Real estate transactions involving persons from “unfriendly” countries: main changed for April 2022

It should be recalled that on the 1st of March 2022, a Presidential Decree[1] came into force, which provides for the introduction from 02 March 2022 of a special procedure for transactions by residents of the Russian Federation entailing the emergence of title to immovable property with persons from “unfriendly” countries[2]

Explanations from the Bank of Russia

On the 18th of March 2022 official clarifications from the Bank of Russia followed[3], according to which restrictions related to the introduction of a special procedure for real estate transactions with persons from “unfriendly” countries do not apply to the following cases, among others:

  • real estate, including real estate under construction, is located outside the Russian Federation and transactions involving such real estate are settled using accounts opened by Russian residents with foreign banks located outside the Russian Federation and disclosed by residents to the Russian tax authorities;
  • on transactions involving special foreign persons[4] .

In its explanations the Bank of Russia also clarifies that in determining who is a resident of the Russian Federation one should be guided by the term “resident” as defined in the Federal Law of 10.12.2003 No. 173-FZ “On Currency Regulation and Currency Control”, which includes the following persons

  • Russian citizens[5] ;
  • foreign nationals and stateless persons permanently residing in the Russian Federation on the basis of a residence permit;
  • legal entities established under Russian law (except for foreign legal entities registered under the Federal Law “On International Companies”);
  • branches, representative offices and other subdivisions of Russian residents established in accordance with Russian legislation and located outside the Russian Federation;
  • Diplomatic representations, consular offices;
  • Russian Federation, constituent entities of the Russian Federation, municipalities.

Clarifications from the Ministry of Finance of the Russian Federation

In accordance with the official clarifications of the Russian Ministry of Finance published on the 22nd of March 2022. [6]In accordance with the official clarifications of the Russian Ministry of Finance published on the 22nd of March 2022, a subcommittee of the Government Commission for the Control of Foreign Investment in the Russian Federation (the “Government Commission“) decided to allow individuals resident in the Russian Federation without the permission of the Government Commission:

  • to sell immovable property to non-residents from “unfriendly” countries;
  • to buy real estate from non-residents from “unfriendly” countries on condition that the funds for such transactions are deposited into a special type C bank account;
  • to enter into a DDU contracts with non-residents from “unfriendly” countries.

It should also be recalled that according to Presidential Decree No. 95 of 05.03.2022, legal persons from “unfriendly” countries may carry out transactions without the approval of the Government Commission if such persons simultaneously[7] :

  • controlled by Russian legal entities/individuals, including where control is exercised through foreign legal entities from “unfriendly” countries;
  • information on their control disclosed by the controlling Russian entities/individuals to the Russian tax authorities, which must be documented when contacting the Rosreestr[8] .

Explanations from the Rosreestr

In its clarifications of 28 March 2022[9] , Rosreestr summarised the above provisions and additionally noted that in respect of Russian citizens, including those holding a residence permit in an “unfriendly” country or dual citizenship:

  • the ownership registration process is unchanged if the transaction is with a person who is not related to the “unfriendly” person;
  • The Russian Federation’s citizenship is legally relevant for the registration of property rights;
  • The Rosreestrator does not impose additional requirements for the inclusion of wording regarding foreign persons in contracts of sale;
  • the procedure for submitting applications for cadastral and rights registration, as well as the list of documents required for registration and cadastral operations, has not changed.

[1]   Presidential Decree No. 81 of 01.03.2022 “On Additional Temporary Economic Measures to Ensure Financial Stability in the Russian Federation”.

[2]   In accordance with Russian Government Decree No. 430-r of 5th of March 2022, the list of foreign countries committing unfriendly acts against the Russian Federation includes Albania, Andorra, Australia, Canada, Iceland, Liechtenstein, Monaco, New Zealand, Norway, the United Kingdom, the United States and several other countries.

[3]   Official clarification of the Bank of Russia No 2-OR dated 18.03.2022 “On application of certain provisions of Presidential Decree No 79 dated 28 February 2022 “On application of special economic measures in relation to unfriendly acts of the United States of America and foreign states and international organizations joining them”, Presidential Decree No 81 dated 1 March 2022 “On additional temporary economic measures to ensure financial stability in the Russian Federation

[4]   The term “special foreign persons” is not currently disclosed by Russian law.

[5]   A citizen of the Russian Federation who also has another citizenship is only considered to be a resident citizen of the Russian Federation.


[7]   p. 12 Presidential Decree No. 95 of 05.03.2022 “On Temporary Order of Obligations to Certain Foreign Creditors”.

[8]   Such confirmation may be a receipt from the Federal Tax Service of Russia confirming receipt of an electronic document, a mark of acceptance of the document or a postal receipt with the list of attachments marked by the postal authority.


Arina Dovzhenko

+7 931 210 09 55
St. Petersburg