A law to exclude foreigners from the chain of ownership of large companies has been accepted by the authorities.

As a result of the adoption of the "anti-sanctions law" on 20 July, the State Duma established the possibility for Russian beneficiaries to control significant companies with a foreign ownership structure.

Under the law, Russian courts will decide to exclude foreigners from the chain of ownership, which is known as a "restrictive exemption". Note that these changes do not violate the rights and legitimate interests of shareholders from other countries. The measures have only one goal - to solve problems with business management. In addition, it should also facilitate the payment of dividends.

The mechanism will apply only to so-called economically important organisations (EIOs) in which foreign structures from unfriendly jurisdictions or owners from such countries own at least 50% of the shares.

Who will be affected?

The Law defines the concept and criteria of EIO, according to which the government will approve the list of significant companies. Companies to be included in the list must fulfil three criteria.

The first criterion suggests that the company should be large in financial terms. This means that it must have revenues of more than RUB 75bn, taking into account legal entities belonging to the same group, total assets of at least RUB 150bn, pay taxes of at least RUB 10bn and have more than 4,000 employees.

The second criterion is the importance of the industry. For example, the company must be a systemically important bank (Tinkoff, Raiffeisenbank, Unicredit Bank, etc.), be recognised as a critical information infrastructure entity or a city-forming enterprise by 01.02.2022, implement technologies and software for publicly important services and services, and participate in the creation and modernisation of high-performance and high-paying jobs.

Third criterion.The share of Russian owners directly or indirectly participating in a foreign holding must exceed 50%. If, at the last meeting of the holding's management bodies, the Russian owners were able to make decisions, the share may be more than 30 per cent. If blocking sanctions have been imposed against the shareholders of the holding or the special regime economic zone itself, the share may be more than 20 per cent. This law was adopted by the State Duma and sent to the Federation Council for consideration.