Business & Legal Digest – July 2026

1. The Cabinet of Ministers supported mandatory tax monitoring for SEZ residents.

The government has approved a bill requiring large and medium-sized companies—residents of special economic zones (SEZs)—to switch to tax monitoring. This must be done within two years of signing an agreement to operate in the SEZ. The proposed exception applies only to small and medium-sized businesses.

Today, participation in tax monitoring remains voluntary for most companies. This regime involves continuous exchange of information with the Federal Tax Service: the organization provides the tax authority with remote access to accounting and tax data, in exchange for a waiver of traditional desk and on-site audits for the periods covered. Instead of post-transaction audits, tax issues are resolved virtually in real time.

The bill’s initiators believe that this approach is particularly justified for SEZ residents, as they enjoy a significant amount of government support:

• tax incentives;
• reduced tax rates;
• customs preferences;
• other measures of state support for investment projects.

Constant tax monitoring will allow:

• promptly monitor the correct application of benefits;
• identify tax risks and violations in a timely manner;
• reduce the number of tax disputes;
• make interactions between businesses and the Federal Tax Service more transparent.

The government also proposed revising the bill. Specifically, it is necessary to:

• determine the liability of companies that fail to connect to tax monitoring within the established timeframe;
• clearly define the circle of organizations to which the new obligation will apply.

According to preliminary information, one of the possible sanctions could be the termination of the agreement on activities in the SEZ, which would effectively mean the loss of resident status.

According to experts, this initiative continues the government’s commitment to digitalizing tax control. A similar obligation already applies to participants in investment protection and incentive agreements, so companies receiving government incentives are gradually transitioning to ongoing interaction with tax authorities.

However, experts point out that the transition to tax monitoring will require significant preparation. Companies must:

• modernize information systems;
• ensure secure data exchange with the Federal Tax Service;
• to build internal tax control procedures;
• prepare employees to work in a new format.

Therefore, for some SEZ residents, compliance with the new requirements may entail significant organizational and financial costs.

2. Hosting providers are asking to maintain a separate procedure for identifying foreign clients.

Russian hosting providers have proposed maintaining separate identification methods for foreign clients when concluding hosting service contracts.

The reason for this was a discussion of new user identification rules. Currently, legislation allows for six different methods of identity verification, including:

• bank payment;
• enhanced qualified electronic signature (EQES);
• passport or other identity document;
• Unified Identification and Authentication System (UIAS);
• other methods provided by law.

The Ministry proposes to reduce this list to three options:

• authorization via ESIA;
• use of the Unified Biometric System (UBS);
• a personal visit to the provider’s office with presentation of an identity document.

Industry representatives believe this approach will virtually eliminate the possibility of foreign companies working with Russian hosting providers. To register a legal entity in the Unified Identification and Authentication System (ESIA), a foreign organization would need to open a representative office in Russia, which is economically impractical for most foreign clients.

As a compromise, market participants propose:

• maintain the ability to identify a bank payment when the payer’s details match the client’s data;
• leave some of the current identification methods provided by law for foreign legal entities.

According to market participants, the share of foreign clients ranges from 5 to 15%, depending on the provider. These are primarily companies from friendly countries operating in the Russian market.

Businesses also warn that overly stringent requirements could lead to negative consequences, in particular:

• the transition of some clients to foreign hosting providers who are not required to comply with Russian requirements;
• reduction in the number of foreign users of Russian services;
• the risk of losing access to websites and domain names of foreign owners if they fail to pass the new identification procedure;
• an increase in the workload and costs of Russian hosting providers, which could ultimately impact the cost of services for all clients.

Industry representatives believe the proposed changes should simultaneously ensure security and user control, without creating unreasonable barriers for foreign clients or reducing the competitiveness of Russian hosting providers.

3. The return of foreign investors may only be possible after approval by the government commission.

After 2022, many foreign owners sold their Russian businesses with the condition of a subsequent asset buyback. The new bill provides a mechanism allowing Russian owners to waive such obligations if there are legally established grounds.

