News

The Russian authorities plan to simplify the procedure for approving foreign investments in strategic companies for entrepreneurs holding dual citizenship or residence permits in another country who are subject to sanctions by Western countries. Amendments to this effect have been prepared by the Ministry of Economic Development, RBC reports. The bill has been posted on the regulation.gov.ru portal for public discussion.  

Since 2017, under Law No. 57-FZ on the Procedure for Foreign Investment in Businesses of Strategic Importance for the Defence and Security of the State, Russian nationals having dual citizenship have been treated as foreign investors. In 2023, the category was expanded to include Russian nationals who have obtained a residence permit or other document entitling them to reside permanently in a foreign country. Transactions by foreign investors to establish control over Russian strategic enterprises generally require the approval of the government commission for oversight over foreign investments. Such approval can take a long time. 

The Economic Development Ministry's initiative aims to include Russian citizens having dual nationality and Russian tax resident status as being among those eligible for an expedited procedure if sanctions have been imposed against them. The Federal Antimonopoly Service (FAS) will make a decision using a simplified procedure to preapprove a transaction or to grant approval of the establishment of control based on its consideration of the application after conducting an audit, unless there are any objections to the transaction from the Defence Ministry and the FSB. 

The amendments are intended to assist Russian businesspeople who own assets in Russia through companies registered in a foreign jurisdiction, Pavel Smelov, CEO of the Centre for Strategic Research, explained to RBC. In fact, this is not investment, but in a broad sense, redomiciliation, he said.