Dividend Payments to Foreign Shareholders and Participants of Russian Companies under Sanctions and Counter-sanctions

 

February 8, 2026 BRACE© Law Firm

Due to the intensified political situation since 2022, numerous restrictive measures have been applied against Russia, as well as against several Russian citizens and legal entities. In response to these sanctions, Russia introduced counter-sanctions, including restrictions on dividend payments to non-residents representing unfriendly states. This article examines the specifics of paying dividends to foreign participants and shareholders of Russian companies from both friendly and unfriendly countries.

What Constitutes Dividends of Foreign Participants (Shareholders) of Russian Companies?

Russian tax and civil law interpret the term "dividends" differently.

In tax law, dividends mean any income an entity's shareholder (participant) receives during the distribution of profit remaining after taxation (including interest on preferred shares) based on the shares (interests) owned by the shareholder (participant) in proportion to their share in the charter (pooled) capital of that organization (Article 43 of the Tax Code of the Russian Federation (the "Tax Code")).

In civil law, the term "dividends" is used only in Federal Law No. 208-FZ dated December 26, 1995, On Joint-Stock Companies (the "JSC Law"). Federal Law No. 14-FZ dated February 8, 1998, On Limited Liability Companies (the "LLC Law") uses the concept of "distribution of company profit". However, in essence, profit distribution also constitutes dividends and is referred to as such in practice.

Based on the provisions of the LLC Law and the JSC Law, civil law understands dividends as the portion of the company's profit remaining after taxation (the company's net profit) that shareholders (participants) are entitled to receive based on a resolution adopted by the general meeting or, if the company has a sole participant (shareholder), based on their decision.

Differences in the understanding of dividends in tax and civil law affect the taxation of amounts received by shareholders (participants) from owning shares (interests). In some cases, amounts recognized as dividends in civil law are not dividends for tax purposes. Conversely, certain amounts not recognized as dividends in civil law are treated as such for taxation.

Tax law recognizes several payments as dividends that are not dividends under civil law, specifically:

• Payments to a shareholder (participant) during an organization's liquidation in an amount exceeding their contribution to the charter (pooled) capital (Article 43 of the Tax Code);
• Income of a shareholder (participant) in the form of property (property rights) received upon withdrawal from an organization or during the distribution of property of a liquidated organization in an amount exceeding the paid-up value (regardless of the form of payment) of shares (interests, units) and the amount of their cash contribution to the organization's property, reduced by the funds specified in Article 251 of the Tax Code (Article 250 of the Tax Code);
• Income in the form of cash or the value of property (property rights) received by a shareholder (participant) of a Russian organization upon withdrawal (exit) or liquidation. These are recognized as dividends to the extent they exceed the shareholder's (participant's) expenses for acquiring the shares, interests, or units of the liquidated organization (Article 208 of the Tax Code);
• Income in the form of excess cash or the value of property (property rights) received by a shareholder (participant) of a foreign organization upon withdrawal (exit) or liquidation. These are recognized as dividends to the extent they exceed the shareholder's (participant's) expenses for acquiring the shares, interests, or units of the liquidated organization (Article 208 of the Tax Code);
• Excessive interest paid by a Russian organization on controlled debt to a foreign organization (Article 269 of the Tax Code);
• Income paid by a foreign organization to a Russian organization that is its shareholder (participant) during the distribution of profit remaining after taxation (Article 250 of the Tax Code);
• Any income received from sources outside the Russian Federation that is classified as dividends under the laws of foreign states (Article 43 of the Tax Code).

Interim dividends (based on quarterly, semi-annual, or nine-month results) are recognized as such for tax purposes even if a loss is incurred by the end of the year or if the amount of such dividends exceeds the net profit earned for the year.[1]

Conditions for Dividend Payments to a Foreign Participant (Shareholder) of a Russian Company

A joint-stock company (the "JSC") may resolve to distribute net profit (pay dividends) quarterly, every six months (nine months), or annually, provided the following conditions are met (Articles 42 and 43 of the JSC Law):

• The charter capital is fully paid up;
• There are no obligations to repurchase shares under Article 76 of the JSC Law;
• On the date the resolution is adopted, there are no signs of insolvency (bankruptcy), and such signs will not appear as a result of the resolution;
• On the date the resolution is adopted, the value of net assets equals or exceeds the charter capital and reserve fund and will not fall below them as a result of the resolution. If the JSC has preferred shares, one must also account for the excess of the liquidation value of the outstanding preferred shares (as defined by the charter) over their par value.

