A foreign acquisition in Russia runs into overlapping regimes — government-commission approval, strategic-sector limits, unfriendly-buyer rules. Whether your target deal is even permitted, what approvals it needs, and a realistic timeline are the first questions.
Whether the acquisition is permitted at all, and what approvals it triggers — before you spend on a deal that can't complete.
The commission and strategic-sector approvals navigated, due diligence on the target, and the deal structured to fit the rules.
Acquiring a Russian company as a foreign buyer in 2026 is possible — but the regulatory framework is complex, the process is long, and the rules differ significantly depending on the buyer's jurisdiction. Chinese, Indian, UAE and Turkish companies operate under a fundamentally different framework than European or American buyers. This guide covers the process, Government Commission requirements, valuation, due diligence and tax structuring.
Russian M&A involving foreign buyers is governed by several overlapping regimes:
Federal Law No. 57-FZ — strategic sector restrictions. Foreign buyers acquiring more than certain thresholds in strategic industries (defence, media, natural resources, financial services) require Federal Antimonopoly Service (FAS) approval regardless of the buyer's jurisdiction
Government Commission on Foreign Investment — additional requirement for transactions involving sellers or buyers from unfriendly jurisdictions, or transactions above certain value thresholds
FAS merger control — standard merger notification for transactions above the Russian merger control thresholds (combined revenues exceeding RUB 8bn, target revenues exceeding RUB 400m)
Presidential Decree No. 618 — additional approval required for transactions in specific sectors (banks, insurers, certain infrastructure)
Companies from China, UAE, Turkey, India and other friendly jurisdictions face a more straightforward path than Western buyers. Key features:
No mandatory discount on the purchase price — the transaction price is freely negotiated between buyer and seller
No mandatory Government Commission approval for most transactions (unless strategic sector or high-value thresholds apply)
Standard FAS merger notification where thresholds are met
No restrictions on dividend repatriation post-acquisition — dividends from the acquired Russian company can be paid to the Chinese, UAE, Turkish or Indian buyer at treaty-reduced WHT rates
The majority of Russian M&A deals completed in 2024–2026 involve Chinese and UAE buyers. Chinese buyers benefit from the Russia-China DTT (0% WHT on interest, 6% on royalties, 10% on dividends), established banking corridors and proximity to Russian markets. UAE buyers benefit from the new Russia-UAE treaty (in force January 2026, 10% on all passive income) and the UAE's position as a structuring hub for emerging market investments.
Where the target's current owner is from an unfriendly jurisdiction (EU, US, UK), the seller faces the mandatory 60% discount and 35% exit contribution. This creates an interesting dynamic for buyers: the seller receives significantly less than market value, but the buyer pays a price agreed between the parties (not subject to mandatory discount on the buyer's side). In practice, the discount creates a negotiating gap — the buyer may offer below market value knowing the seller's position, while the seller tries to maximise within the discount constraint.
Pick your situation — we'll tell you where you stand:
The transaction still requires Government Commission approval (because the seller is from an unfriendly jurisdiction), but the approval process focuses on the seller's compliance with the discount and contribution requirements — not on restricting the buyer.
Russian M&A due diligence has specific features that differ from Western practice:
The FTS has a 3-year audit window. Any underpaid taxes from the 3 years preceding the transaction become the buyer's problem after acquisition — the legal entity and its tax liabilities transfer with ownership. Key areas to review: CIT position (correct rate, deductibility of intercompany charges), VAT recovery (particularly from "fly-by-night" counterparties), transfer pricing documentation, and any outstanding FTS correspondence.
Undocumented employment relationships, unlawful dismissals and violations of working time rules create liability that transfers with the company. Review personnel files, payroll records and any labour court proceedings.
Verification of ownership chain through the EGRUL (state company register), confirmation of charter capital payment, review of participants' decisions for major transactions, and confirmation that no encumbrances (pledges, arrests) exist on the LLC interest.
Review of foreign currency transaction history — particularly outbound payments to foreign related parties — for compliance with Russian currency control rules. Violations create liability for the company (not just the prior owner).
The buyer acquires the LLC interest from the seller. The Russian LLC continues as the same legal entity — all contracts, licences, tax liabilities and employment relationships transfer automatically. Simpler to complete but full liability exposure for pre-acquisition issues.
The buyer acquires specific assets from the Russian LLC rather than the LLC itself. Cleaner from a liability perspective — the buyer selects which assets and liabilities to take on. More complex: individual asset transfers, re-registration of contracts, potential VAT on asset transfer. Often more tax-efficient for the buyer where the target has significant intangible value.
That's the first thing to establish — overlapping regimes (commission approval, strategic-sector limits, unfriendly-buyer rules) can restrict or block a foreign acquisition. Confirming feasibility before investing in the deal is what avoids spending on something that can't complete.
Strategic-sector rules add approval requirements and can limit foreign ownership. The deal has to be structured to fit them, and the approval navigated — which affects both feasibility and timeline, so it's central from the start.
Tax and legal diligence on the target — so you buy the position you think you're buying, not hidden liabilities. Combined with the approval analysis, it's what makes the acquisition a considered decision rather than a bet.
This maps the overlapping regimes for a foreign acquisition — Commission approval, strategic-sector limits, unfriendly-buyer rules. Your question is whether your target deal is even permitted, what approvals it needs, and how long a realistic timeline actually is.
Eyeing a Russian acquisition? The approval question decides feasibility — worth resolving before you invest in the deal.
Practical support for international business in Russia.