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Flag of Russia
System of government: federal semi-presidential republic
Population: 142.5 million
Currency: Russian rouble (RUB)
FX regime: controlled floating
GDP: $2.06 trillion (2014 est)
IGTA member: no
FATF member: yes
Other professional financial/banking associations: The Russian Association of Corporate Treasurers was created in early 2013.

Financial regulatory framework

Bank supervision

The Central Bank of Russia (CBR), Russia’s central bank, sets prudential standards for banks as their main licensing body. Since 2008, the accounting cycle has been brought closer to IAS requirements, but most local companies are still using local accounting standards – for tax purposes – and so such reporting cannot serve as a basis for managerial decision-making. The banking system adopted the Basel II accord principles in 2009. All investment companies are licensed and controlled by the Federal Financial Markets Service (FSFR). All public limited companies should register their shares issues with the FSFR. The FSFR also requires all public companies to use and publish financial reporting made in accordance with IAS on a regular basis.

Exchange controls

Residents require authorisation from the FSFR before they can issue/sell securities abroad. CBR authorisation is required in order for non-resident entities to acquire more than 10% of a resident credit institution. Resident banks that acquire capital from Belarus must notify the CBR. Resident banks establishing subsidiaries abroad require CBR authorisation. Subsidiaries can only be established in countries that are members of the Financial Action Task Force (FATF). Most export proceeds must be credited to the residents’ foreign currency accounts.

Restrictions on foreign investment/ownership

There are no substantial restrictions. Foreign investors are usually only permitted to purchase up to 49% of a strategically important domestic company or project. Non-residents require CBR authorisation to acquire over 10% of a resident bank. However, to set up a bank with foreign capital requires higher charter capital; currently a minimum of €5,000,000. The proportion of foreign capital in the banking system as a whole cannot exceed 25%. Over recent years, the number of foreign banks has increased dramatically. Legislation on non-government organisations (NGOs) has drastically limited the number of allowed activities. Currently it is very difficult to set up a NGO, and registration applications take many weeks to proceed.

Taxation framework

Corporate income tax

The maximum general corporate profits tax rate is 20%. This comprises a federal tax of 2% and a regional tax of 18% that may be reduced to 13.5%.

A rate of 13% is applied to dividends received by Russian corporate shareholders from Russian and foreign companies (in certain cases a 0% rate applies).

Certain income received by foreign companies from sources in Russia not associated with activity through a permanent establishment (PE) is subject to withholding tax at source at a rate of up to 20%. Tax exemptions or reductions may be available under a double tax treaty.

Capital gains tax

Taxed as income. In terms of securities and real estate, only realised gain is taxed.

Taxation on dividends

There is a withholding tax of 13% for dividends paid to resident companies and of 15% for dividends paid between resident and non-resident companies, subject to tax treaties.

Taxation on interest

There is a withholding tax of 20% for non-resident companies, subject to tax treaties. Withholding tax of 15% applies, in certain instances, for resident companies.

Thin capitalisation

The thin capitalisation rules restrict the deductibility of interest on loans to related legal entities and apply where the lender is: A foreign company that owns directly or indirectly more than 20% of the charter capital of a Russian company; or a Russian company that is an affiliate of such a foreign company; or any company to which such Russian-affiliated or foreign company itself undertakes to act as a guarantor or to secure in any other way the discharge of the loan by the Russian borrower. If the loan that is subject to control exceeds more than three times (12.5 times for banks and companies exclusively carrying out leasing activity) the capital of the Russian borrower, interest relating to the excess debt will not be deductible and will be treated as a dividend.

Transfer pricing

Transfer pricing rules substantially reflect the OECD model rules.

The rules apply to cross-border transactions with both related parties, to those with unrelated parties in relation to goods traded on commodity markets, and to transactions with residents of certain “low tax” jurisdictions if the transaction amount exceeds RUB 60m. The rules also apply to domestic transactions between two related parties which exceed RUB 1bn, as well as certain other domestic related party transactions.

The law specifies 11 categories of related party, with ownership of more than 25% being one of the main criteria, but a court can also recognise parties as being related on grounds other than those specified.

The law provides that the “comparable uncontrolled price” method is normally the primary method applicable, but the resale-minus, cost-plus, comparable profitability and profit-split methods are also recognised.

Controlled transactions must be notified to the tax authorities each year, and taxpayers must prepare detailed transfer pricing documentation. Advance pricing agreements are possible. The new law does not provide specific rules that should be applied to a foreign legal entity’s PE in Russia or a Russian legal entity’s PE abroad, including the allocation of income and expenses between the PE and its head office. Taxable income is determined taking into account the specific functions performed, risks borne and assets used by the PE. The rules include detailed documentation requirements and allow for the possibility of obtaining an advance pricing agreement.

Indirect taxes

VAT is charged at the rate of 18% for most goods or services.

Tax information provided by Deloitte Touche Tohmatsu and Deloitte Highlight 2015 (

Banking service provision

Major domestic banks include Sberbank, VTB Bank, Vnesheconomank, Gazprombank and the Russian Agricultural Bank. All are state-owned. Sberbank enjoys some 70% of the total deposits of private individuals in the country. The largest privately owned banks are Alfa Bank, Otkritie Financial Corporation Bank, UniCredit Bank and Rosbank (owned by France’s Société Générale).