The general meeting of shareholders generally sets the dividend amount and the record date for determining the persons entitled to receive them, based solely on the recommendation of the board of directors (if such a body is formed).

The general meeting of shareholders must determine:

• A dividend amount no greater than that recommended by the board of directors. If the board of directors recommends not paying dividends, the general meeting is not entitled to declare them;
• The record date for determining persons entitled to receive dividends as proposed by the board of directors. The board of directors selects a date between 10 and 20 days after the date of the resolution to pay (declare) dividends.

The sequence of declaring dividends must be followed if the JSC has several categories (types) of shares. Specifically, resolutions are first adopted to pay dividends on all preferred shares, including accumulated dividends on cumulative preferred shares, and only then on ordinary shares (Article 43 of the JSC Law).

Please note that temporary rules have been established to protect the rights of owners of preferred shares whose dividend amount is specified in the JSC charter, namely:

• JSC resolutions to pay dividends to ordinary shareholders adopted in violation of the rights of preferred shareholders and not actually performed must not be executed;
• If, starting from September 26, 2025, such a resolution is executed despite the prohibition, preferred shareholders may recover unjust enrichment from the JSC in an amount equal to the dividends not paid for the period for which the resolution was adopted and actually executed.[2]

These provisions remain in effect until additional methods for protecting the rights of preferred shareholders are introduced into legislation.

The source of dividend payments is the JSC's net profit. Dividends on certain types of preferred shares may also be paid from special company funds previously formed for these purposes (Article 42 of the JSC Law). Dividend payments may also be financed from accumulated reserves or borrowed funds raised specifically for dividend payments.

To pay dividends to participants of a limited liability company (the "LLC"), a resolution must be adopted to pay dividends in proportion to the participants' interests or in another manner provided by the charter or a corporate agreement. In the latter case, information regarding such an agreement and the volume of participants' rights defined therein must be included in the Unified State Register of Legal Entities (the "EGRYUL").

Furthermore, there must be no restrictions on dividend payments, specifically (Article 29 of the LLC Law):

• The company must not meet the signs of insolvency (bankruptcy), and such signs must not appear as a result of the payment;
• The value of the company's net assets must exceed its charter capital and reserve fund (if any) and must not fall below them as a result of the payment (Article 30 of the LLC Law).

If the LLC has a board of directors, the charter may contain a provision requiring the board's recommendation on the dividend amount. Such a provision is included by analogy with the requirements of Article 42 of the JSC Law.

As a general rule, dividends to JSC shareholders must be paid within 25 business days of the record date. Dividends to LLC participants must be paid within the period established by the LLC charter or the resolution to pay them. This period cannot exceed 60 days from the date the resolution is adopted. If the charter specifies no payment period and none was set when adopting the resolution, dividends must be paid within 60 days (Article 28 of the LLC Law).

Resolution on Dividend Payments to a Foreign Participant (Shareholder) of a Russian Company

The resolution of the general meeting of shareholders is documented in minutes. There is no approved form for the minutes. They are drawn up in writing in two copies within three business days after the general meeting closes or after the deadline for receiving ballots if a remote vote is held (Article 63 of the JSC Law).

The adoption of the resolution and the composition of participants at the meeting (or remote vote) must be confirmed. In a public JSC, this is done by the person maintaining the shareholder register and performing the functions of the counting commission. In a non-public JSC, this is done by a notary or the person maintaining the shareholder register and performing the functions of the counting commission (Article 67.1 of the Civil Code).

If a JSC has a sole shareholder, a written decision of the sole shareholder is prepared (Article 47 of the JSC Law).

