Since 2022 Russian residents have faced restrictions on paying for shares or capital contributions in foreign companies. As reported, from 1 July 2026 transactions with one foreign counterparty can be made without individual Bank of Russia approval up to RUB 30 million in aggregate (counted from 1 April 2024), and individual approval is needed above that. The parent should also deal with currency control and reporting duties, controlled foreign company rules, foreign account notifications and tax on Indian income. These are matters of Russian law, which can change quickly: take current advice from Russian counsel before committing funds.
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Key facts
| Share investment abroad | Restricted; Bank of Russia approval above a threshold (RUB 30 million aggregate per counterparty, reported effective 1 July 2026) |
|---|---|
| Aggregation | Transactions with the same non-resident counted from 1 April 2024 |
| Currency control | Rules on payments in foreign currency, notifications and repatriation of export proceeds |
| Reporting | Notification of foreign accounts and participation in foreign entities to the Russian tax authority |
| CFC rules | Controlled foreign company profits can be taxed in Russia; check exemptions for the Indian subsidiary |
| Profit tax | Corporate profit tax rate reported raised to 25% from 2025; confirm |
| Dividends | Foreign dividends can be taxed at 0% for qualifying holdings (generally 50% for 365 days) subject to conditions; confirm |
| Sanctions | Russian counter-sanctions and the sanctions environment affect banks and deal terms |
Russian-side steps before investing
- Confirm with Russian counsel whether the planned investment needs Bank of Russia approval or falls under the threshold, and whether any special permit or notification applies.
- Check the constitution of the Russian company and any shareholder approvals; strategic or state-linked groups may need extra internal approvals.
- Plan the funding route with a bank that can send payments to India. See sanctions and payments.
- Prepare notifications for the Russian tax authority about the foreign participation and any foreign accounts.
- Complete the Indian steps in parallel so the documents agree. See incorporation steps.
Russian rules at a glance
| Topic | Position in outline | Why it matters for India |
|---|---|---|
| Outbound share investment | Approval or notification depending on amount and counterparty; threshold reported at RUB 30 million aggregate | Funding cannot go out without clearance above the threshold |
| Currency control | Rules on foreign currency payments, accounts abroad and reporting | Affects how capital and loans are sent and how profits come back |
| Foreign participation notice | Notify the tax authority of foreign entities held | Matches the beneficial ownership information given to India |
| CFC rules | Undistributed profits of controlled foreign companies can be taxable in Russia | Dividend policy and treaty position |
| Profit tax | Taxed on worldwide income with credit for foreign tax | Credit for Indian withholding |
Tax on income from India
- Russian companies are taxed on worldwide income, with credit for foreign tax paid. The treaty and Indian Withholding Tax Certificate support the credit. See the DTAA guide.
- Dividends from a qualifying foreign subsidiary can be taxed at 0% where the participation and holding period conditions are met, as generally described; confirm the conditions and any restrictions with Russian counsel.
- Interest, royalties and service fees are taxable in Russia with credit for Indian tax.
- Controlled foreign company rules can tax undistributed profits of an Indian subsidiary unless an exemption applies.
Data and technology
Russian personal data localisation rules affect what can be sent to India. See data protection. Export controls on equipment and technology on both sides should be checked before shipments.
Order of work
Start the Russian clearance, the sanctions review and the Indian incorporation together because they use the same ownership chart and funds plan. Do not remit funds before the Russian clearance and Indian bank approval are in place.
Official sources
Check the rules at the primary sources: Income Tax Department (India), Reserve Bank of India, Ministry of Corporate Affairs, Federal Tax Service (Russia), Bank of Russia and the Ministry of External Affairs (India).
Frequently asked questions
Does a Russian company need approval to invest in India?
Russian residents face restrictions on paying for shares abroad. As reported, transactions up to RUB 30 million in aggregate per counterparty need no individual Bank of Russia approval from 1 July 2026, and larger ones do. Confirm with Russian counsel.
How is the RUB 30 million threshold calculated?
Transactions with the same non-resident entity are added together, counting those made on or after 1 April 2024, with foreign currency converted at the Bank of Russia rate.
Are Indian dividends taxed in Russia?
Foreign dividends can be taxed at 0% for qualifying holdings under conditions, otherwise at the normal rate with credit for Indian tax. Confirm with a Russian adviser.
Do controlled foreign company rules apply?
They can, to undistributed profits of foreign subsidiaries unless an exemption applies. Check the position for the Indian subsidiary.
Must I tell the Russian tax authority?
Russian rules require notification of foreign participation and accounts. Confirm the forms and deadlines with Russian counsel.
What is the Russian profit tax rate?
Reported as 25% from 2025, with credit for foreign tax. Confirm the current rate.
Can money go to India through any bank?
Only through banks acceptable to both the Russian and Indian sides. See the sanctions and payments guide.
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Last updated 26 October 2026. General information only, not legal or tax advice. Indian and Russian rules change often; confirm current requirements before acting.