The russian authorities are preparing to allow the creation of "matryoshka companies", which were banned in 1995, to circumvent sanctions.
The russian Ministry of Justice has drafted a bill and sent it to the government for approval, russian media report, citing the document.
The structure of such companies implies that company A (a joint-stock company or a limited liability company) can act as the sole owner of company B, which in turn owns 100% of company C.
The bill lists a number of conditions under which the authorities will allow such structures to operate. One of the restrictions is that "matryoshka companies" cannot be controlled by a foreign legal entity.
In addition, the 100% owner will be held liable for the debts of the company. Besides, the same person cannot be the head of different companies in the structure. Government agencies and local governments will be prohibited from participating in such structures.
In 1995, "matryoshka firms" were banned in russia to prevent abuses by parent companies and their evasion of responsibility.
The russian Union of Industrialists and Entrepreneurs (RSPP) requested that the ban be lifted in May 2022, arguing that it was outdated. The russian Ministry of Economic Development supported this idea.
"Over the past year, due to external pressure, the country has faced a difficult economic situation. First and foremost, it affects businesses that have to cope with sanctions restrictions," the ministry said.
Background. As a reminder, Germany has noticed that russia's neighbouring countries are buying many times more German goods, including high-tech and industrial goods of all kinds. Therefore, Germany suspects that these goods are being sent to russia to circumvent sanctions.