izvestia).
  • Moeller-Maersk – approved
    21.02.2023     Permission was granted to carry out deals with shares in Moeller-Maersk (Vedomosti).
  • John Deere – approved, sold
    08.03.2023     Insight Investment Group has acquired the Russian leasing arm of farm equipment maker Deere & Co. The deal was approved by the government commission (Reuters).
  • Swarovski – online sales discontinued, shops closed
    09.03.2023     The CEO of Swarovski announced the company’s decision to leave the Russian market (Kommersant).
    14.06.2023 The complete withdrawal of the Austrian company Swarovski from Russia has already been completed (Kommersant).
  • Nokian Tyres – approved, sold
    28.10.2022     Nokian Tyres signs an agreement to sell its Russian operations for 400 million euros (Reuters)
    14.03.2023     Nokian Tyres sale approved.
    16.03.2023 Nokian Tyres received 285 million euros from PJSC “Tatneft”. The maximum allowable amount for the transaction was determined by the Government Commission (Nokian Tyres).
    26.03.2023 PJSC “Tatneft” became the owner of 100% of the share capital of the Nokian Tyres tire plant. (Interfax)
    30.03.2023 Nokian Tyres has completed the sale procedure of its Russian division (Nokian Tyres).
  • Inditex – approved
    05.04.2023 The sale of Inditex’s business to a UAE buyer has been approved (Reuters).
  • Heineken – sold for 1 EUR
    19.04.2023     Heineken has found a buyer for its business in Russia (Forbes). Heineken periodically comments on the situation with the sale of its assets on its website.
    31.07.2023 Heineken’s report for the first half of 2023 has been published. The company has written off its business in Russia: “On 28 March 2022, HEINEKEN announced its decision to leave Russia. A further impairment loss of €113 million (31 December 2022: €88 million) was recognised in relation to the Russia disposal group classified as held for sale, bringing the net carrying value to nil as of 30 June 2023. Determining the fair value less cost of disposal as of 30 June 2023 involved judgement and consideration of the increasing uncertainties around the Russia disposal group.”
    25.08.2023 Heineken has completed selling businesses and facilities in Russia: «The transaction has received all the required approvals and concludes the process HEINEKEN initiated in March 2022 to exit Russia, incurring an expected total cumulative loss of €300m.» Conditions and consequences:

