The state Duma adopted a law banning government support of offshore companies

The state Duma adopted a law banning government support of offshore companies

Offshore companies will not be able to act as principals or beneficiaries for government guarantees. Russian legal entities with the share of such companies in excess of 50% cannot be principals under such guarantees.

MOSCOW, 29 Jan. The state Duma passed a law prohibiting the granting of state support in the form of grants and budgetary investments from the budget system of the Russian Federation, and also in the form of state (municipal) guarantees to foreign legal entities, including offshore companies.

Offshore companies and Russian legal entities in authorized (share) capital of which share of participation of such companies in the aggregate exceed 50%, may not be a recipient of subsidies and public investment.

The offshore company cannot be the principals or beneficiaries by state or municipal guarantees, and Russian legal entities with the share of these companies over 50% of principals under such guarantees. There is still a possibility of providing state guarantees of the Russian Federation in order to support the export of industrial products (goods, works, services), as well as in cases of granting state or municipal guarantees to secure the obligations, on which it is impossible to identify the beneficiary at the moment of granting the guarantee, or the beneficiaries is uncertain circle of persons.

A mandatory condition to be included in the contracts (agreements) on providing subsidies to legal entities (except subsidies to state or municipal institutions, as well as investment), is the prohibition of acquisition at the expense of funds of foreign currency. An exception is made for transactions undertaken in accordance with the currency legislation of the Russian Federation in the procurement (supply) high-tech imported equipment, raw materials and components.

The state Corporation “Rosatom” and “Roscosmos” has been authorized to enter into contracts in connection with the provision of budget investments to legal entities that are not public (municipal) institutions and unitary enterprises, participation in the property of such legal entities. Chief administrators of sources of financing of deficit of the budget granted budget authority for the drafting of feasibility of budget allocations.