As known, the quality of governance is one of the key factors of the successful development of the economy. The priorities of lawmaking in this direction are to limit the influence of the state in the economic sphere, as well as to reduce administrative barriers for business.

The Russian civil legislation, being in the constant development, continues to make tracks in the direction of reducing of the excessive state regulation. Namely in this direction the Federal Law from 29.06.2015 №209-FZ "On making of amendments to certain legislative acts of the Russian Federation regarding the introduction of the potential for use of standard charters by legal entities" was adopted and signed by the President of the Russian Federation on the 29th of June 2015. 

The law changes a number of positions of the first chapter of the Civil Code of the Russian Federation and the Federal laws, which relate to the articles of association of legal entities. 

It is possible to summarize 25 amendments to the above mentioned legal documents as follows:

• standard charter does not provide the data on names, deployment and sizes of the authorized capital of legal entities. The obligation to approve it by founders (participants) of companies falls down, and this function will be assigned to the authorized state body; 
• notifications about the operation on the basis of the standard charter are to be sent to the authority of state registration of legal entities (in the present time - to the Federal Tax Service of the RF and its local subdivisions) with relevant reflection of this in the Unified state register of legal entities (EGRUL). That is, there will be no need to send the charter to a registering authority, both in electronic and paper form;
• for limited liability companies it will be retained the right to continue working under individual charters, executed in paper form. Therefore, two types of charters are provided for legal persons: a standard one adopted by the authorized government body and an individual one approved by company’s founders (participants).

The law in whole enters into force from the 29th of December 2015, and on individual items – from the 1st of January 2016. Up to this moment it must be clarified the public bodies, being authorized to approve the standard charters, and the forms of standard charters.

According to experts, such innovations can help reduce the time of registration of legal entities and the costs associated with it, both on the part of entrepreneurs and the state; simplify the procedure of drawing up and legal implementation of charter; reduce the efforts for verifying of the charter documents on the part of contractors. Looking forward, it will certainly have a positive impact on the development of business in general and small business in particular.

Discussions concerning the introduction of Islamic Banking in Russia were kick-started by two recent developments: There was an agreement on collaboration between the Tatarstan Republic and the largest Russian bank – Sberbank. At the same time the Russian Direct Investment Fund and the Saudi Sovereign Public Investment Fund have formed a partnership. The fund was set up by the Saudi partner who is ready to invest USD 10 billion in the Russian projects in agriculture, real estate, medicine, retail and logistics industry sectors within 4-5 years.

These developments have prompted the examination of the practicality of the development of the Islamic financing in Russia. This process is now well underway.

The mechanisms of the Islamic banking implementation in Russia are now discussed at the legislative level: members of the working team by the State Duma’s Committee on financial markets featuring representatives of the Central Bank of Russia, Ministry of Finance, Ministry of Economic Development have been discussing changes in the law “About banks and banking activities”, particularly the offer to approve the banks to carry out trade activity.

• Ban on the interest based transactions and transactions under conditions of uncertainty;
• Ban to finance the separate business activities as defined by the Sharia law, for example gaming and entertainment business, production of pork, alcoholic drinks and tobacco etc.;
• Sharing of profit/loss risk in transactions between bank and client;
• Executing of financial transactions and operations with real assets and their compulsory identification.

On the one hand, such characteristics might work towards investments growth, minimize risks reduction and enhance the responsibility of investors and resources consumers. On the other hand, it might lower the range of services offered on the credit market.

Nevertheless, the issue of implementation of the Islamic banking in Russia remains to a large extent controversial because of a multi-confessional population structure in the country and risks to place new banking services in the already mature credit market.

Background: The Islamic financial system started its development in 1960s by opening of the small Egyptian saving bank “Mit Ghamr”. The system has grown by now to a world-class standard one having the total assets of over USD 250 billion, with a growth of over 15% annually and the well-developed infrastructure of banks, insurance companies, mutual investment funds and international financial institutions in 75 countries.

Economic efficiency of the richest countries such as Saudi Arabia, Qatar, Bahrein etc., speaks for the high effectiveness of the Islamic banking and encourages its implementation in Russia particularly in the current investment slump.

There is already a positive experience of the Islamic banking in the neighbor country Kazakhstan – member of the EAEU Customs Union (Russia, Kazakhstan, Belarus, Armenia, Kyrgyzstan): the Islamic Bank “Al Hilal Bank Kazakhstan JSC” (with the head office in Almaty, 2 branches in Astana and Shymkent) successfully operates based on the Agreement “On the opening of the Islamic bank in the Republic of Kazakhstan” signed between the governments of Kazakhstan and the United Arab Emirates.

According to the Central Bank of Russia data as of August, 2015, there are 1035 active banking and non-banking credit institutions in Russia.

More information about the Russian credit entities is to be obtained on-line from the Information and Analytical System Globas-i® developed by Credinform (Russia).