It is proposed that the termination of a foreign investor’s right to repurchase be resolved exclusively through court proceedings. Furthermore, such an appeal to the court would only be possible after receiving a conclusion from the Government Commission for the Control of Foreign Investments.

The amendments apply to:

• on foreign investors associated with unfriendly states;
• on foreign companies controlled by them;
• on Russian legal entities controlled by such investors;
• for asset sales transactions completed after February 2022.

When considering a dispute, the court will be able to take into account a combination of circumstances, including:

• public statements by a foreign investor regarding the termination or suspension of activities in Russia;
• support for unfriendly actions against the Russian Federation;
• improper performance of obligations related to ownership of a Russian business;
• economic consequences of an investor’s withdrawal from the Russian market;
• conditions of the buyback, including a significant deviation of the price from the market value;
• the amount of investment that the Russian owner made in the development of the enterprise after the acquisition.

Thus, the court will evaluate not only the existence of a buyback option, but also the behavior of the foreign investor after leaving the Russian market, as well as the impact of the transaction on the company’s activities.

Even if the right to repurchase is terminated, the foreign investor is not deprived of the right to demand compensation. However, the court has the right to:

• reduce the amount of compensation taking into account the circumstances of the case;
• refuse to pay it entirely if there are grounds for doing so provided by law.

If the bill is passed, it will establish a new mechanism to protect Russian owners who, following the departure of foreign investors, have invested heavily in preserving and developing the acquired assets. At the same time, the return of foreign investors under the previous conditions will only be possible if public interests are taken into account and under state control.

4. Limiting the right of foreign investors to buy back assets

The State Duma is preparing a bill for a second reading that will determine the procedure for returning foreign investors to Russian companies if, upon exiting the business after 2022, they retained the right to repurchase their shares or stocks.

These are cases where a foreign owner sold a Russian business with the understanding that they could repurchase it at a later date under previously agreed-upon terms. These kinds of deals were concluded en masse after foreign companies left the Russian market.

The amendments propose establishing a mechanism by which the Russian party can refuse to fulfill such an obligation, but only through the courts and after receiving a conclusion from the Government Commission for the Control of Foreign Investments. The current owner will not be able to voluntarily ignore the terms of the agreement.

The bill provides that the court will be able to terminate a foreign investor’s right to a buyback only if a combination of conditions established by law is met.

First, there must be circumstances related to the foreign investor’s conduct after February 2022. These include, in particular:

• public statement of termination or suspension of activities in Russia;
• support for restrictive measures against the Russian Federation, Russian organizations or citizens;
• improper performance of obligations related to ownership of a Russian business;
• other circumstances expressly provided for by the bill.

Secondly, there must be economic grounds, for example:

• the agreement provides for a buyback at a price significantly different from the market price;
• After acquiring the business, the Russian owner made significant investments in its development;
• Without investments from the new owner, the company’s operations could have been significantly reduced or terminated.

If the court rules to terminate the right of repurchase, the foreign investor will retain the right to seek compensation. The court will also be able to:

• determine the amount of compensation taking into account the circumstances of a particular case;
• reduce the amount of the payment if there are grounds for doing so provided by law;
• completely refuse compensation in cases expressly established by law.

For Russian businesses, the bill signifies the emergence of a more transparent mechanism for resolving disputes related to the execution of repurchase agreements. While the possibility of refusing to exercise such options previously remained largely uncertain and dependent on judicial practice, the proposal now establishes a uniform procedure for reviewing such claims.

However, the bill does not automatically terminate a foreign investor’s right to asset recovery. In each specific case, the court will make a decision, taking into account:

• conclusions of the Government Commission for Control over the Implementation of Foreign Investments;
• positions of the relevant federal executive body;
• factual circumstances of the transaction;
• the behavior of a foreign investor and the economic consequences of its withdrawal from the Russian market.

This approach should ensure a balance between protecting the interests of Russian owners who retained and developed their businesses after the departure of foreign investors, and upholding the principle of judicial review of each individual dispute.