What happened?

Since July 2023, private funds have been able to use the preferential 15% rate (instead of 25%) if 90% of their income came from a closed list of sources specified in Article 284.12 of the Russian Tax Code.

However, in March 2025, the Ministry of Finance shocked the market with Letter No. 03-03-07/27539, stating that income from Russian shares and stakes should be taxed at the standard 25% rate. This put investments in Russian companies through private funds under threat as a structural tool.

Update

In June 2025, the Ministry of Finance issued Letter No. 03-03-04/55121, allowing income from the sale of Russian shares and stakes to be counted when determining eligibility for the 15% preferential rate.

Why this matters?

• Private funds can now freely trade Russian shares and stakes while maintaining the 15% preferential rate.

• The tool becomes more attractive for founder-investors.

• Restrictions that “froze” portfolios of Russian assets due to the lack of benefits are now lifted.

• Investors will be able to either sell stakes at the fund level at the 15% rate, or use the exemption for tax-free sales (when transferring shares/stakes back to themselves) if the holding period of shares/stakes in Russian entities exceeds 5 years (including holding via the private fund) and the sale amount does not exceed 50 million rubles.

Оverall results

Private funds are back in the game. This is excellent news for those structuring their capital through private funds: the question of whether it makes sense to contribute shares or stakes of Russian companies into such a structure is now off the table.