Real estate sale and purchase transactions between Russian persons and foreign persons affiliated with “unfriendly” states are now subject to government approval

From 2 March 2022, Russia launched particular guidelines for actual property transactions with international authorized entities and people related to international states that adopted measures concentrating on Russian authorized entities and people (“Overseas States“):

1. Russian residents might perform transactions ensuing within the change of possession of actual property property with (a) the counterparties from the Overseas States and (b) with individuals, together with Russian and non-Russian authorized entities, managed by such counterparties, solely upon acquiring a allow issued by the Governmental Fee for Management over Overseas Investments within the Russian Federation. The process for acquiring such allow is to be developed by the Russian authorities inside 5 days.
2. The identical regime applies to transactions between Russian residents and international individuals not affiliated with the Overseas States the place such nonaffiliated international individuals acquired actual property property from the counterparties from the Overseas States after 22 February 2022.

The restrictions don’t apply to transactions with Russian state our bodies and the Russian Central Financial institution.

The actual property property usually are not restricted to these situated inside Russia. In 2021, Russia formally included the US and the Czech Republic within the record of “unfriendly” states. Nevertheless, by intent, the brand new guidelines seem to focus on all states which have taken or will take measures in opposition to Russia, even when they aren’t expressly included within the formal record of “unfriendly” states.

Key takeaways

Actual property sale and buy transactions between Russian individuals and international individuals at the moment are topic to particular permits. The process for the issuance of such permits might be developed inside 5 days.