Foreign Investors’ Rights to Acquire Shares in Russian Companies

Russia grants foreign investors national treatment under the Federal Law on Foreign Investments (No. 160-FZ), allowing participation in Limited Liability Companies (LLCs) and Joint-Stock Companies (JSCs) on equal footing with Russian nationals. This ensures access to ownership, profit distribution, and corporate governance, subject to sector-specific rules.

Strategic sectors, including defense, media, financial services, and natural resources, are governed by Federal Law No. 57-FZ. Foreign investors must secure government approval to acquire 25% or more of a company’s shares in these industries.

Investors from the UAE, as well as other friendly countries in the Middle East and Africa are not subject to Russia’s “unfriendly states” restrictions. Their investments follow the standard foreign investment regime, offering access to non-restricted sectors without additional geopolitical hurdles.

Share Transactions

LLCs (Limited Liability Companies)

• Share transfers require a notarized Share Transfer Agreement and registration with the Federal Tax Service (FTS).
• Company charters may impose preemptive rights or require shareholder consent.
• If a shareholder disputes a transfer or refusal, the matter can be resolved according to the charter or, if necessary, through the courts.

Non-public JSCs (Joint-Stock Companies)

• Share transfers are subject to charter-based restrictions and preemptive rights of existing shareholders.
• Violations of these rights or the charter can be contested in court.

Public JSCs

• Shares are freely tradable on the stock market.
• Court challenges generally only arise in exceptional cases, such as fraud or legal violations.

Investment Climate

Despite ongoing geopolitical developments, Russia continues to welcome foreign participation in non-restricted sectors. Investors from the UAE, Middle East, and Africa benefit from regulated procedures, legal safeguards, and transparent investment opportunities, reflecting Russia’s continued openness toward friendly states.

Conclusion

Foreign investors can acquire shares in Russian LLCs and JSCs under national treatment, with government approval required only for strategic sectors and holdings of 25% or more. Investors from friendly countries can operate without additional restrictions in non-restricted sectors. Our team can help you manage these rules and ensure smooth, compliant share acquisitions. Get in touch with us for expert guidance.