Controlled Foreign Companies (CFCs)

Foreign companies in Russia

Main article: Foreign companies in Russia

Chronicle

2023: The number of foreign companies controlled by Russians for the year decreased by 9% to 41.4 thousand.

The number of foreign companies controlled by Russian taxpayers (CFC) as of 2023 amounted to 41.4 thousand, which is 9% less than the level of 2022. Such data in April 2025 are presented in the presentation of the Federal Tax Service on the results of work for 2024. The agency indicates that the recorded decrease was the first since the launch of the CFC declaration mechanism in 2015, when the mandatory disclosure of foreign assets was introduced as part of deoffshorization.

According to RBC, in 2022 there was a rapid increase in the number of controlled foreign companies - by 21% to 45.6 thousand. At the same time, 98% of declared CFCs are foreign organizations, and the remaining 2% are represented by foreign structures (trusts, partnerships, funds and other forms of collective investment or trust management).

The number of taxpayers who provided notifications about the CFC for 2023, on the contrary, increased by 12% and reached 20.48 thousand people. Of these, 83% are individuals and 17% are legal entities.

B1 partner Marina Belyakova explains that the main increase in the number of CFCs in 2022 could be associated with the creation of new foreign companies against the backdrop of political events - for example, in the Gulf countries. At the same time, the business did not manage to reduce the number of historical CFCs in such jurisdictions as Cyprus, the Netherlands and other offshore companies. "The corresponding adjustment due to a reduction in the number of" old "CFCs could have occurred a year later," the expert notes.

Sergey Chelyshkov, partner of the law firm MEF Legal, agrees with this assessment, indicating that in 2022 many controlling persons simply did not have time to liquidate their CFCs, and this began to be reflected in statistics for the tax period 2023.^[1]

Notes