1. Introduction
    1. Political and administrative structure
    2. Legal environment
  2. Common forms of business structures for foreign investors
    1. Main types of structure
    2. Registration, liquidation and reorganisation of business structures
    3. Shareholders’ and participants’ agreements
    4. Strategic industries
  3. Anti-monopoly issues
    1. General legal and regulatory framework
    2. Scope of application of the Competition Law
    3. Anti-competitive practices and restriction of competition
    4. Liability
  4. Tax system
    1. General approach
    2. Corporate taxation
    3. Incentives
    4. Special tax regimes
    5. Taxation of individuals
    6. Double taxation treaties
  5. Customs regulations
    1. Mutual trade between the EEU members
    2. General approach
    3. Trade between EEU and non-EEU countries
  6. Currency control
    1. Foreign currency transactions
    2. Consequences of breach/Penalties
  7. Lending in Russia
    1. Lending documents and governing law
    2. Jurisdiction
    3. International finance transactions and repatriation requirements
    4. Security interests
    5. Recognition of security trusts
    6. Syndicated loans
    7. Enforcement
    8. Suretyships and guarantees
    9. Bankruptcy considerations
    10. Other lending related issues
  8. Employment and migration
    1. Formalising the employment relationship
    2. Managing employment relationships
    3. Terminating an employment agreement
    4. Specifics of employing foreign nationals
  9. Personal data protection
    1. General approach
    2. Scope of the Data Protection Law
    3. Liability
    4. Right to be forgotten
  10. Intellectual property
    1. General approach
    2. Contractual aspects of intellectual property rights
    3. Rights over the results of intellectual activity
    4. Company names, trade names, trademarks and appellations of origin
    5. Intellectual property rights infringements
    6. IP Court
  11. Advertising issues
    1. General approach
    2. Scope of application of the Advertising Law
    3. Violations of the Advertising Law
    4. Liability
  12. Anti-corruption and compliance
    1. General approach
    2. Legal framework
    3. Compliance requirements for companies
    4. Concept of corruption in Russian law
    5. Possible targets of bribery
    6. Liability and penalties for corruption
    7. Example of sector-specific anti-corruption measures
  13. Real estate and construction
    1. Rights to real estate
    2. Real estate transactions
    3. Resolution of real estate disputes
    4. Planning and construction issues
  14. Corporate bankruptcy
    1. Insolvency criteria
    2. Stages of bankruptcy proceedings
  15. Import substitution and production localisation in Russia
    1. Measures affecting goods importation and current import substitution legislation
    2. Localisation incentives
    3. Sector-specific impact of import restrictions and localisation requirements
  16. Banking sector
    1. Legislative and regulatory framework
    2. Licensing and operations
    3. Deposit insurance
    4. The anti-money laundering law
    5. Bank secrecy
    6. FATCA and CRS
  17. Environment, energy efficiency and renewables
    1. Environment
    2. Energy efficiency
    3. Renewables
  18. Infrastructure and public private partnerships
    1. General approach
    2. Key PPP legislation
    3. Russian PPP environment
    4. Financing
    5. Legal issues
    6. Prospects for infrastructure projects
  19. Oil & gas
    1. Legislative framework
    2. Ownership and licensing
    3. Restrictions on foreign investors
    4. Licences
    5. PSAs

General approach

Over the last decade, infrastructure and public private partnership (“PPP”) projects have been of great interest to both the public sector and private investors.

The number of PPP projects in Russia continues to increase consistently, mainly due to regional projects, especially in the communal utilities (including water, wastewater, waste management) and energy sectors. However, since 2019 more and more PPP projects are being implemented in the field of social and health welfare.

As of the end of 2019, there are more than 3,500 PPP projects in Russia in various forms and at different stages of implementation. The total volume of attracted investments is RUB 3.9tn (EUR 55bn ), of which RUB 2.8tn (EUR 40bn) are funds of private investors. In the past year, more than 200 large and medium-sized PPP projects went through the stage of commercial closure. The total amount of contracted investments in PPP projects is estimated at approximately RUB 600bn (EUR 9bn).

