On 22 January 2024, the rules for granting permissions by the Governmental Commission for Control of Foreign Investments in Russia (Commission) for transactions / operations involving shares of Russian companies owned by foreign persons from “unfriendly states” were adjusted (Resolution of the Government of Russia No. 40 dated 22 January 2024).
The application for permission to conduct the transaction / operation must now include:
- A report on an independent appraisal of the market value of the shares,
- Key performance indicators and their target values for the purchasers of the shares, as proposed by the applicant as a condition for the transaction / operation.
This provision does not apply to transactions / operations between persons belonging to the same group of persons under antimonopoly law, or between foreign persons from the “unfriendly states”. Exclusion from the requirement of an independent appraisal report means, among other things, that such persons are not required to pay an “exit tax” to the Russian budget.
However, the exemption is unlikely to apply to Management buy-out (MBO) transactions, even though formally the management of the company and the foreign company – the current owner of the share – are considered part of the same group of persons under Russian law.