Since 1 March 2022, Russia has had a special procedure for real estate transactions[1] involving persons from “unfriendly” countries[2]. That procedure has been somewhat liberalised for individuals[3]
Continuing a trend, on 7 September the Government Commission for the Control of Foreign Investment (the “Commission“) decided to allow residents to carry out (execute) transactions (operations) entailing the acquisition of title to immovable property acquired by:
- foreign companies associated with “unfriendly” countries; and/or
- companies that are controlled by foreign entities linked to “unfriendly” countries.
The Commission’s decision is valid indefinitely.
To sum up, and in view of previous regulation, the following list shows the transactions most typical for legal entities. Those not requiring Commission approval are in green, while those requiring approval are in red:
Further, the specific regulation applies not only to real estate purchase and sale transactions, but also to all other transactions that give rise to ownership rights (e.g., transactions involving the contribution of real estate to a legal entity’s share capital/property, donation transactions, exchange transactions). However, there are no restrictions on leasing of immovable property.
[1] There is a special procedure for real estate transactions with persons from “unfriendly countries”.
[2] Pursuant to Russian Government Decree No. 430-r of 5 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 a number of other countries, among others.
[3] Real estate transactions involving persons from “unfriendly” countries: key changes for April 2022