Permission from the government commission

The permission of the Government Commission to conduct transactions in the purchase and sale of shares in the authorized capital of an LLC, the purchase or sale of shares in a joint stock company or other transactions affecting the activities of such organizations is regulated by a special procedure established by presidential decrees. Permission must be obtained if one of the parties to the transaction is a person from an unfriendly country.

These decrees approved all transactions for which the permission of the control commission is required, permits are applied if the management structure of shares and shares of companies changes (not applicable to credit and non-credit financial organizations), as well as in real estate transactions, transfer of payments for intellectual property and with objects for which permission was previously issued, conducted between:

• Persons of foreign states who commit unfriendly acts.
• Persons of foreign States engaged in hostile acts and foreign persons who are not citizens or legal entities of foreign States engaged in hostile acts.

The list of countries was approved by the Government of the Russian Federation. It includes large States and territories, including:

• United Kingdom
• Member States of the European Union
• Canada
• United States of America
• Japan, etc.

However, there are exceptions to this rule. In some cases, you do not need to get permission from the Commission. Exceptions include:

• Transactions with equity interests in financial companies and non-financial credit institutions
• Organizations in the field of fuel and energy sector (if their final beneficiaries are the Russian Federation, Russian legal entities or individuals, transactions entailing the emergence of ownership rights to securities alienated by individuals who are foreign persons)
• When conducting transactions with foreigners from unfriendly countries under the jurisdiction of Russia
• When making a transaction between resident individuals on a gratuitous basis (both parties are spouses or relatives)
• Transactions with securities with a price equal to 1 ruble (both parties must be spouses or relatives)

To obtain permission, the Commission is provided with documents from the specified list, to which it is necessary to attach an application with a full justification of the reasons for the purchase or sale of shares or shares. The request is sent to the Ministry of Finance of the Russian Federation through relevant organizations or directly. The package of documents must contain:

• request for permission to carry out a transaction (operation);
• the identity document of the applicant (individual);
• constituent documents of the applicant (legal entity);
• a document with information about the beneficiaries;
• the resident’s balance sheet and information on the book value of assets as of the last reporting date.
• all information about the transaction
• objectives of the transaction
• terms of the transaction
• information about persons controlling a person from an unfriendly country
• an inventory of the submitted documents

Based on the results, the commission may issue a permit or refuse to issue it. The reason for the refusal may be a lack of documents or an error in filling out some forms. The deadline for reviewing documents for obtaining permission by the Government Commission is not precisely defined. The process takes a long time, given the variety of transactions that require permission, but the minimum waiting time will be 2 months.