Buying Shares in a Russian Company
Buying Shares in a Russian CompanyUpdated on Thursday 13th October 2016
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Foreign investors interested in owning a business in Russia can do so without registering a new company. Among the options they have are: buying a shelf company to which they can bring the changes they consider, or buying shares in a Russian company. The second choice is probably the less time consuming. The legislation also allows a Russian company to sell its shares. The laws related to selling/buying shares in a company in Russia are the Civil Code and the specific laws applicable to private and public companies.
Our Russian lawyers can offer detailed information about the laws above.
Foreign investors buying shares in Russian companies
The law allows companies in Russia to trade their shares in or outside the country provided that they are joint stock companies or change their status. However, there are also certain restrictions applicable to foreign investors purchasing shares in a company in Russia. These are:
- - the purchase of shares in an insurance company can be completed only with the relevant authority’s approval;
- - buying shares in a Russian media company is limited at 20%.
There are also other Russian industries where such limitations are imposed upon the purchase of company shares.
The video below shows the main ways to acquire shares in a Russian company:
Purchasing shares in private and public companies in Russia
While the purchase of shares in a private company depends on the seller and the buyer who must agree upon the terms of the transaction and then the signing of the sale-purchase agreement, buying shares in a Russian public company depends on several other factors. First of all, company due diligence is recommended in order for the buyer to make sure they make the right choice. Secondly, pre-bids are regular when it comes to public companies in Russia. However, once these two steps have been completed, the parties can negotiate and later on complete the transaction.
In both types of transactions, the shareholders are required to announce the sale of shares and prepare all necessary documents related to the sale.
For complete information about the obligations of the seller and the buyer in any type of transaction with shares, you can rely on our law firm in Russia. You can also contact us for assistance in opening a new company in Russia.