High profile projects like the Western High-Speed Diameter (one of the largest PPP projects in Europe), the M4 Toll Road, the Pulkovo Airport, the M-1 Odintsovo By-Pass, the Moscow-Saint Petersburg Toll Road, the Pulkovo airport and the Platov airport projects have been successfully implemented and have already been operating well for a few years.

But the large number of new PPP projects has not come without shortfalls. Many large-scale PPP projects have been postponed, suspended indefinitely, converted into public procurements or even cancelled (e.g. Ufa Eastern exit highway, the Moscow-Saint Petersburg High-Speed Rail project (VSM-1), the Neva Water project, the Orlovsky Tunnel, the Palace of Arts on Vassilevsky Island, the Nadex light train in Saint Petersburg, the Lena River Bridge project, etc.).

In addition, some consumers have complained about the quality of services that they have been receiving under some PPPs. Some granting authorities have also been complaining about the poor quality of PPP applicants, leading them to cancel some of their tenders. It has been reported that the number of lawsuits over PPPs has increased through the years, and this trend is expected to continue in future. As a result, there have been repeated calls from Russian authorities (especially the Federal Anti-monopoly Service and the Ministry of Construction, Housing and Utilities) to create legal mechanisms that would help better control the screening of candidates, the implementation of PPPs and ensure a better quality of services provided.

A new global trend for quality infrastructure investment has emerged. It is materialising in Russia through the development of criteria for evaluating PPP projects. At the end of 2019, VEB.RF and The National Centre for PPP introduced an initial bill for quality infrastructure investment criteria. These criteria should help the local PPP market overcome this issue.

It is also worth mentioning that there is a local dualistic trend in the nature of PPP projects. Most of the high profile deals that involve a significant amount of investment are tailor-made to the needs of a particular project, well prepared by teams of qualified specialists and involve very competent investors, contractors and representatives of authorities. On the other hand, regional and especially municipal projects are much less sophisticated. And this results in lower quality and moderate outcomes of such projects, and also makes the benefits of PPPs less obvious for regional and local authorities.

At the same time, growing volumes of mid-market and small PPP projects, especially in communal services, motivate some investors to develop standard-form documents to increase the average quality of projects and make them a standard financial service ready for replication. Sberbank of Russia is one of the most active players in the area of developing standard solutions. It has many representative offices in almost every region of Russia and would like to use this network to its advantage by enabling regional managers to actively finance PPP projects on the basis of standard documents developed at its headquarters.

There is also a healthy pipeline of infrastructure and PPP ‘mega’ projects in Russia, including the Eastern High-Speed Diameter in Saint Petersburg and the "TsKAD" (Central Ring Road) around Moscow, as well as many regional projects, which shows that the PPP sector is far from stagnant.

The adoption of a new federal law on PPP in July 2015, which had been debated for several years, was a significant milestone in the development of the PPP legal framework in Russia. The first PPP projects within the framework of the federal PPP law were successfully launched in 2018.

Russian federal and regional authorities alike are becoming increasingly engaged in the development of PPPs. At the federal level, Russia’s lower chamber of parliament (the State Duma) operates a PPP council. The Ministry of Economic Development is the government body responsible for PPP policy in Russia. Several federal ministries also manage PPP councils, including the Ministry of Culture, the Ministry of Public Health, the Ministry of Finance and the Ministry of Construction, Housing and Utilities (the latter two Ministries have been especially active in recent years). At the regional level, most regions have adopted their own PPP laws which will remain in effect until 2025, notwithstanding the adoption of the federal PPP law.

The trend over recent years shows that Russian authorities view the PPP sector as a leading tool for infrastructure development and for attracting private (both domestic and foreign) investment. Even though some regional authorities with little experience in the PPPs remain sceptical, the federal Government is actively advocating this instrument, including situations in which the Government declines to provide co-financing for regional infrastructure, unless it is a PPP.


[1] At the notional exchange rate of RUB 70 = EUR 1, as used for convenience throughout this guide. Back ↑

Key contacts

Marquaire-jean-Francois
Jean-Francois Marquaire
Managing Partner