“Clean as you go” principle and tighten the noose towards dormant companies in Russia
Russian law is not tolerant of sleeping or freezing companies and does not recognize the concept of a dormant company.
At the end of 2024, the Supreme Court of the Russian Federation, in one of the cases [1], formulated the “clean as you go” principle. The Court stated that shareholders and controlling persons who decide to cease business activities must ensure proper liquidation or insolvency proceedings, rather than abandoning the company. Otherwise, shareholders and controlling persons may be held additionally (subsidiarily) liable for the company’s debts, as well as for bad faith conduct during the deregistration or liquidation process.
At the end of 2025, the Supreme Court of the Russian Federation issued its Quarterly Review of judicial practice on subsidiary liability of shareholders of liquidated companies. The Review confirms that exclusion of a company from the state register does not, in itself, release shareholders and controlling persons from subsidiary liability where the company was left with outstanding obligations and without proper completion of liquidation or insolvency procedures.
Also, starting from 1 January 2026, factually dormant companies may become subject to mandatory social insurance contributions, even if their directors do not receive any remuneration or do not have an active employment contract. For 2026, it is assumed that the minimum salary of a director may not be lower than the statutory minimum wage (approximately EUR 300), resulting in monthly contributions of approximately EUR 100, or almost EUR 1,200 annually, for a company with no active employees.
The proposed changes would therefore increase the cost of maintaining factually dormant companies.
Opening a Bank Account in Russia Becomes Easier for Foreign Companies
Russian legislation has introduced a simplified approach to tax registration of foreign companies opening bank accounts in Russia. The changes were enacted by Federal Law No. 416-FZ dated 17 November 2025, which amended Articles 83 and 84 of Part One of the Russian Tax Code[2].
Under the amended rules, a foreign company opening a bank account with a Russian credit institution is no longer required to independently submit an application and supporting documents to the tax authorities for tax registration. Instead, the obligation to submit the relevant information is transferred to the Russian bank opening the account.
The tax authority is required to register the foreign company within five days from the date of receipt of the application from the bank and to issue an extract from the Unified State Register of Taxpayers confirming the tax registration. The extract is provided electronically via the bank.
The new rules are scheduled to enter into force on 1 September 2026.
Termination of Employment Contracts by Mutual Agreement Without Compensation at Risk
Russian courts continue to apply a substantive approach when assessing the validity of termination of employment contracts by mutual agreement. In particular, the absence of compensation or other countervailing benefits for an employee may indicate that such termination does not reflect a genuine and balanced expression of will of both parties.
In a recent case[3], the Supreme Court of the Russian Federation considered a dispute where an employment contract was terminated by mutual agreement on the same day the agreement was proposed, without any severance payment or additional guarantees. The employee subsequently challenged the dismissal, alleging that the agreement had been signed under pressure. The Supreme Court upheld the lower court’s findings that the termination was unlawful.
The Supreme Court emphasized that termination by mutual agreement presupposes a voluntary, informed and coordinated expression of will by both the employer and the employee, as well as the existence of a mutual interest in terminating the employment relationship. The Court noted that an employee’s interest may be evidenced by additional guarantees compensating the negative consequences of job loss. In the absence of such guarantees, and where the employee did not intend to resign, the agreement may be treated as forced.
This approach confirms that courts will assess the substance of termination agreements rather than their formal designation and reinforces the requirement to maintain a balance of interests when terminating employment by mutual agreement.
Foreign Court Orders Continue to Face Enforcement Barriers in Russia
Russian courts continue to apply a restrictive approach to the recognition and enforcement of foreign court orders where such orders interfere with the exercise of jurisdiction by Russian courts or affect the sovereign powers of the Russian Federation.
In November 2025, the Moscow Arbitrazh Court considered the issue of recognition and enforcement of interim orders issued by the Dubai International Financial Centre Court in connection with an investment dispute involving the Russian Federation. The foreign court orders required the Russian Federation to refrain from pursuing proceedings before Russian courts.
The Moscow Arbitrazh Court held[4] that such orders could not be recognized or enforced in Russia, as they constituted impermissible interference with the administration of justice of a sovereign state. In its reasoning, the court referred to fundamental principles of international law, including state sovereignty, non-interference in internal affairs and the principle of sovereign equality of states (par in parem non habet imperium - an equal has no power over an equal).
The court further noted that, under doctrines recognized in common law jurisdictions, including the act of state doctrine, courts should refrain from reviewing or restraining sovereign acts of a foreign state carried out within its own territory. On this basis, the Russian court concluded that the foreign court lacked jurisdiction to issue binding orders in respect of proceedings conducted before Russian courts.
This position confirms the limits of cross-border enforcement of foreign court orders in matters involving sovereign interests and parallel proceedings before Russian courts.
[1] Ruling of the Judicial Chamber for Economic Disputes of the Supreme Court of the Russian Federation dated 27 June 2024 No. 305-ЭС24-809 (case No. А41-76337/2021)
[2] Federal Law No. 416-FZ of 17 November 2025 “On Amendments to Articles 83 and 84 of Part One of the Tax Code of the Russian Federation”
[3] Ruling of the Judicial Chamber for Civil Cases of the Supreme Court of the Russian Federation dated 22 September 2025 No. 5-КГ25-113-К2
[4] Decision of the Moscow Commercial Court A40-92702/2025-56-674 - 21 Nov 2025