Adoption of Presidential Decree on additional guarantees for foreign investors

On 1 July 2025, the President of the Russian Federation signed Decree No. 436 “On Additional Guarantees for Rights of Foreign Investors” (“Decree”), allowing foreign investors to invest in the Russian Federation without complying certain counter-sanction restrictions.

Essence of the Decree

The new Decree creates a special regime for foreign investors, allowing them to invest funds in Russian securities without taking into account the restrictions established by a number of Decrees of the President of the Russian Federation (“Counter-Sanction Restrictions”).

The established investment regime (which does not require compliance with Counter-Sanction Restrictions) applies to two categories of foreign investors (“Foreign Investors”):

persons from unfriendly statesPersons from unfriendly states are understood to mean “foreign persons associated with foreign states that commit unfriendly acts against the Russian Federation, Russian legal entities and individuals (including if such foreign persons have the citizenship of such states, or their place of registration, place of primary business activity or place of primary profit are such states) or persons who are under the control of such foreign persons, regardless of the place of their registration (unless the place of their registration is the Russian Federation) or the place where they predominantly conduct their business activities” (sub-clause b of clause 2 of the Decree). making investments in the Russian Federation (including with the involvement of depositories, brokers, agents or other persons from “friendly” jurisdictions); and
foreign persons from “friendly” jurisdictions investing in the Russian Federation with the involvement of depositories, brokers, agents or other persons from “friendly” jurisdictions.

The list of transactions (operations) that Foreign Investors may carry out without having to comply with the Counter-Sanction Restrictions is limited, mainly to transactions (operations) with Russian securities on an organised trading facility (stock exchange), as described in more detail in the “Permitted Transactions” section below. The rules on separate accounting established by Decree of the President of the Russian Federation No. 138 “On additional temporary measures of an economic nature related to the circulation of securities” dated 3 March 2023 will not apply to securities acquired under such Permitted Transactions either.

“In”-type accounts

For the purpose of making investments in the Russian Federation, Foreign Investors will be provided with special “In”-type accounts designed for the acquisition of Russian securities. The Decree provides that Foreign Investors will be able to credit roubles and foreign currency to such accounts.

Special “In”-type accounts will be used to account for funds and Russian securities (shares of a Russian joint stock company, federal loan bonds, Russian bonds with centralised accounting in a Russian depository, units of a Russian mutual investment fund) acquired by Foreign Investors in accordance with the provisions of the Decree.

“In”-type accounts (including securities “In”-type accounts (personal “In”-type accounts)) are opened by banks, brokers and depositories. Funds can be credited to such accounts from accounts in foreign banks or other foreign financial market organisations.

The Decree establishes that Foreign Investors have the right to transfer, including outside the Russian Federation:

funds in roubles credited to “In”-type accounts intended for making investments or received from such investments; and
foreign currency funds credited to “In”-type accounts and intended for making investments, and currency valuables received from such investments.

Investments under the Decree may not be made using funds credited to other bank accounts.

For foreign depositories that account for rights to securities, the Russian depository opens foreign nominal holder securities “In”-type accounts. “C”-type accounts are not opened for such entities.

Permitted Transactions

According to the Decree, Counter-Sanction Restrictions do not apply to a limited number of transactions (operations) with Foreign Investors (“Permitted Transactions”). Permitted Transactions include:

transactions (operations) concluded on an organised trading facility (stock exchange) on the basis of applications addressed to an unlimited number of trading participants, by a professional participant in the securities market acting in the interests of a Foreign Investor:

acquisition of Russian securities during their initial public offering or on an organised trading facility on the basis of applications addressed to an unlimited number of trading participants;
disposition on an organised trading facility of Russian securities acquired in accordance with paragraph 1 above;
conclusion of agreements that are derivative financial instruments and fulfilment of obligations thereunder;

making payments on Russian securities acquired in accordance with paragraph 1 above; and
placement of funds on deposits in a Russian bank by a Foreign Investor and their return.

