Foreign nationals and international companies holding property in Russia face a significantly tightened regulatory environment. Recent amendments to Russian real estate and civil legislation have introduced new approval requirements, expanded restrictions on property transfer, and broadened the circumstances under which foreign-owned assets may be placed under special administrative control. These changes took effect in early 2025 and apply with immediate force to existing holdings as well as new acquisitions.
Russia's updated real estate legislation imposes mandatory prior-approval procedures on property transfers involving foreign nationals and foreign legal entities. Affected parties must register existing holdings with the relevant state authority and obtain written clearance before completing any conveyancing transaction. The compliance deadline for registration of pre-existing foreign-owned assets under the new rules is 1 September 2025.
This alert identifies which property owners are affected, sets out the threshold criteria, and provides five immediate actions that international companies and individuals should take now.
What has changed and when it takes effect
Russian property law has historically permitted foreign ownership of commercial and residential real estate subject to sector-specific restrictions. The 2025 amendments introduce several material departures from that baseline.
First, property transfer – including sale, gift, contribution to share capital. Additionally, long-term lease exceeding five years – now requires prior governmental approval where the transferor or transferee is a foreign national. A foreign legal entity. Alternatively, a company with foreign beneficial ownership above a defined threshold. The prior-approval requirement replaces the previous notification regime, which allowed transactions to close first and report second.
Second, the Единый государственный реестр недвижимости (Unified State Register of Real Estate, known as EGRON) now records the foreign ownership status of each registered asset. A property flagged as foreign-controlled is subject to additional monitoring. Any attempt to conduct a property transfer without prior approval will result in the transaction being declared void under Russian civil legislation.
Third, a new category of "strategically sensitive zones" has been defined under land register rules. Foreign ownership of real estate located within these zones – which include certain coastal, border-adjacent, and infrastructure-adjacent areas – is now subject to compulsory divestiture within 12 months of the law's entry into force.
The effective date for the approval requirement is 1 March 2025. The registration obligation for pre-existing holdings applies from 1 September 2025. Failure to register by that deadline exposes foreign owners to administrative penalties and, in certain cases, to forced transfer of the asset at below-market valuations determined by the state.
For foreign investors who also hold Russian assets through holding structures in other CIS jurisdictions, the regulatory environment in Kazakhstan presents a contrasting picture and may inform restructuring decisions.
Who is affected: threshold criteria and business categories
The new rules apply to a broad range of foreign-connected property owners. The threshold criteria are as follows.
- Foreign nationals resident or non-resident in Russia who hold title deeds to residential, commercial, or agricultural property.
- Foreign legal entities incorporated outside Russia that own real estate directly or through a Russian subsidiary.
- Russian legal entities in which foreign nationals or foreign entities hold more than a defined percentage of the share capital – practitioners advise treating any foreign participation above a minority stake as potentially caught.
- Trusts, funds, and similar structures where the ultimate beneficial owner is a foreign national or foreign entity.
- International joint ventures holding real estate as part of operational assets in Russia.
Agricultural land, land in border zones, and property in newly designated sensitive areas carry the most severe restrictions. Commercial real estate in major urban centres is subject to the approval regime but not to automatic divestiture, provided the approval process is completed on time.
Due diligence on the ownership chain is now critical. A foreign-owned intermediate holding company – even one incorporated in a CIS jurisdiction – may trigger the regime if its ultimate beneficial owner is a national of a state classified as "unfriendly" under Russian law. Practitioners in Russia note that the list of affected nationalities is broad and includes most EU member states, the United Kingdom, the United States, and a number of other countries.
The tax implications of any forced or voluntary divestiture under these rules are significant. For an analysis of how Russian tax legislation interacts with property disposals by foreign owners, see our coverage of tax law matters in Russia.
For a preliminary review of your property holdings in Russia and an assessment of exposure under the new regime, email us at info@ferrazwhitmore.com.
Immediate actions for international property owners
The window for orderly compliance is narrowing. The following five steps should be initiated without delay.
- Audit all Russian real estate assets. Compile a complete register of title deeds, lease agreements exceeding five years, and any security interests over Russian property. Confirm whether each asset falls within a newly designated sensitive zone by checking against the updated land register.
- Verify beneficial ownership chains. Map the full ownership structure for each asset, including any intermediate entities. Confirm whether foreign participation exceeds the relevant threshold at each level. This analysis forms the foundation of the notarial deed documentation required for the approval application.
- Submit registration notifications for pre-existing holdings. The 1 September 2025 deadline is firm. Late registration does not cure non-compliance – it only reduces the administrative penalty. Prepare documentation packages now, as the competent authority has been processing a high volume of submissions since March 2025.
- Obtain prior approval before any planned transaction. Any conveyancing transaction – including refinancing secured on Russian real estate – must now wait for written governmental clearance. Do not allow commercial timetables to drive transaction closing ahead of approval. A void transaction creates title risk that is difficult and costly to remedy.
- Assess divestiture exposure for sensitive-zone assets. If any holding falls within a designated sensitive zone, the 12-month divestiture window runs from 1 March 2025. That means the deadline for completing a sale or transfer is 1 March 2026. Begin the valuation and counterparty identification process immediately, as state-determined valuations applied after the deadline are typically unfavourable.
For detailed guidance on managing real estate matters in Russia under the new regime, our team is available to advise on both compliance structuring and exit strategies.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our CIS and cross-border real estate practice assists international companies and investors in managing property holdings under evolving regulatory conditions in Russia and neighbouring markets. We combine Portuguese civil law expertise with English common law tradition to deliver clear, results-oriented counsel on property transfer, due diligence, title deed verification, and regulatory compliance. Our team includes practitioners with experience before Russian courts and administrative authorities, supporting clients from initial land register review through to full exit execution. Engaging a lawyer in Russia with cross-border experience is essential when regulatory risk intersects with asset protection. As an international law firm advising on Russian real estate matters, Ferraz & Whitmore provides coordinated support across legal, tax, and structural dimensions. To discuss your exposure under the new rules, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.