This decision includes:

• The date and place of the decision;
• Information about the sole shareholder (for a legal entity—name, OGRN, INN/KPP, and address; for an individual—full name, passport details, and residence address);
• The wording of the resolution on dividend payments, which must contain information on the dividend amount per share of each category (type), the form of payment, and the record date for determining the persons entitled to receive dividends.

The shareholder signs the decision themselves. Authentication of the adoption of the decision is required only if provided for by the company's charter (Article 47 of the JSC Law).

A resolution to pay dividends to LLC participants in companies with two or more participants is adopted by the general meeting by a majority of the total number of votes (unless the charter requires a larger majority). If the LLC has only one participant, they adopt the profit distribution decision unilaterally (Articles 28, 37, and 39 of the LLC Law). The source of dividends is the company's profit after taxation (net profit), determined according to accounting reports. Profit may be distributed as dividends quarterly, every six months, or annually, provided no payment restrictions exist.

Please note that the amount payable to each participant (shareholder) is specified in rubles. The resolution may establish that payments to foreign participants (shareholders) will be made in foreign currency. In this case, the resolution defines the exchange rate (set by the Central Bank of the Russian Federation) used for payment: either as of the date the dividend resolution is adopted or as of the date of payment.

In practice, several specifics exist regarding the notarization of corporate resolutions by foreign participants to pay dividends. We note that internal relations within an LLC or JSC registered in Russia, including the procedure for its governing bodies to adopt corporate resolutions, are subject to Russian law. Resolutions of the general meeting (or sole participant/shareholder) containing a foreign notary's certification of the signature's authenticity but not authenticated by a Russian notary are considered void. A Russian notary must issue a certificate of authentication for the resolutions, which cannot be obtained if the signature was merely witnessed by a foreign notary. A foreign notary's witnessing of a signature cannot be equated to the Russian procedure for authenticating the adoption of a resolution by a Russian notary; therefore, such resolutions carry the risk of being recognized as void, meaning they entail no legal consequences.

Dividend Payments to Participants (Shareholders) from Unfriendly States

Federal Law No. 127-FZ dated June 4, 2018, On Measures of Influence (Counteraction) on Unfriendly Actions of the United States of America and Other Foreign States granted the President of Russia the right to establish a special procedure for Russian legal entities to perform obligations to participants who are persons from unfriendly foreign states, including obligations to pay distributed profit/dividends, as a counter-measure to ensure economic sovereignty and security (Article 4.2.).

Thus, restrictions have been established as provided by Decree of the President of Russia No. 254 dated May 4, 2022, On the Temporary Procedure for Performance of Financial Obligations in the Sphere of Corporate Relations to Certain Foreign Creditors (the "Decree No. 254"), as well as Decree of the President of Russia No. 95 dated March 5, 2022, On the Temporary Procedure for Performance of Obligations to Certain Foreign Creditors (the "Decree No. 95"). These decrees establish, in particular, a temporary procedure for companies to perform obligations to pay profit to participants (shareholders) who are foreign persons associated with foreign states that commit unfriendly actions against Russia or Russian legal entities and individuals (including if such foreign persons hold citizenship of these states, or their place of registration, primary business location, or primary source of profit is in these states), or persons under the control of such foreign persons regardless of their place of registration (unless registered in the Russian Federation) or primary business location.

Please note that these Presidential Decrees do not specify an expiration date for this temporary procedure. These restrictions continue to apply today, as the President of Russia has issued no decisions to cancel the temporary procedure.

The list of foreign states and territories committing unfriendly actions against Russia and Russian legal entities and individuals includes: Australia, Albania, Andorra, the Bahamas, Great Britain (including the Crown Dependencies and British Overseas Territories), European Union member states, Iceland, Canada, Liechtenstein, Micronesia, Monaco, New Zealand, Norway, the Republic of Korea, San Marino, North Macedonia, Singapore, the United States of America, Taiwan (China), Ukraine, Montenegro, Switzerland, and Japan.[3]

Under Decree No. 95, persons from foreign states committing unfriendly actions are not recognized as such if they simultaneously meet the following requirements:

• They are under the control of Russian legal entities or individuals (Russian legal entities or individuals are the ultimate beneficiaries), including instances where this control is exercised through foreign legal entities associated with such foreign states;
• Information regarding the control over them has been disclosed to the tax authorities by the Russian legal entities or individuals.