    • “As a result of exiting Russia, HEINEKEN expects total non-cash exceptional losses amounting to €300m including cumulative foreign exchange losses relating to Russia currently recorded in equity. This includes a commitment from Arnest Group to repay the historical intercompany debt of the Russian business of approximately €100m due to HEINEKEN in instalments.
    • The purchase price for the HEINEKEN Russia business is €1 for 100% of the shares.
    • All remaining assets including 7 breweries in Russia will transfer to the new owners.
    • Arnest Group has taken responsibility for the 1,800 HEINEKEN employees in Russia, providing employment guarantees for the next three years.
    • In addition to the Heineken® brand which was removed from Russia in 2022, production of Amstel will be phased out within 6 months.
    • No other international brands will be licensed in Russia with the exception of a 3-year licence for some smaller regional brands which are required to ensure business continuity and secure transaction approval. HEINEKEN will provide no brand support and will receive no proceeds, royalties or fees from Russia.
    • There is no call option to return to Russia. ”(HEINEKEN).
  • Henkel – approved, sold
    20.04.2023     Sale of Henkel has been approved (Henkel).
    04.05.2023 Exit from business activities in Russia completed (Henkel)
    03.06.2023 CEO of Henkel admits the possibility of buying back the company’s business in Russia within the next 10 years, but it would require ” framework conditions and relations with Russia would have to change fundamentally” (Reuters).
  • Volkswagen – approved, sold
    20.04.2023     Volkswagen factory sale has been approved (Vedomosti).
    27.07.2023 The transaction amount was 125 million euros (Forbes).
    22.05.2023 On the deal on the purchase of Russian assets of VW concern by Avilon, there was a limit on the purchase of foreign currency – no more than 50 million euros per day (Interfax)
  • Fortum and Uniper – government control, companies are exploring options for taking legal actions
    26.04.2023     Russian assets of Fortum and Uniper are transferred under the management of Rosimushchestvo from the moment of signing the respective presidential decree on April 25 (Interfax).
    05.05.2023 Fortum formally notified the administration of the President of Russia about its objections regarding the decree (Fortum).
    11.05.2023 Fortum fully wrote off Russian assets amounting to €1.7 billion (Fortum).
    13.07.2023 Fortum announced its intention to seek compensation for the value of its shares in PJSC “Fortum” and its investments in Russia through arbitration proceedings (Fortum).
    25.08.2023 “Russian government is unwilling to allow certain companies, including Uniper, to dispose of its investments in Russia … Uniper is examining all options to take legal action against these actions by Russia … The company said it expected a decision in its arbitration proceedings against Russia’s Gazprom Export next year.” (Reuters).
  • Continental – approved, sold
    28.04.2023 Sale of Continental has been approved (Kommersant).
    23.05.2023 Continental completes the sale of the plant in Kaluga and awaits approval for the sale of its stake in the joint venture in Chistopol (Continental).
  • Michelin – approved
    26.05.2023     The sale of Michelin’s subsidiaries in Russia was approved (Michelin).
  • Essity – pending approval
    10.06.2023     Essity has signed an agreement with a buyer for the sale of its business in Russia and is awaiting approval from the Government Commission. It is expected that the transaction will be completed in the second quarter of 2023 (Essity).
  • Magnit and LUKOIL (MOEX:MGNT, MOEX:LKOH) – offered foreign shareholders to exit via buyback with a discount of ~50% of the price the stock is traded at
    16.06.2023     Magnit has put forward an offer to non-resident investors for the repurchase of up to 10% of its shares. “As part of the approval process, the buyer has made all reasonable efforts to ensure the optimal outcome for both non-resident shareholders and resident shareholders under non-resident control who wish to exit their investments in ‘Magnit'” (Kommersant).
    22.08.2023 In July, LUKOIL asked the President for permission to buy back up to 25% of its shares from non-residents at a discount of at least 50% to the current stock price (Kommersant).
  • Bosch – negotiations, partially sold to S8 Capital
    20.06.2023     Hisense and Midea intend to buy Russian factories of Bosch. “Hisense has provided the German company with a favorable option for the repurchase of assets if it decides to return to the Russian market, and the deal has been agreed upon. At the same time, Bosch itself states that negotiations have not yet been concluded” (Kommersant).
    28.04.2023 Bosch has sold production facilities and administration at one of its sites in Russia to holding company S8 Capital, which plans to rebrand within six months (Reuters).
  • Carlsberg Group & Danone – government control
    23.06.2023     “Carlsberg Group announced the completion of this process and the signing of an agreement with the future owner of the assets. The transaction is subject to approval by the regulatory authorities of the Russian Federation” (Baltika, Carlsberg Group).
    16.07.2023 Presidential Decree was published. Temporary government control has been imposed on foreign stakes in Danone and Carlsberg Group.
    30.07.2023 Reasons for introducing temporary management: “the management of these companies tried to exert pressure on Russian citizens, their employees, intimidating them with possible dismissals in case they demonstrate a certain civil position” […] “There are currently no plans to transfer the assets of unfriendly non-residents into state management, following Baltika (owned by Carlsberg Corporation) and Danone Russia (Danone), these cases were special, the Russian president said” (Interfax).
    18.08.2023 The legal entity AO “Danone Russia” will be renamed to AO “H and N” (RIA).
    03.10.2023 Carlsberg Group terminates license agreements in Russia and fully impairs the value of its business in Russia.
    08.11.2023 “Carlsberg accuses Russia of violating international treaties and threatens legal consequences. […] Carlsberg has sent a letter to the Russian management in which it categorized the actions of the Russian Federation as violations of obligations under the bilateral investment agreement and public international law, and also asked to “immediately inform whether or not the Russian Federation intends to pay compensation for losses and damages incurred by the company”. Including due to the inability to obtain the necessary authorizations and close the already prepared deal for the sale of Baltika.” […] A price of over 71 billion RUB was set for Baltika, taking into account the mandatory 50% discount for exit deals. At the end of August, the framework agreement with Arnest’s structures was terminated due to the introduction of a temporary management regime at Baltika by Rosimushchestvo.” (Interfax)