Separate accounting

With respect to Permitted Transactions with Russian securities, the Decree eliminates the requirement for separate accounting established by clause 7 of Decree of the President of the Russian Federation No. 138 “On additional temporary measures of an economic nature related to the circulation of securities” dated 3 March 2023. Rules on separate accounting of securities will not apply in connection with:

the acquisition and disposition of Russian securities on an organised trading facility;
operations on crediting and debiting Russian securities;
performance of further transactions with Russian securities on an organised trading facility on the basis of applications addressed to an unlimited number of trading participants.

At the same time, requirements for separate accounting are introduced with respect to the property, claims and obligations of a Foreign Investor (a person acting in a Foreign Investor’s interests), acquired as a result of investments within the framework of the Decree.

Use of “In”-type accounts

The Decree establishes that settlements with Foreign Investors must be carried out via “In” accounts. The use of an “In”-type account is mandatory for the following obligations to a Foreign Investor:

for transactions (operations) stipulated by the Decree (including monetary obligations and obligations to transfer Russian securities);
for making payments on Russian securities acquired as a result of investments within the framework of the Decree;
for agreements that are derivative financial instruments; and
for deposits.

The “In”-type account regime will be later established by the Board of Directors of the Bank of Russia. At present, it follows from the provisions of the Decree that the following operations are permissible with respect to “In”-type accounts:

foreign exchange transactions on “In”-type accounts;
transfers of funds and Russian securities between “In”-type accounts when performing transactions (operations) stipulated by the Decree;
operations on securities “In”-type accounts (personal “In”-type accounts) to credit and debit Russian securities:

when performing transactions (operations) stipulated by the Decree;
when they are redeemed, converted (exchanged), repurchased, acquired in cases stipulated by the Law on Joint Stock CompaniesFederal Law No. 208-FZ “On Joint Stock Companies” dated 26 December 1995 and the Law on Investment FundsFederal Law No. 156-FZ “On Investment Funds” dated 29 November 2001;
when they are acquired by the issuer, when redeemed in cases stipulated by the Law on the Securities MarketFederal Law No. 39-FZ “On the Securities Market” dated 22 April 1996.

We understand that the final list of grounds for crediting (or debiting) funds and Russian securities to (or from) “In”-type accounts may also include other operations.

In accordance with clause 1 of the Decree, the following Decrees shall not apply to transactions with foreign investors:

Decree of the President of the Russian Federation No. 81 “On additional temporary measures of an economic nature to ensure the financial stability of the Russian Federation” dated 1 March 2022;
Decree of the President of the Russian Federation No. 95 “On the temporary procedure for performing obligations to certain foreign creditors” dated 5 March 2022;
Decree of the President of the Russian Federation No. 126 “On additional temporary measures of an economic nature to ensure the financial stability of the Russian Federation in the sphere of currency regulation” dated 18 March 2022;
Decree of the President of the Russian Federation No. 254 “On the temporary procedure for performing financial obligations in the area of corporate relations owed to certain foreign creditors” dated 4 May 2022;
Decree of the President of the Russian Federation No. 520 “On the application of special economic measures in the financial and fuel and energy sectors in connection with the unfriendly actions of certain foreign states and international organisations” dated 5 August 2022; (Legal updates related to the application of Decree 520 in more detail at the following links: 1; 2; 3; 4);
Decree of the President of the Russian Federation No. 618 “On the special procedure for carrying out (performing) certain types of transactions (operations) between certain entities” dated 8 September 2022 (Legal update on Decree 618 in more detail is available here);
Decree of the President of the Russian Federation No. 737 “On certain issues of carrying out (performing) certain types of transactions (operations)” dated 15 October 2022; and
Decree of the President of the Russian Federation No. 138 “On additional temporary measures of an economic nature related to the circulation of securities” dated 3 March 2023 (Legal update on Decree 138 in more detail is available here).