A person is deemed to be under control if any of the signs specified in Article 5 of Federal Law No. 57-FZ dated April 29, 2008, On the Procedure for Making Foreign Investments in Economic Entities of Strategic Importance for Ensuring National Defense and State Security are present (Clause 1 of the Official Clarification of the Bank of Russia No. 3-OR dated June 2, 2023).

If a resolution to distribute profit (pay dividends) is adopted, payments to such participants (shareholders) are made in accordance with Decree No. 95.

The procedure for performing obligations established by Decree No. 95 applies to the performance of obligations in an amount exceeding 10 million rubles per calendar month (or the foreign currency equivalent based on the Bank of Russia exchange rate as of the 1st of each month). In the case of resolutions to pay (declare) dividends by JSCs registered in the Donetsk People's Republic, Lugansk People's Republic, Zaporozhye Region, or Kherson Region, the procedure applies to payments to foreign creditors regardless of the amount.

Thus, smaller obligations are performed in the general manner under Article 28 of the Federal Law On Limited Liability Companies and Article 42 of the Federal Law On Joint-Stock Companies. Accordingly, if the amount of distributed profit or dividends does not exceed 10 million rubles per calendar month (or the currency equivalent), the payment is made in the general manner.

To perform these obligations, the debtor may apply to a Russian credit institution to open a Type C account in the name of the foreign creditor (or a foreign organization entitled to record and transfer rights to securities—a foreign nominee holder). This account is intended for settlements under these obligations.

In case No. A40-66692/2023, a foreign legal entity sued to compel the performance of an obligation to transfer dividends on shares of a Russian JSC issuer. The dividends were transferred to a special "Type C" settlement account in Russian currency instead of the details specified in the client questionnaire. The courts stated: "Presidential Decrees are special norms relative to the provisions of the Civil Code, Federal Law No. 39-FZ dated April 22, 1996, On the Securities Market, and other regulations, and apply only to those legal relations where the subjects and objects are expressly named in the Decrees. The Plaintiff is a legal entity registered in the Republic of Cyprus, which is classified as an unfriendly country. The Plaintiff is a special subject falling under the regulation of Decree No. 95, which establishes a temporary procedure for performing financial instrument obligations to foreign creditors from unfriendly countries. The Defendant transferred the dividends received in the Plaintiff’s name to a Type C account, guided by special legal norms". Consequently, the courts found no grounds to satisfy the claims.[4]

Dividend payments to participants from friendly countries are made without the restrictions established for persons from unfriendly countries. It is necessary to verify the existence of a double taxation treaty (the "DTT") between Russia and the friendly country, as such treaties define the tax rates and rules applicable to dividends. Nevertheless, despite friendly status, transfers may be restricted by banks under currency control or if signs of control by persons from unfriendly states are present.

How to Open a Type C Account?

The regime for a Type C account is established by a resolution of the Board of Directors of the Bank of Russia. A Type C account is maintained in rubles. Funds in such an account cannot be subject to execution under enforcement documents, arrested, or subjected to claims for mandatory payments or other interim measures if the court or agency acts were issued after January 3, 2024.

A Type C bank account is opened in the name of the foreign creditor or the foreign organization entitled to record and transfer rights to securities. The basis for opening the account is an application from the debtor (a Russian legal entity) sent to a Russian credit institution. Decree No. 95 does not provide for the foreign creditor to open the account themselves.