    13.03.2024 The transfer of Danone to external management by Rosimuschestvo has been canceled. “Lawyers attribute the measure to the coordination of a deal to sell the business to a suitable buyer, as well as to the desire to avoid a lawsuit from the company in international investment arbitration.”” (Decree, Kommersant).
  • Bionorica – plans to sell an asset, stays in Russia
    10.08.2023     Bionorica plans to sell an unfinished plant in Voronezh due to the inability to launch the project because of sanctions. The company does not intend to leave the Russian market, but nevertheless, it will have to provide a discount of at least 50% when selling this asset (Vedomosti).
  • Valeo – pending approval
    18.08.2023     Valeo signed an agreement to sell its business in Russia. The deal is subject to approval by the Government of the Russian Federation. The terms of the deal include an option for a buyback within 10 years, starting from the 6th year after the transaction.
  • Johnson Matthey – approved, sold
    18.08.2023     Johnson Matthey exited its business in Russia in June. The new owners are Russian top management (Kommersant).
  • Nestle – the increase in prices for baby food has attracted the attention of the Ministry of Agriculture of the Russian Federation. The company’s shareholders are representatives of an unfriendly country, “the risk of unfriendly actions” on the part of the company «cannot be excluded».
    23.08.2023     «The Russian Ministry of Agriculture believes that the risk of unfriendly actions cannot be ruled out in the increase of selling prices for baby food of the Swiss concern Nestle in Russia, as the company’s shareholders are representatives of an unfriendly country» (PRIME).
  • Raiffeisen Life – pending approval
    24.08.2023     Uniqa and Raiffeisenbank to sell Raiffeisen Life. The buyer is Renaissance Life (Reuters).
  • Fraport AG’s stake in VVSS (25%) – allegedly planned sale
    12.09.2023 Fraport AG’s stake in the operator of Pulkovo Airport may be sold by the end of 2023 (Kommersant).
  • International Paper’s 50% share in JV with ILIM – approved, sold
    18.09.2023     International paper sold a 50% stake in Ilim for $484 million. The total value of the joint venture was estimated at $3.5 billion. The deal has been approved by a government commission. (RBC, Kommersant, Ilim).
  • Hyundai – approved
    25.09.2023     Hyundai will sell the plant in the Leningrad region. The deal provides for a buy-back option limited to 2 years (TASS).
  • EvoBus (Daimler) – liquidated
    26.09.2023 OOO EvoBus Russland was registered in Moscow in 1999. The company, which also had a branch in the Moscow region, represented Mercedes-Benz and Setra brands on the local market, was engaged in supply of spare parts and service. Revenue of EvoBus’ Russian subsidiary fell to 354 million rubles in 2022 from 661 million rubles a year earlier. The company also reported a RUB 187 million loss versus a profit the year before.” According to the Unified State Register of Legal Entities, operations have been discontinued since September 25 (Interfax).
  • Intesa Sanpaolo – approved
    29.09.2023     Intesa Sanpaolo has received approval to sell its business in Russia (Decree, Reuters, RBC).
  • Ingka Centres (Mega shopping center chain) – sold
    28.09.2023 Mega shopping center chain is bought by Gazprombank Group. “Earlier, Kommersant sources estimated the value of the shopping center at $2.85 billion, excluding the 50% discount required for the government commission to approve the deal, and noted that the sale of assets may include a buy-back option.” (Interfax)
  • Xerox – sold
    11.10.2023 Xerox sells business in Russia to Russian top management (Xerox).
  • Xella Group (plant Istkult Mozhaisk) – sold
    16.10.2023     German building materials manufacturer Xella Group has sold the plant – producer of autoclaved concrete “Istkult Mozhaisk” to the holding company “AlfiGroup”. (TASS)
  • Fujitsu – liquidation
    16.10.2023 Fujitsu Technology Solutions Ltd will be dissolved in August 2024. (RBC)
  • Sulzer (OOO Sulzer Turbo Services Rus) – sold
    16.10.2023     Sulzer sold its Russian business to UAE-based investment bank Gardiner Resources (Interfax).
  • Moscow Exchange – EBRD sells stake (5.3%) to Softline Group
    22.10.2023 “The European Bank for Reconstruction and Development (EBRD), which last year announced its desire to completely withdraw from its Russian assets, has found a buyer for its stake (5.3%) in the capital of the Moscow Exchange. As Forbes found out, the authorities have approved the sale of the asset to the IT group Softline with the terms of a 60% discount to the stock exchange price of the shares and payment of the EBRD “exit tax” in the amount of 20% of the transaction value” (Forbes).
  • Bonava – approved
    20.10.2023 Swedish housing developer Bonava announced the sale of its business in Russia for EUR 50m to Star Development LLC (a subsidiary of FSK Group). The deal has been approved by a government commission. This is the third attempt by the Swedish company to leave Russia, the two previous attempts did not receive government approval (Kommersant).
  • Kone, Otis – sold to S8 Capital
    24.10.2023 “Finnish elevator manufacturer Kone, which was planning to transfer its Russian division to local management, has found a third-party buyer. This business is estimated for 0.5-1 billion rubles and has been acquired by the Russian company S8 Capital. … In July 2022, S8 Capital bought the business of Otis, an American elevator and escalator manufacturer leaving Russia, renaming it Meteor Elevator. From January 2023, the company bought out from the American Otis began producing elevators under the Meteor Elevator brand. 300 specialists working in “Lift Connect” will keep their jobs, moving to “Meteor elevator”. Kone equipment will also be serviced under this brand. Its service portfolio includes 7,000 pieces of equipment, including high-speed elevators in six regions. The company’s revenue for 2022 amounted to 4.2 billion RUB.” (Kommersant).
  • Bridgestone – approved, sold
    20.12.2023     Bridgestone sold its plant in Ulyanovsk and its distributor in Russia to S8 Capital investment group. The transaction received all necessary regulatory approvals (Interfax, Kommersant).

