Ministry of Economic Development of the Russian Federation
Ministry of Economic Development of the Russian Federation
The Government has approved the DQO "action plan" in the field of corporate governance
13 July 2020 15:12

The action plan includes measures aimed at improving corporate procedures, bankruptcy, regulation of special administrative regions (SAR) on the islands Russky (Vladivostok) and Oktyabrsky (Kaliningrad), as well as appraisal activities.

The transformation of the procedure for withdrawal an LLC and reorganizing business entities, as well as the possibility for companies to acquire their own shares, will help reduce the administrative costs of creating and liquidating a legal entity and simplify capital management mechanisms.

Improving the legislation on Special administrative regions (SAR), adopted in August 2018, will improve the attractiveness of the Russian jurisdiction for foreign investors, as well as create opportunities for the return of Russian capital to the country's economy from offshore. For the SAR, it is supposed to legalize the issue of different types of shares by resident companies, fix the possibility of "transit" redomicilation (i.e., the possible transfer of a company to the SAR from another jurisdiction with an additional jurisdiction, for example, the Netherlands – Cyprus – SAR), and exempt the SAR residents from taxation of branch income and exchange rate differences. When deciding to register in SAR international companies will get additional opportunities if investing in the economy of the regions where such areas are located.

For reference: to date, 30 companies and one Fund have been registered.

Changes to the law on bankruptcy of legal entities, including the creation of a bankruptcy rehabilitation procedure, the creation of a market place (online storefront) for disclosing data on the bankruptcy estate and sale of property of debtors, shortening the deadlines and changing the procedure for bidding (the so-called Anglo-Dutch auction ) will reduce the time and costs for businesses to carry out the procedures used in the bankruptcy case. Moreover, the new mechanism proposed by the Ministry of Economic Development makes the bankruptcy procedure more flexible and increases the motivation of the creditor and debtor to conciliate even in the case of a "crisis" state of affairs of the latter.

Clarifying the procedure for ensuring property liability of appraisers and experts of self-regulating organizations (NPOs that unite business entities working in a particular industry), creating a mechanism for registering their reports in a single system, will make this procedure more transparent and better, and increase its reputation in the market.

The adoption of these draft laws will improve the financial stability and investment attractiveness of the country, and make corporate legislation more convenient for business.

Дата публикации: July 13, 2020
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