RUSSIA UPDATE: new law aims to force out “unfriendly” foreign investors

A new Russian law permits excluding investors from “unfriendly” States from holding shares in significant Russian companies by transferring their interests to Russian beneficiaries. As reported previously, the Russian State is stepping up countersanctions against foreign investors from so-called “unfriendly” countries that have sanctioned Russia over the invasion of Ukraine, including the EU, the USA, the UK (including British Overseas Territories and Crown Dependencies), Canada, Australia, Switzerland, Japan, South Korea, Singapore and Taiwan.

Investors from these States have faced a trilemma: whether to sell their business in Russia and exit the country, gradually wind down their operations, or “stick it out”. However, recent legislation has now heightened these challenges.

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