Client alert: Russian legislative change affecting unwinding shell company structures with Russian elements

Alert: Russian legislative change affecting unwinding shell company structures with Russian elements Effective: January 2025

Recent amendments to Russian legislation have materially altered the framework for unwinding offshore shell company structures that hold Russian assets or rights. Foreign creditors, distressed investors, and asset recovery specialists who have relied on pre-existing structural arrangements should review their positions without delay.

The amended rules introduce new documentary and procedural requirements for transactions involving the transfer or liquidation of corporate structures with Russian legal elements — including subsidiaries, participatory interests, pledges over Russian real property, and receivables governed by Russian law. Structures that previously could be wound down through straightforward cross-border share transfers or voluntary liquidation may now require additional regulatory clearances, substantiation of commercial purpose, or notification to Russian authorities. Timelines for completing such unwind transactions have, in practice, compressed as a result.

Foreign creditors seeking to enforce against Russian assets held through intermediate offshore structures are directly affected. So too are distressed investors managing portfolios that include Russian-law governed receivables, real property rights, or equity interests channelled through intermediate holding vehicles. For creditors already engaged in Russian enforcement proceedings, the interaction between the new requirements and existing insolvency or attachment orders warrants immediate review with Russian-qualified counsel.

1. Identify all structures in your portfolio with Russian asset exposure — subsidiaries, pledges, participatory interests, receivables.
2. Assess whether any planned or ongoing unwind transaction falls within the scope of the amended rules.
3. Engage Russian-qualified counsel before initiating or continuing any unwind steps — procedural missteps under the new framework may prejudice creditor priority or trigger regulatory scrutiny.

For background analysis, see Unwinding Shell Company Structures: Legislative Overview and Practitioner Briefing: Unwinding Shell Structures — Russian Law.

Speak to our team — info@vetrovpartners.com | WhatsApp/Telegram: +7 (983) 510-38-76

Vetrov & Partners is a Russian boutique law firm established in 2009, recognised by Pravo-300 for eight consecutive years. The firm's Asset Tracing & Recovery practice advises foreign creditors and distressed investors on enforcement, asset recovery, and structural unwinding under Russian law. Direct partner involvement on every matter. Enquiries: info@vetrovpartners.com | WhatsApp / Telegram: +7 (983) 510-38-76 | t.me/vitvetcom

This alert is for informational purposes only and does not constitute legal advice. Vetrov & Partners is a Russian-qualified law firm. Contact info@vetrovpartners.com for advice on your specific situation.

— Elizaveta Razina Senior Lawyer, Practice Lead — IP Enforcement, Vetrov & Partners vetrovpartners.com/razina/