There are no restrictions on a resident's right to send an application to open a Type C account in the name of a foreign creditor to any credit institution, even if the resident is not already a customer there. The application form is not standardized and may be determined by the credit institution. If necessary, credit institutions may adopt internal documents regulating Type C account procedures.[5]

It is not possible to use a previously opened bank account as a Type C account. Therefore, performing obligations must always involve opening a new Type C account; it is not permissible to apply the Type C regime to an existing account opened before the new account type was introduced.[6]

Please note that if an application to open a Type C account names an individual as the foreign creditor, and the credit institution lacks a license to open and operate accounts for individuals, it may refuse the resident-debtor's application. A bank account agreement is concluded with the foreign creditor when they apply to the bank to use the funds placed in the Type C account.[7]

Opening Type C bank accounts in the name of foreign creditors under Decree No. 95 is carried out as follows:

• Credit institutions do not require the foreign creditor's consent to open the Type C account;
• Foreign creditors do not require the submission of documents specified in Bank of Russia Instruction No. 204-I dated June 30, 2021, On Opening, Maintaining, and Closing Bank Accounts and Deposit Accounts, nor do they require the personal appearance of a representative;
• The credit institution identifies new clients (foreign creditors, their representatives, beneficiaries, and beneficial owners) in accordance with Federal Law No. 115-FZ dated August 7, 2001, On Counteracting the Legalization (Laundering) of Criminally Obtained Incomes and the Financing of Terrorism (the "Federal Law No. 115-FZ") based on available information no later than 30 days after opening the Type C account;
• The credit institution conducts full identification of foreign creditors and related parties as required by Federal Law No. 115-FZ if the foreign creditor applies to use the funds in the Type C account.[8]

In case No. A40-180151/2024, a Cyprus company sued a Russian bank to terminate the Type C regime for its custody accounts. The Plaintiff argued that Decree No. 95 should not apply to its accounts. The courts found that: "the applicant is a legal entity registered in the Republic of Cyprus, which is classified as an unfriendly country; therefore, the plaintiff is a special subject falling under the regulation of Presidential Decrees. The payment of dividends to the plaintiff in an amount exceeding the 10,000,000 ruble threshold is an object of a legal relationship also falling under the regulation of Presidential Decrees". Consequently, the defendant was not entitled to terminate the Type C regime, and the courts dismissed the claims.[9]

If a credit institution holding a Type C account is declared insolvent (bankrupt), the funds in the account are not included in the bankruptcy estate. The temporary administration of the institution must apply to open a Type C account in the same person's name at a credit institution designated by the Bank of Russia and transfer the funds there.

If a debtor transfers funds to a Type C account, the creditor may apply to the credit institution where the account is opened to use the funds according to procedures defined by the Central Bank of the Russian Federation (for obligations of credit and non-credit financial institutions) or the Ministry of Finance of the Russian Federation (for obligations of other debtors).

Performance of obligations to pay profit to participants from unfriendly states by LLCs, business partnerships, or production cooperatives without using a Type C account is permitted only based on permits issued by:

• The Bank of Russia, for residents that are credit or non-credit financial institutions;
• The Government Commission for Control over Foreign Investments in the Russian Federation (the "Government Commission"), for other residents.

Procedure for Obtaining a Dividend Payment Permit

Decisions to issue permits for profit (dividend) payments to foreign creditors are generally granted subject to the following conditions:

• The dividend amount is no more than 50% of the net profit for the previous year;
• A retrospective analysis of profit (dividend) payments for past periods is considered;
• Foreign creditors (participants/shareholders) are willing to continue commercial activities in Russia;
• The positions of federal executive bodies and the Bank of Russia regarding the significance of the organization's activities and their impact on Russia's technological and industrial sovereignty and socio-economic development are considered;
• Applicants perform their obligations to meet key performance indicators (the "KPIs"), as confirmed by federal executive bodies (or the Bank of Russia);
• The possibility of quarterly payments, provided the established KPIs are met.[10]

Notably, residents may be granted permits to pay dividends without meeting these conditions if the foreign creditors made investments in the Russian economy after April 1, 2023 (including expanding production or developing new technologies), provided the payment amount does not exceed the volume of such investments.[11]

As a general rule, a permit application is submitted by the resident or the person from an unfriendly state to the Ministry of Finance of Russia (the "Minfin"), which is the federal body responsible for state policy in budgetary, tax, currency, and banking activities.

