Redomiciliation: a new impetus for bringing Russian business home
According to Vladimir Putin’s instructions, by 1 April 2025 it should be possible to redomicile holding companies registered in unfriendly jurisdictions while retaining the status of international companies in Russia. This instruction was a response to the numerous problems faced by Russian companies when trying to return their business to their home country. The key condition is that the laws of the foreign country must not provide for or prohibit redomiciliation, and the company itself must fulfil all necessary corporate procedures. The process of redomiciliation – moving a company’s legal address from one jurisdiction to another – has become particularly topical.
What problems are being addressed by the new mandate
Until now, there have been serious obstacles to redomiciliation, especially for holding structures. The legislation of many countries, especially those that have fallen under sanctions, does not provide for or actively discourages such procedures. This created uncertainty and risks for businesses. The new order is designed to remove these obstacles by providing a legal basis for the return of Russian assets and preserving their status. It is important to note that this refers to companies that voluntarily seek to redomicile, rather than forced relocation.
Difference between voluntary redomiciliation and the 470-FZ process
The voluntary redomiciliation referred to in the Presidential Instruction should be distinguished from the process associated with Federal Law No. 470-FZ ‘On Economically Significant Organisations’. The 470-FZ regulates the activities of EZOs (economically significant organisations) and can be used to forcibly transfer control of a company into Russian hands if it poses a systemic threat to the Russian economy. This process has significant differences from voluntary redomiciliation regulated by international company law. Voluntary redomiciliation is a company’s choice, while the process associated with the 470-FZ can be carried out regardless of the company’s own wishes.
Further prospects
A number of large companies have already successfully redomiciled, but the experience of these companies shows that the process is complex and requires a comprehensive approach, which is why the presidential instruction is so important. It is intended to develop a clear and transparent redomiciliation procedure, removing all obstacles and providing legal certainty for businesses.