The Federal Law No. 27-FZ dated 24/02/2021 amended the Article 21 of the Federal Law "On Foreign Investments in the Russian Federation". This article regulates establishment, opening and termination of branches and representative offices of foreign legal entities in Russia as well as the procedure for their accreditation and maintenance of the relevant State Register.
The Law provides procedures for suspending accreditations, making changes to the Register of accredited branches and representative offices of foreign legal entities' data, as well as termination of accreditation. The latter is possible in cases of failure to submit necessary documents, or submission of documents that do not meet the approved forms, formats and requirements for registration.
The length of the procedure is reduced to 15 working days from the date of submission of relevant documents as well as an application for accreditation. Accreditation of branches (representative offices) operating in the field of civil aviation will take up to 25 working days.
At least one of the following reasons can serve as a term for refusal to accreditate:
- failure to eliminate in time violations that served as a basis for the decision on suspension;
- submission of documents violating deadline set period of 12 months after a decision on establishment;
- submitted constituent or other documents include false data;
- conflicting purposes of establishing (opening) branches (representative offices) or gross violations of the Constitution of the Russian Federation, international treaties and legislation of the Russian Federation;
- threatening the sovereignty, political independence, territorial integrity and national interests of the Russian Federation;
- administrative offenses, administrative penalties in the form of disqualification in relation to the head of the branch (representative office);
- arrears of taxes, fees, insurance premiums, penalties, fines and interests exceeding the sum of 3 thousand rubles on the first day of the month in which the application for accreditation was submitted;
- lack of authority of a federal executive body to make a decision on accreditation.
Refusal to accreditate may be appealed in court or during a pre-trial procedure established by Chapter 2.1 of the Federal Law No. 210-FZ dated 27/07/2010 "On the Organization of the provision of State and Municipal services".
Implementation of accreditation procedure is a subject to a state fee in accordance with the tax legislation.
The Federal Law will enter into force in August 2021, 180 days after the date of its official release.
64 new accredited branches and representative offices of foreign legal entities have been registered in the State Register since the beginning of 2021.
Information about all more than 200 thousand operating and discontinued branches and representative offices of legal entities in Russia including foreign ones is available to the users of the Information and Analytical system Globas.
Information agency Credinform presents a review of the activity trends of the companies being in process of reorganization. More than 6,5 thousands of such enterprises are registered in Russia.
ДThe largest companies (TOP-1000) in terms of annual revenue were selected for the analysis according to the data from the Statistical Register and the Federal Tax Service for the latest available accounting periods (2014 – 2019). The selection of companies and the analysis were based on the data from the Information and Analytical system Globas.
The largest TOP-1000 company in term of net assets is AO ORENBURGNEFT, INN 5612002469, Orenburg region, extraction of petroleum, in process of reorganization by spin-off since 13.01.2021. In 2019, net assets value of the organization amounted to more than 758 billion RUB.
The lowest net assets value among TOP-1000 was recorded for LLC AFIPKA NPZ, INN 7704214548, Krasnodar region, manufacture of petroleum products, in process of reorganization in the form of acquisition of other legal entities since 14.01.2021. In 2019, insufficiency of property of the organization was indicated in negative value of more than -17 billion RUB.
During six-year period, the average net assets values of TOP-1000 have a trend to increase, with the decreasing growth rates (Picture 1).
The shares of TOP-1000 organizations with negative net assets value had positive trend to decrease during last 6 years (Picture 2).
The largest TOP-1000 company in term of net assets is Mobile TeleSystems JSC, INN 7740000076, Moscow, wireless telecommunications activities, in process of reorganization in the form of acquisition of other legal entities since 17.03.2020. In 2019, revenue of the organization amounted to more than 342 billion RUB.
In general, there is a trend to increase in revenue with increasing growth rates (Picture 3).
Profit and loss
The largest company in term of net profit is AO ORENBURGNEFT. The company’s profit exceeded 72 billion RUB in 2019.
During six-year period, the average profit figures have a trend to increase with decreasing growth rates (Picture 4).
During six-year period, the average net profit figures of TOP-1000 companies have a trend to increase with the decreasing average net loss (Picture 5).
Key financial ratios
During six-year period, the average values of the current liquidity ratio of TOP-1000 companies were above the recommended one – from 1,0 to 2,0, with a trend to decrease. (Picture 6).
During six years, the average ROI values had a trend to increase (Picture 7).
During the six-year period, there was a trend to decrease of this ratio (Picture 8).
62% companies of TOP-1000 are registered in the Register of small and medium-sized enterprises of the Federal Tax Service of the Russian Federation. However, their share in total revenue of TOP-1000 amounted 3,7%, which is significantly lower than the average country values in 2018 - 2019 (Picture 9).
Main regions of activity
Companies of TOP-1000 are registered in 80 regions of Russia, and unequally located across the country. Almost 49% of largest by revenue companies consolidate in Moscow and Samara region (Picture 10).
Financial position score
According to the assessment, the financial position of most of TOP-1000 companies is above average (Picture 11).
Complex assessment of activity of the largest companies being in process of reorganization, taking into account the main indexes, financial ratios and indicators, demonstrates the prevalence of positive trends in their activity in 2014 - 2019 (Table 1).
|Trends and evaluation factors||Relative share of factor, %|
|Dynamics of the average net assets value||10|
|Rate of growth (decline) in the average size of net assets||-10|
|Increase / decrease in the share of enterprises with negative values of net assets||10|
|Dynamics of the average revenue||10|
|Rate of growth (decline) in the average size of revenue||10|
|Dynamics of the average profit (loss)||10|
|Rate of growth (decline) in the average size of profit (loss)||-10|
|Growth / decline in average values of companies’ net profit||10|
|Growth / decline in average values of companies’ net loss||10|
|Increase / decrease in average values of current liquidity ratio||-5|
|Increase / decrease in average values of return on investment ratio||10|
|Increase / decrease in average values of asset turnover ratio, times||-10|
|Share of small and medium-sized businesses in terms of revenue being more than 22%||-10|
|Financial position (the largest share)||10|
|Solvency index Globas (the largest share)||10|
|Average value of relative share of factors||2,8|
positive trend (factor), negative trend (factor)