Russia has always been an attractive country for foreign investors because the Government makes no differences between local and foreign enterprises.
Moreover, foreign companies are also welcome to create strategic partnerships or joint ventures with Russian companies.
However, another category of investors is those buying shares in a Russian company. Several laws, among which: permit the sale of shares in Russian companies
- the Commercial Code;
- the Civil Code;
- the Joint Stock Companies Act.
The last-mentioned law refers to the sale of shares in public companies in Russia.
The Russian Commercial Law provides for share sales in the public and non-public companies.
The second terms introduced recently in the business language.
Public companies are represented by the joint-stock companies, while the non-public ones are the private limited liability companies.
Share sales in private companies in Russia are divided into two categories:
- the direct sale of the company, which is also known as a ”one-tier structure”;
- the sale of shares in a holding company with Russian subsidiaries is a ”two-tier structure”.
No matter the type of sale, it is necessary for the parties (the seller and the buyer) to draft a sale-purchase agreement based on which the transaction will be concluded.
The main advantage of selling shares in a Russian company is that the transaction does not require additional business permits, as in the case of assets sales. Share sales in Russia are also VAT-free.
Even if selling shares in a company has more advantages than selling the whole Russian company, one must know certain restrictions attached to the possible deal.
The most important ones appear in the Articles of Association of the company and may imply the shareholder’s preemptive rights.
The Commercial Law may impose other restrictions on share sales in public companies; however, these deals could be possible if the Russian Central Bank approves the transaction.
For complete information about the legal requirements for selling shares in a company, don’t hesitate to contact our law firm in Russia.