The SARs on Russky Island and Oktyabrsky Island allow a foreign organization to change its personal law and continue to operate as an international company. This is a legal migration of an existing business, and not the registration of a new Russian LLC.
- There are two SARs in Russia: Russky Island in the Primorsky Territory and Oktyabrsky Island in the Kaliningrad Region.
- The international company retains legal succession, but must prove its corporate history and comply with the terms of the law.
- International holding company status is a separate tax status and does not arise automatically.
- Before migration, the source jurisdiction, consents, assets, contracts, financing, taxes and banks are verified.
- After registration, real corporate and tax support in Russia is required.
01
What is SAR
SAR is a special territory with a regime for international companies. The district management company interacts with the applicant and government agencies. The term “Russian offshore” is used in business speech, but legally we are talking about a special administrative region and an international company.
02
Who can redomicile
The organizational form and country of initial registration, the conduct of business activities, decisions of authorities, the absence of a prohibition of the original right, investment obligations and a set of corporate documents are checked. The company must prove continuity, ownership and authority.
Sometimes the prior consent of the registrar, lender, licensee or court is required. This stage cannot be replaced by a Russian statement.
03
Redomiciliation procedure
- 01Feasibility
Source rights, assets, contracts, permits and taxes.
- 02Corporate approvals
Resolutions, new articles of association, directors and beneficiaries.
- 03Application
Documents of the management company and the registration authority.
- 04Registration
Status of an international company and Russian register.
- 05Migration
Banks, accounting, contracts, taxes and operational continuity.
04
Corporate Continuity
The purpose of the mechanism is to continue the rights and obligations of the same organization under Russian personal law. However, counterparties and regulators may require notice, consent or confirmation. Change of control, change of domicile and sanctions clauses in contracts are checked separately.
Registers of shareholders, options, pledges, shareholder agreements and powers of signatories are brought into compliance with the new charter and Russian law.
05
International holding company
MHC is a special tax status of an international company if established conditions are met. It may affect the tax treatment of individual dividends, interest and share transactions, but does not constitute a general tax exemption.
Before applying the benefit, the income structure, shares, tenure periods, actual functions, reporting and restrictions on counterparties are checked.
06
Tax and accounting migration
The tax registration date, value of assets and liabilities, historical reporting, CFC, withholding, transfer pricing, VAT and contract status are determined. Russian records and reporting of the original jurisdiction are compared.
Redomiciliation does not eliminate past tax risks and does not cancel obligations in the countries of operation of the group.
07
Banks and settlements
The bank re-establishes legal status, UBO, source of capital, business model, assets, counterparties and currency flows. An existing foreign account may require a KYC update or closure, while a Russian account may require full onboarding.
Pre- and post-migration certificates, legal opinion, decisions, register of owners, group structure, financial statements and explanation of economic purpose.
08
When redomiciliation is not suitable
- 01
Original law does not allow migration or requires inaccessible consent.
- 02
The key license is terminated when the personal law changes.
- 03
Loan agreements allow you to request early repayment.
- 04
The exit tax exceeds the effect of the Russian structure.
- 05
Banks and counterparties are not ready to continue the relationship.
- 06
The group will not be able to meet the requirements once registered.