How long does it take to get approval?

28.03.2023 Currently, about 2,000 foreign companies are awaiting approval of applications to sell assets in Russia. “The commission meets three times a month and considers no more than seven applications at one session” (Kommersant, Financial Times)

Restrictions on purchasing foreign currency for approved transactions

21.04.2022 A limit on currency purchases was introduced for the Yandex deal with Uber – a daily limit of $150 million (Interfax).

27.04.2023 Ministry of Finance of the Russian Federation is considering introducing a limit on the purchase of foreign currency in the domestic Russian market. “The practice of regulating currency exchange operations within a particular deal has already existed since last year, but until now it has only applied to individual transactions (for example, a petition was granted with the condition that the acquisition of currency on the domestic market not exceed $150 million per day)” (Interfax). 28.04.2023 The Central Bank of Russia supports the introduction of the limit (Interfax).

22.05.2023 The list of the President’s instructions based on the results of the meeting of April 11 has been published. The government together with the Central Bank of Russia should by June 1 “ensure the establishment of a monthly limit of no more than $1 billion for the purchase of foreign currency by residents in the domestic foreign exchange market of the Russian Federation for the purpose of subsequent transfer of foreign currency to accounts opened in banks located outside the territory of the Russian Federation for the settlement of transactions that are made on the basis of permits of the government commission on control over foreign investment in the Russian Federation, the Bank of Russia and (or) the Ministry of Finance of Russia”. The Resolution admits that exceptions may be made to this rule.

Deputy Finance Minister Alexei Moiseyev: “The limit will be unified. The point is to ensure that there is no influence on the currency market. That is, it means that, conditionally speaking, the commission has allowed to sell business for such an amount, but it is possible to buy currency within a certain period of time, so that the limit will not be violated” (Interfax).

Sale of real estate by financial organizations

The Government Commission for Control of Foreign Investments in the Russian Federation decided to allow residents that are credit institutions and non-credit financial institutions, subject to the transfer of funds for these transactions (operations) in full to a bank account opened with a Russian credit institution (correspondent account) (including in cases where the said transactions (operations) are made (executed) on behalf of credit institutions and non-credit financial institutions by third parties), to perform (execute) transactions (operations) for the disposal of real estate:

  • to foreign legal entities associated with unfriendly states;
  • to legal entities that are under the control of foreign entities associated with unfriendly states, regardless of the place of their registration or the place of their primary business activities.

The permit shall be valid without a time limit.

Extract from the protocol No. 85 of the meeting of the subcommittee of the Government Commission for Control of Foreign Investments in the Russian Federation dated September 07, 2022 (brought to the attention by the Ministry of Finance of Russia on September 13, 2022, No. 05-06-10/ВН-46769).

Our services

Our specialists are ready to provide services for the preparation of assets for sale:

  • Conduct an independent valuation of assets
  • Calculate the required KPI for new shareholders (owners)
  • Help prepare the necessary set of documents
  • Submit an application for a permit to the Ministry of Finance of the Russian Federation
  • Provide legal and advisory services on all additional issues related to obtaining permits

Contact us for advice on the best course of action for your situation.

Get legal support on selling shares and paying dividends
Corporate finance Corporate governance Financial risks JSC Legal Issues Legal services LLC LLP Sanctions