On 10 July 2026, the Ministry of Finance of the Russian Federation published official clarification* No. 5 (the “Clarification”) on the application of Presidential Decree No. 618* of 8 September 2022 (“Decree No. 618”). The Clarification identifies two additional exemptions from the special clearance procedure set forth by Decree No. 618.
By way of reminder, the special permit from the Government Commission for the Control of Foreign Investment in the Russian Federation (the “Permit”) is required to carry out certain transactions, including mergers and acquisitions, involving non-residents from “unfriendly” states.
According to the Clarification, the following cases are exempted from the Permit:
1. Changes to the corporate governance structure of a limited liability company (LLC)
The Ministry of Finance has clarified that changes to the corporate governance structure of an LLC, implemented through amendments to its articles of association, do not fall within the scope of Decree No. 618. This applies where the amendments concern:
In essence, these are internal corporate changes relating to the redistribution of powers among the LLC's governing bodies. For example, this may involve transferring specific matters from the scope of competence of the general meeting of participants to the board of directors, or vice versa, as well as establishing or dissolving the board of directors.
Prior to the publication of the Clarification, there was uncertainty as to whether such redistributions of competence could fall within the scope of Decree No. 618.
In certain circumstances, changes to the scope of competence of the LLC's governing bodies and the redistribution of authorities among them may indeed alter the balance of power between the LLC's participants. As a result, it was not possible to give a definitive answer as to whether such changes required the approval of the Government Commission.
In practice, however, the prevailing approach was that such internal corporate procedures did not require Permit, as they generally did not involve the transfer of corporate rights or a change in corporate control by foreign “unfriendly” persons.
The Clarification confirmed this established practice. A more conservative approach would have required Permit for virtually any redistribution of powers between corporate bodies, which would have significantly complicated the corporate governance of Russian LLC.
2. Redemption of a share in an LLC and reduction of the share capital
The second part of the Clarification concerns changes to the shareholdings of participants in an LLC resulting from the redemption of a share held by an LLC itself, provided that the share has neither been distributed among the participants nor sold to third parties.
The Ministry of Finance has confirmed that, in such circumstances, the special Permit set forth by Decree No. 618 is not triggered.
It is important to note, however, that the Clarification relates exclusively to the redemption of the LLC’s own share as part of a reduction of the LLC’s share capital. This exemption does not apply to cases where a share in the LLC’s authorised capital is distributed among the participants or sold to third parties.
The regulator’s reasoning appears to be that no Permit is required because a share held by the LLC itself (and transferred to the LLC on lawful grounds and, where required, with the Permit of the Government Commission) does not carry voting rights. Consequently, its redemption does not result in the redistribution of voting rights or other rights in relation to the LLC in favour of foreign “unfriendly” sharehoder. Accordingly, requiring additional approval from the Government Commission for such a transaction would appear to serve no practical purpose.
Overall, the Clarification does not alter the general approach to the application of Decree No. 618 in relation to transactions and other corporate actions covered by the Decree. In practice, every such transactions (or actions) must still be assessed separately to determine whether Permit is required and, where it is, the respective Permit must be obtained.
It should also be noted that, formally, the Clarification applies to Russian limited liability companies, transactions involving which are governed by Decree No. 618. It is reasonable to assume that a similar approach should also apply to joint-stock companies, to the extent applicable, taking into account the specific characteristics of this legal form.
We will continue to monitor the practical implementation of this Clarification, as well as any further clarifications issued by the state authorities regarding the joint-stock companies.
* In Russian
Co-authored by Ksenia Voloshchenko, Associate in Antitrust & Regulatory.