Open a Trust in Russia

Russian law does not recognise common-law trusts; trust management of property has been regulated by Chapter 53 of the Civil Code since 1996, however it was only with inheritance funds (2018) and personal funds (since 1 March 2022) that the law provided for the creation of irrevocable trusts. This measure was taken in order to allow local wealthy individuals to settle trusts in Russia instead of choosing offshore jurisdictions for the creation of such entities.

The trust is one of the best ways of protecting one’s assets, which is why establishing a Russian trust is a good estate planning solution. Our lawyers in Russia can offer information on the legislation covering the creation of trusts.

Trust management under the Civil Code

Chapter 53 of the Civil Code (trust management of property) is the main law governing trust-like arrangements in Russia. It has been in force since 1 March 1996 as part of the Civil Code, and was complemented by the rules on personal funds in force since 2022. The changes brought to the Trustee Law include the possibility of transferring a property or other assets to a managing company which will administer them for the benefit of a third party. Other laws providing for the creation of Russian trusts are the Contract Law and the Tax Code.

According to the law, a trust will imply three parties:

• –          the settlor – the individual creating the trust;
• –          the trustee – the company or other person in charge with the administration of the estate;
• –          the beneficiary – the party for which the trust was created.

The Russian law also allows the settlor to be the beneficiary of the trust. Creating a trust in Russia implies several obligations for the trustee. Among these, the duty of care is the most important one. Our attorneys in Russia can explain what these obligations are.

The trust agreement in Russia

The main document related to opening a trust in Russia is the trust agreement or the deed of trust. This is a contract signed by the settlor and the trustee. The trust agreement must be concluded in writing; notarisation is not generally required, but a transfer of real estate into trust management must be registered.

Trusts are usually established for a definite period of time; however, the Civil Code limits a trust management agreement to a maximum of five years, unless the law sets another term.

For full information on the taxation of trusts in Russia, do not hesitate to contact our local lawyers. Our Russian attorneys can also assist with the opening of a trust in this country.