The rules for issuing permits by the Government Commission, approved by Government Decree No. 295 dated March 6, 2022 (the "Decree No. 295"), establish requirements for the application and the accompanying documents. Specifically, the free-form application must include:

• The purpose, subject, content, and material conditions for the dividend payment;
• The planned duration of the subcommittee permit;
• The dividend payment schedule;
• Confirmation of the obligation to pay dividends;
• The currency of payment;
• Full names of the credit institutions through which the dividends will be paid;
• Information about the dividend recipients;
• The amount of dividends for which the permit is requested.

It is also mandatory to provide information on dividends paid over at least the five years preceding the application date.

The application must also include information on KPIs and their target values for the Russian organization paying dividends. Under Decree No. 295, these should be proposed as conditions for the payment. Monitoring the achievement of KPIs is conducted by the relevant federal executive bodies defined in the subcommittee decision. The subcommittee determines which documents will confirm KPI achievement and the deadlines for submission.

The following documents must also be attached to the application:

• Confirmation of the Russian organization's state registration and its constituent documents;
• Confirmation of the foreign recipient company's establishment;
• Information on the beneficiaries, beneficial owners, and controlling persons of the foreign recipient company.

The application and documents must be in Russian. If originals are in a foreign language, they must be submitted with a certified translation into Russian (with an apostille from the competent authority of the state where the document was issued). Documents must be bound and stamped (if applicable) by the applicant. If the applicant is an individual, documents must be signed by them, with the signature notarized.

The information provided must be complete and accurate. If an applicant cannot provide the full scope of information, they must provide what is available, state the reasons for the inability to provide the rest, and specify where it can be obtained. Any changes in information must be reported to the authorized body in writing within three days of the applicant learning of the changes.

The application for a permit to perform obligations to pay profit in LLCs, partnerships, or cooperatives is submitted to the authorized body and the federal executive body responsible for the sector in which the applicant operates.

The supervising federal body sends the authorized body a reasoned position on the expediency or inexpediency of issuing the permit.

The subcommittee decision, issued by the authorized body, constitutes the commission's permit (including conditions and deadlines) or refusal. Such decisions enter into force on the date the head of the authorized body signs them, unless the Commission establishes otherwise.

Terminating a resident's obligation to pay profit to participants from unfriendly states via set-off is permitted only based on permits issued by the Bank of Russia (for financial institutions) or the Government Commission (for other residents).[12]

Decree No. 295 does not address the possibility or procedure for obtaining a subcommittee permit to set off a Russian company's dividend obligation against a foreign recipient company's obligations to the Russian company.

Taxation of Dividends to Foreign Participants (Shareholders)

As a general rule under Article 275 of the Tax Code, a Russian organization paying dividend income (to either Russian or foreign entities or individuals) is recognized as a tax agent. It must calculate, withhold, and transfer the tax to the budget. Tax calculation methods and rates vary based on the recipient's tax residency (resident vs. non-resident) and legal status (entity vs. individual).

The PIT rate is set at 15% for dividends received from a Russian organization by a non-resident individual. This rate applies unless different rates are established by DTTs. PIT is withheld only upon payment; no tax is paid on declared but unpaid dividends.

For corporate recipients, the tax base for each payment is defined as the amount of dividends paid, to which the tax rate established by Article 284 of the Tax Code applies, unless different rates are provided by an international treaty:

• 15%—the standard rate (Subclause 3, Clause 3, Article 284 of the Tax Code);
• 5%—for income of foreign persons from dividends on shares (interests) of international holding companies that are public companies as of the payment date (applies to income received before January 1, 2029);
• 10%—for dividends of a foreign company from shares in an international holding company in other cases, provided the recipient's state is not on the list of offshore jurisdictions (applies to income received before January 1, 2036). As of July 1, 2023, the offshore list includes 91 states, including the USA, EU countries, Great Britain, Canada, South Korea, Singapore, and others.[13]

An international treaty between Russia and the recipient's state may provide for a different rate. In such cases, the treaty rate must be used (Articles 275 and 310 of the Tax Code).

