Various amendments to the Russian legislation entered into force on January 1, 2016. The key ones are outlined below.

1. Corporate Law

• Practically all transactions involving shares in LLCs will have to be notarised.

• Sales of shares will have to be conducted via a uniform notarised contract. To facilitate the process, the notary will now send the application to register the changes in the company’s ownership structure to the tax authorities in electronic form on his/her own.

• The incorporation procedure will be simplified. Companies will be able to use a model charter instead of drafting a “customised” one (shareholders can opt for this by adopting a relevant resolution).

2. Registration of Legal Entities

• Tax authorities will exercise more control over the registration process. They will be able to verify the information submitted to the Register (EGRYUL) by requesting documents, carrying out inspections, and marking information in the Register as false if it is found to be inaccurate and the company fails to correct it.

• Registration with EGRYUL of corporate information can now be denied on more legal grounds. Authorities will be able to refuse to register the company’s liquidation or reorganisation if the liquidation or reorganisation procedure was violated. Registration of the fact of replacement of a company’s General Director or a shareholder may be denied if the individual’s managerial actions caused the company to suffer adverse consequences within 3 years prior to the application (e.g., resulted in the company’s failure to settle debts to the State).

• The Register will reflect the company’s decision to change its address. Such registration will comprise two steps: registration of the decision to change the address; and registration of the new address itself within 20 days thereafter, based on a separate application supported by documents confirming the right to use the premises.

3. Agency Labor

• Only accredited employment agencies will be able to provide personnel to other companies for full time work under their immediate control and direction (i.e., for agency labor or “outstaffing”). Outsourcing (providing services to another company) should not be affected by the new rules.

• Other legal entities will be able to provide their employees only to affiliated companies or their partners under shareholder agreements. 

• The maximum duration and conditions of agency labor, as well as employee guarantees are established. The leased personnel must enjoy the same working conditions as the client’s employees. 

4. Administrative Law

• Several amendments aimed at increasing payment discipline in the energy industry (electricity, heating, etc.) will enter into force, such as new administrative fines, e.g. for violating the new obligation to secure overdue payments for energy, while the existing fines are increased.

5. Miscellaneous

• The Bank of Russia will no longer separately set the refinancing rate. It will now be equal to the key interest rate, which will affect the calculation of various payments (such as statutory penalties). 

• Special tax regimes are established for residents of special economic zones in Vladivostok (no land and property taxes, reduced social payments, etc.) and the Magadan Oblast (no corporate income tax, reduced mineral extraction taxes, etc.).