Special Administrative Region
Special Administrative Region
Goals of the SAR
- Formation of favorable financial and administrative conditions for the development of business
- Attraction of capital to the Russian Federation
- Deoffshorisation of the Russian economy
- Infrastructure development of the territory
The role of the management company
In accordance with Federal Law No. 291-FZ “On special administrative regions in the territories of the Kaliningrad Region and Primorsky Krai”, dated 03.08.2018, the Russian Far East and Arctic Development Corporation is the management company of the SAR on Russky Island.
The main objectives of the FEDC:
- Involvement in the registration of international companies
- Making decisions on granting the status of a member of the SAR
- Maintaining a register of SAR participants
- Coordination of activities and administrative support for SAR participants
- Providing SAR participants with the services necessary to carry out their activities (including legal services, accounting services)
- Monitoring of the activities of international companies
For whom
A foreign legal entity that is a commercial corporation and has decided to change its governing law can become an international company.
What is an IHC (International Holding Company) and what is the reason for this status?
International holding companies are also international companies, but have a special legal status in order to receive tax privileges.
Advantages
Currency non-residents
Transfers without restrictions of money in foreign and Russian currencies from and into the territory of Russia without opening accounts
Cash settlements in both foreign currency and the currency of the Russian Federation
Administrative preferences
Help desk service for investors
Assistance in choosing a place of registration
Legal and accountancy services
Possibility to build infrastructure facilities
An international company or its subsidiary company can become a resident of the FPV
With equity> 15% and tenure <1 year
If the payer is a foreign company, then NOT from offshore (in accordance with the list of the Ministry of Finance of the Russian Federation)
Dividends to foreign persons from the IC
With equity > 15% and tenure >1 year
A foreign company NOT from offshore territory (in accordance with the list of the Ministry of Finance of the Russian Federation)
Not more than 50% of assets = real estate
Become a participant of SAR
1
Requirements for foreign companies
- Conducting business activities on the territory of several states, including Russia, through branches, representative offices, a group of persons or a controlled person, or independently, on January 1, 2018 and as of the current date
- Acceptance of commitments on investments in the territory of the Russian Federation in a simple written form (50 million rubles within 6 months in the form of a contribution to the authorized capital or capital investments)
- Submission of an application to conclude an agreement on the performance of activities as a participant in the SAR
- Registration on the territory of a state that is a member of the FATF and/or Moneyval
Cannot become an IC:
- Credit organisations
- Non-credit financial organisations
- Operators of payment systems
- Providers of payment infrastructure services
- Advantages and privileges in the SAR for ICs
Conditions for obtaining IHC status:
- An international company is registered as a result of the re-domiciliation of a foreign organization which was established before January 1, 2018
-
The controlling persons (more than 15%) of the re-domiciled foreign organization obtained such status before 2017 (does not apply to public companies and persons subject to sanctions)
- financial statements of the foreign organization for the last complete financial year before the date of registration
- auditor’s report with a positive conclusion
- information about the controlling persons of an international company (more than 15%)
Circumstances in which the criteria relating to controlling persons do not apply for the purpose of obtaining IHC status:
- Within 15 working days from receiving the IC status, submit to the tax office:
An IC loses its IHC status:
- in the event that the IHC adopts a decision on reorganization in the form of a takeover or merger with a company other than the IC
- if there is a change in the IC’s controlling persons within 1 year (does not apply to public companies and entities under sanctions)
-
if it is deprived of its IC status in accordance with Federal Law No. 290-FZ “On International Companies”
Circumstances in which the criteria relating to controlling persons do not apply for the purpose of obtaining IHC status:
2
Prepare a set of documents
Primary documents
- Application
- Application for state registration of an IC and a document confirming the state registration of a foreign legal entity
- A copy of the charter of a foreign legal entity, as well as the decision of the foreign legal entity to change its governing law and approve the charter of the IC
- Approved charter of the IC and annual financial statements
- Document confirming the authority of the person submitting the application to act without a power of attorney, and the decision on the appointment of the single-person executive body
- Information about the beneficiaries of the foreign legal entity
- Assurance of a foreign legal entity that there are no circumstances preventing its state registration as an IC
- Documents confirming compliance with the requirements for an IC
- Documents required for registration of a share issue by the IC
- Documents confirming the completion of the share listing procedure (only for PJSCs)
© Russian Far East and Arctic Development Corporation, 2023