Clearing and payment systems

The CBR acts as the main settlement centre in Russia. All banks have correspondent accounts with the CBR. The CBR operates the BESP RTGS system for large-value and urgent transfers and an automated net settlement system for non-urgent electronic funds transfers and paper-based items.

The CBR’s electronic net settlement system has 74 regional branches acting as processing centres across nine time zones. Payments processed on an intra-regional basis are usually settled the same day. Payments processed on an inter-regional basis are typically settled within two working days.

Commercial banks also have a comprehensive network of correspondent accounts with each other, which allows for faster settlement. The largest settlement bank is Sberbank, due to nationwide branch network.

The Russian post service is now a full member of the intra-country payment system for individuals, and many banks, utilities and catalogue shops use it to receive payments from individuals.

Payment instruments

Cash remains the most popular and widespread means of payment in Russia. Debit and credit cards are gaining in popularity. The main cashless payment instrument is the credit transfer, which can be paper-based or automated. An increasing majority of credit transfers are electronic. There are a number of transfer systems for individuals, such as Western Union, Anelik, Unistream and others.

Lockboxes are popular between individuals as a means of payment for expensive items such as an apartment or a car; the asset transfer takes place within the bank. Lockboxes are widespread in major cities.

Personal or company cheques do not exist. Instead, firms and individuals use liquid promissory notes as a means of payment (eg notes on Sberbank). Some banks have tried to introduce their own cheques as a means of payment but they are not popular and are not widely accepted.

Cash and bank account management

Account availability

Residents and non-residents can open fully convertible domestic currency accounts as well as foreign currency accounts both within Russia and abroad. Residents must advise the relevant tax authority when opening a foreign currency account abroad.

Money laundering

Russia has implemented anti-money laundering legislation (Law RF 115-FZ on Combating Legalisation (Laundering) of Criminally Gained Income and Financing of Terrorism 2002 most recently amended in 2013; The Federal Law on the Introduction of Amendments and Addenda to the Federal Law on Counteracting the Legalisation (Laundering) of Income Obtained by Criminal Means 2003, last amended 2008; Federal Law 35 of 2006; Federal Laws 241-FZ and 121-FZ of 2009; and Article 174 of the Criminal Code).

A Financial Action Task Force (FATF) member, it observes most of the FATF-49 standards. Russia is also a member of the Council of Europe MONEYVAL Select Committee and the Eurasian Regional Group on Combating Money Laundering and Financing of Terrorism (EAG).

Russia has established a financial intelligence unit, the Federal Financial Monitoring Service (Rosfinmonitoring), which is a member of the Egmont Group.

Supplied by BCL Burton Copeland ( Data as at January 2015.

Cash concentration and pooling

There is some availability of cash concentration and notional pooling services, but only involving domestic currency accounts. Exchange controls make cross-border services very difficult. Cross-border notional cash pooling is not available. As there is no clear legal framework, any cash management solution is risky.

Liquidity management

Short-term investments

  • Interest can be earned on current and deposit accounts.
  • Time deposits are a common method of short-term investment in Russia. Time deposits can be held in domestic currency or a major foreign currency and usually have maturities of one, three, six and 12 months.
  • Certificates of deposit (CDs) are offered by Sberbank and Russia’s other leading commercial banks but are little used. Maturities can range from one day to over a year. The majority of CDs have maturities of one to six months.
  • GKOs are zero-coupon government bonds issued in units of RUB 1,000 via monthly auctions held by the CBR. GKOs have maturities ranging up to one year.
  • Veksels are short-term, zero-coupon promissory notes offered by companies. Veksels usually have maturities of one, three and six months.
  • Repurchase agreements (repos) are available on government bonds and corporate securities. Repos between dealers on government bonds usually have maturities of one, two, seven and 14 days. Direct repos on government bonds have maturities of one to seven days. Repos on corporate securities have maturities ranging up to three months.

Benchmark rates

The CBR only provides an indicative refinancing rate – its discount system is non-functioning. Therefore this rate is a weak indicator of the prevailing base interest rate on the market. However, the banks use it to adjust their base rates. As of 28 May 2015, the rate stands at 8.25%.

Corporate finance

A local debt capital market is developing enabling companies to fund themselves. However, its access remains limited to large companies for tenors up to five years. Russian SMEs continue to experience liquidity problems. Availability of short-term funding by the use of an overdraft is still low. Loan facilities are not easily obtainable due to the absence of credit ratings and require good collateral and other legal obligations. Many firms prefer to offer a substantive discount for an advance payment. Firms dealing in the Russian market should anticipate a longer settlement period than usually accepted in more developed economies.


Official Government Portal

Ministry of Finance

Ministry of Economic Development

Central Bank of the Russian Federation

Federal State Statistics Service

Moscow Exchange

Saint Petersburg Stock Exchange

Russian Chamber of Commerce and Industry

Association of Russian Banks

Association of Regional Banks of Russia

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