1. Introduction
    1. Political and administrative structure
    2. Legal environment
  2. Common forms of business structures for foreign investors
    1. Main types of structure
    2. Registration, liquidation and reorganisation of business structures
    3. Shareholders’ and participants’ agreements
    4. Strategic industries
  3. Anti-monopoly issues
    1. General legal and regulatory framework
    2. Scope of application of the Competition Law
    3. Anti-competitive practices and restriction of competition
    4. Liability
  4. Tax system
    1. General approach
    2. Corporate taxation
    3. Incentives
    4. Special tax regimes
    5. Taxation of individuals
    6. Double taxation treaties
  5. Customs regulations
    1. General approach
    2. Mutual trade between the EEU members
    3. Trade between EEU and non-EEU countries
  6. Currency control
    1. Foreign currency transactions
    2. Consequences of breach/Penalties
  7. Lending in Russia
    1. Lending documents and governing law
    2. Jurisdiction
    3. International finance transactions and repatriation requirements
    4. Security interests
    5. Recognition of security trusts
    6. Syndicated loans
    7. Enforcement
    8. Suretyships and guarantees
    9. Bankruptcy considerations
    10. Other lending related issues
  8. Employment and migration
    1. Formalising the employment relationship
    2. Managing employment relationships
    3. Terminating an employment agreement
    4. Specifics of employing foreign nationals
  9. Personal data protection
    1. General approach
    2. Scope of the Data Protection Law
    3. Liability
    4. Right to be forgotten
  10. Intellectual property
    1. General approach
    2. Contractual aspects of intellectual property rights
    3. Rights over the results of intellectual activity
    4. Company names, trade names, trademarks and appellations of origin
    5. Intellectual property rights infringements
    6. IP Court
  11. Advertising issues
    1. General approach
    2. Scope of application of the Advertising Law
    3. Violations of the Advertising Law
    4. Liability
  12. Anti-corruption and compliance
    1. General approach
    2. Legal framework
    3. Compliance requirements for companies
    4. Concept of corruption in Russian law
    5. Possible targets of bribery
    6. Liability and penalties for corruption
    7. Example of sector-specific anti-corruption measures
  13. Real estate and construction
    1. Rights to real estate
    2. Real estate transactions
    3. Resolution of real estate disputes
    4. Planning and construction issues
  14. Corporate bankruptcy
    1. Insolvency criteria
    2. Stages of bankruptcy proceedings
  15. Import substitution and production localisation in Russia
    1. Measures affecting goods importation and current import substitution legislation
    2. Localisation incentives
    3. Sector-specific impact of import restrictions and localisation requirements
  16. Banking sector
    1. Legislative and regulatory framework
    2. Licensing and operations
    3. Deposit insurance
    4. The anti-money laundering law
    5. Bank secrecy
    6. FATCA and CRS
  17. Environment, energy efficiency and renewables
    1. Environment
    2. Energy efficiency
    3. Renewables
  18. Infrastructure and public private partnerships
    1. General approach
    2. Key PPP legislation
    3. Russian PPP environment
    4. Financing
    5. Legal issues
    6. Prospects for infrastructure projects
  19. Oil & gas
    1. Legislative framework
    2. Ownership and licensing
    3. Restrictions on foreign investors
    4. Licences
    5. PSAs

Lending in Russia

We set out below a brief discussion on certain matters related to lending to companies in Russia, by banks and other companies, with particular focus on foreign currency and secured lending.

Key contacts

Konstantin Baranov
Konstantin Baranov
Head of Banking & Finance
T +7 495 786 40 70

Syndicated loans

In 2015, the Association of Regional Banks of Russia prepared a Russian law LMA style syndicated loan agreement, which follows the format and generally reflects the substance of the English law LMA loan agreement subject to certain modifications driven by the Russian law requirements. This loan agreement is designed to be primarily used in syndicated transactions between Russian residents. 

To further promote syndicated lending in Russia, in 2018 the Law on Syndicated Loans was adopted. The law introduced the concept of a syndicated facility (loan) into the Russian legislative framework, confirms some current market practices and closes certain legal loopholes. However, there is still a number of legal issues related to Russian law syndicated loans, which need to be clarified by court practice or further legislative developments.


The Law on Syndicated Loans generally recognises the legal nature of a syndicated loan agreement in line with international market practice: several creditors enter into a syndicate undertaking to provide the borrower with funds in concert with each other, with each having independent rights of claim.

One of the resulting drawbacks, however, is that in the event of insolvency proceedings in respect of the borrower, each syndicate member will have to file its claim against the borrower separately. There is no provision permitting delegation of these powers to the facility or security agent. Since this is contrary to the general purpose of the syndicate, we expect that this issue (as well as a few other issues relating to the secondary loan market) will be resolved in the future by way of amendments to the Law on Syndicated Loans and Russian insolvency law, a bill to this effect having been submitted to the State Duma in October 2019. 

Further, particular aspects of a Russian law syndicated loan transaction (e.g. the role of the agent, decision-making by lenders, termination of the agreement) must be governed by the rules of the Russian Civil Code, but the application of these rules is not always clear.

The role of the facility agent

A syndicated loan agreement must provide that one of the syndicate participants, the “facility agent”, exercises the rights of creditors under the syndicated loan agreement on their behalf. The facility agent can be a Russian credit institution, VEB.RF, a foreign bank or an international financial institution. The Russian legal rules on the contract of commission apply to the obligations of the facility agent in relation to the other creditors.

The borrower’s payment obligations to creditors are deemed to be performed when funds are transferred to the facility agent. At the same time, other syndicate members cannot individually exercise their rights as creditors prior to the termination of the loan agreement or until the syndicate members cancel the powers of the facility agent.

One of the criticised provisions of the Law on Syndicated Loans is that the fees of the facility agent (as well as its expenses) are payable by the syndicate participants. This rule contradicts the established practice, in accordance with which the agency fees are usually paid by the borrower (fortunately, the Law on Syndicated Loans allows the parties to derogate from it by agreement).

The role of the security agent

The Law on Syndicated Loans further develops the concept of the security agent. The law points out that the facility agent may only act as the security agent if it is expressly envisaged in the syndicated facility agreement.

The security agent acts on behalf of all the pledgees and represents their interests vis-à-vis the registration authorities (including the submission of notices on pledge and pledge termination notices to the state registers). As a result, if the composition of the syndicate changes, the security agent can take all necessary registration actions (no further involvement of the pledgees is required).

The lenders cannot exercise their pledgee rights individually until the security management agreement or syndicated loan agreement terminates.

Secondary syndicated loan market

The Law on Syndicated Loans also contributes to the development of the secondary market for syndicated loans in Russia. Unless otherwise agreed, a lender may assign its rights to any other person without the consent of the other syndicate participants. A lender may also transfer its obligation to grant a loan to another person who qualifies as a syndicate member under the Law on Syndicated Loans (e.g. foreign and domestic credit institutions). To simplify the procedure, the loan agreement may contain the borrower’s preliminary consent to such transfer.

The assigning lender must notify the security agent and the facility agent, so that the latter can make the relevant changes to the syndicate participants’ register and send a respective notice to the borrower. The facility agent itself cannot transfer its rights as a creditor under the syndicated loan agreement until the termination of its authority.

In addition to the above, a syndicated loan agreement may include provisions for the accession of new lenders.

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Key contacts

Konstantin Baranov
Konstantin Baranov
Head of Banking & Finance
T +7 495 786 40 70