Since January 1, 2021, certain bilateral DTTs are subject to the provisions of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (concluded in Paris on November 24, 2016), ratified by Federal Law No. 79-FZ dated May 1, 2019. The list of countries is provided in the Minfin Information Message. The Ministry posts notifications on its website regarding the application of the Multilateral Convention to specific treaties.[14]

To apply a reduced rate under an international treaty, a Russian organization must obtain from the foreign company (Article 312 of the Tax Code):

• A document confirming its permanent location in the state with which the treaty was concluded;
• A document confirming the foreign organization's actual right to receive the income.

By Decree of the President of Russia No. 585 dated August 8, 2023, On the Suspension by the Russian Federation of Certain Provisions of International Treaties of the Russian Federation on Taxation, and later by Federal Law No. 598-FZ dated December 19, 2023, parts of DTTs with unfriendly countries were suspended. This applies to payments made from August 8, 2023, and does not affect prior payments.

Thus, when paying dividends to participants (shareholders) from unfriendly states where the DTT has been suspended, the corporate profit tax rate will be 15%.

Generally, profit tax on dividends must be paid to the budget no later than the 28th day of the month following the month of payment (Article 287 of the Tax Code). If the 28th falls on a weekend or holiday, the tax must be paid no later than the next business day (Article 6.1 of the Tax Code).

In conclusion, dividend payments to participants (shareholders) from friendly countries are currently made without restrictions in the general manner provided by the LLC and JSC laws. Conversely, payments to participants (shareholders) from unfriendly states are not prohibited but have moved to a strictly controlled procedure requiring mandatory approval from government authorities.

References

[1] Letter of the Ministry of Finance of Russia No. 03-03-10/90152 dated October 15, 2020.

[2] Resolution of the Constitutional Court of the Russian Federation No. 31-P dated September 25, 2025, On the Case Concerning the Review of the Constitutionality of Clause 5 of Article 32 and Clause 3 of Article 42 of the Federal Law On Joint-Stock Companies in Connection with the Complaint of Citizens Alexander Pavlovich Beblov, Elena Gennadyevna Beblova, and Others.

[3] Order of the Government of Russia No. 430-r dated March 5, 2022, On the Approval of the List of Foreign States and Territories Committing Unfriendly Actions Against the Russian Federation and Russian Legal Entities and Individuals.

[4] Resolution of the Arbitration Court of the Moscow District dated March 29, 2024, in Case No. A40-66692/2023.

[5] Application of Presidential Decrees Establishing Measures of Influence (Counteraction) Aimed at Ensuring the Financial Stability of the Russian Federation. Official website of the Bank of Russia. 2023. URL: http://www.cbr.ru.

[6] Ibid.

[7] Letter of the Bank of Russia No. 12-4-2/3652 dated May 16, 2022, On the Temporary Procedure for Performance of Obligations to Certain Foreign Creditors.

[8] Official Clarification of the Bank of Russia No. 2-OR dated March 18, 2022, On the Application of Certain Provisions of Decree of the President of the Russian Federation No. 79 dated February 28, 2022, Decree of the President of the Russian Federation No. 81 dated March 1, 2022, and Decree of the President of the Russian Federation No. 95 dated March 5, 2022.

[9] Resolution of the Arbitration Court of the Moscow District No. F05-12764/2025 dated August 27, 2025, in Case No. A40-180151/2024.

[10] Excerpt from the Decision of the Subcommittee of the Government Commission for Control over Foreign Investments in the Russian Federation No. 171/5 dated July 7, 2023.

[11] Excerpt from the Minutes of the Meeting of the Subcommittee of the Government Commission for Control over Foreign Investments in the Russian Federation No. 182/5 dated August 9, 2023.

[12] Official Clarification of the Bank of Russia No. 4-OR dated October 30, 2024, On the Application of Certain Provisions of Decree of the President of the Russian Federation No. 254 dated May 4, 2022, Regarding the Termination of Obligations by Set-off.

[13] Order of the Ministry of Finance of Russia No. 86n dated June 5, 2023, On the Approval of the List of States and Territories Providing a Beneficial Tax Regime and (or) Not Providing for the Disclosure and Submission of Information During Financial Operations (Offshore Zones).

[14] Information Message of the Ministry of Finance of Russia, On the Commencement of the Application of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, as of January 21, 2021.