The government submitted to the Duma a draft law on investment

© RIA Novosti / Vladimir Fedorenkova in photobacteria meeting of the state Duma of the Russian Federation. Archival photoThe government submitted to the Duma a draft law on investment© RIA Novosti / Vladimir Fedorenkova the image Bank

The government of the Russian Federation in the state Duma introduced a bill aimed to prevent the possibility of Russian investors unnecessarily of the benefits that the legislation provides for foreign investors, it follows from the database of the lower house of Parliament.

«The proposed changes to the legislation will contribute to the prevention of capital outflow from the Russian Federation, as well as identifying the actual data on the attraction of foreign investments in the Russian Federation», — said the government.

The main objectives of the draft law called «establishment of an effective mechanism of restraint for Russian legal entities and citizens undue advantages provided to foreign investors and improve standards of investment legislation», says the Cabinet.

In order to be advised of the concept of «foreign investor» and «foreign investment» and introduced the concept of «controlled person» as used in the law «On foreign investments in RF».

While the concept of «foreign investor» excludes foreign citizens who have Russian citizenship, and foreign legal persons or organizations not being legal entities under direct or indirect control of the legal entities or citizens of the Russian Federation (controlled).

Under foreign investment are encouraged to understand and self-direct investment by a foreign investor of its funds, which should allow to exclude cases of investment activities through a trust or other fiduciary institutions.

Controlled entity

A controlled entity would be deemed a foreign legal person or organization not being a legal entity, under the control of the citizen of the Russian Federation and (or) Russian legal entities — controlling person, in the presence of one of more characteristics.

First, the controlling person has the right to directly or indirectly dispose of more than 50% of the voting shares (shares). Second, the controlling person acquired the right or authority to define acceptable controlled entity decisions, including concerning the conditions of doing business.

Third, the controlling person can appoint a sole Executive body, more than half of the composition of the collegial Executive body, elect more than half of Directors (Supervisory Council) or other collegial management body of the controlled entity.

Fourth, the controlling party shall have the right, directly or indirectly, to dispose of less than 50% of the voting shares (shares) provided that the ratio of the number of votes represented by the shares (stakes) and the number of votes represented by the voting shares (stakes) of other shareholders, is so that it gives the possibility of controlling entity to determine accept controlled entity decisions.

Fifth, the controlling person exercise the powers of the managing company of the controlled person.

In connection with the clarification of the definition of foreign investor changes to the law «On the procedure for foreign investments in economic societies having strategic value for ensuring of national defense and state security».

In addition, the non-proliferation of the concept of «foreign investor» for the activities associated with subsoil of Federal importance for exploration and production of minerals, the corresponding change is made to the law «On subsoil».