Conditions on the procedure of payment of dividends to shareholders have been eased

Legal Digest News
The Ministry of Finance and the Central Bank of the Russian Federation have eased the previously established rules on the payment of dividends to foreign shareholders from "unfriendly" countries.

Government agencies report that the payment of dividends to foreign shareholders from countries that commit unfriendly actions against Russia, Russian legal entities or individuals, without observing previously approved restrictions, is possible under the following conditions:

  • implementation of investments in the Russian economy by foreign shareholders after April 1, 2023, including the expansion of production in the Russian Federation, the development of new technologies;
  • the excess of the amount of dividends is not more than the amount of incoming investments.

These provisions are fixed in an extract from the Minutes No. 182/5 of the meeting of the sub-commission of the Government Commission for the Control of Foreign Investment of the Russian Federation (Sub-Commission) dated August 9, 2023.

At the same time, the document does not contain a list of investments that exempt foreign creditors from restrictions on receiving dividends. It is assumed that new explanations of the Ministry of Finance of the Russian Federation on this issue will be released in the nearest future.

Please be reminded that earlier the Sub-Commission clarified the requirements for transactions on the payment to foreign persons of profits received by Russian companies in the form of dividends. The main criteria for making such transactions are:

  • the amount of dividends paid is not more than 50% of the net profit for the previous year;
  • willingness of foreign participants to continue commercial activities in Russia;
  • the company's implementation of key performance indicators, confirmed by federal executive authorities or the Central Bank of the Russian Federation;
  • the possibility of paying dividends quarterly;
  • accounting for the amount of dividends and the procedure for their payment for previous periods.

In the matters of the implementation of transactions with the payment of dividends to foreign founders, please contact Acsour legal department.