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CMS Client Alert | December 2013 | Corporate

Changes to regulation of shareholders agreements in the context of the Russian Civil Code reform – Will they make a difference?

12/12/2013

Although the tendency has been for joint investments in Russian companies to be structured through offshore entities, there are many occasions when this is not possible or appropriate. Agreements regulating direct shareholdings in Russian entities are therefore regularly used in Russia. However, one of the principal shortcomings of Russian law in the context of shareholders agreements was the fact that it seemed foreign law could not be chosen by the parties to regulate such an agreement in relation to a company incorporated in Russia, even where one or more shareholders was foreign. Regardless of whether there are actual defects implicit in a Russian law-governed shareholders agreement, adapting commonly understood English model documents to Russian law has not been easy; the resulting documentation is lacking in familiarity and has not generally been preferred (even by Russian clients).

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CMS Client Alert | December 2013 | Corporate
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