New policy in regard to foreign directors and owners of Russian companies

Russia has imposed new barriers to foreign directed investment.

It used to be possible to appoint a foreign legal entity – e.g. a management company - as the Russian company’s General Director, however in practice that possibility has vanished. A newly appointed foreign director is required to a be a natural person, who will be subjected to the same civil and penal measures as his or her Russian counterpart; the protection of a foreign legal entity in between has thereby disappeared. Additional barrier is the mandatory application and obtainment of a Russian work permit for each foreign (individual) director.

An OOO – Limited Liability Company or LLC – can still have foreign shareholders; an additional condition to shareholding applies, when the LLC has only one (foreign) legal entity as shareholder. In such case the (foreign) shareholder itself needs to have at least two shareholders.

Van Velzen CS facilitates the set-up of an entity in Russia and offers a solution to lease such space in a cost-efficient way.

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