Sanctions, Foreign Agent Law, and Market Access: How EU Companies Can Still Operate in Russia (2025 Guide)

Introduction

Despite increasing geopolitical pressure, many EU-based businesses continue to deliver services, manage contracts, or hold assets in Russia — either directly or through local partners.

However, navigating the legal and reputational risks posed by international sanctions, the foreign agent law, and Russia’s shifting compliance landscape requires a well-informed and legally sound strategy.

At RT-Union – Russian-Turkish Law & Consulting Firm, we support European businesses in assessing risks, maintaining legal presence, and avoiding enforcement action — while continuing to serve the Russian market.

Can European Companies Legally Operate in Russia?

Yes — with careful structuring and compliance monitoring, EU companies may:

Continue pre-existing contracts (subject to sanctions compliance)
Receive payments from Russian clients
License technology and provide services
Maintain local offices and staff
Own or manage assets (property, shares)

Operations must not violate EU sanctions, Russian countermeasures, or third-party export controls.

RT-Union provides cross-border risk audits and legal guidance for all stages.

Understanding the Russian Foreign Agent Law

The Federal Law No. 255-FZ (2022) establishes criteria under which organizations or individuals may be designated as “foreign agents” in Russia.

Triggers for designation include:

Receiving foreign funding or material support
Engaging in political, media, research, or public advocacy
Operating in sensitive sectors (defense, civil society, elections, etc.)

Consequences:

Inclusion in official registry
Reporting and labeling obligations
Reputational and contractual risks
Potential audits or administrative prosecution

Most commercial companies are not automatically at risk, but proper structuring is essential.

EU & US Sanctions Compliance: What You Need to Watch

European companies must track:

1.Sanction Type: Sectoral sanctions
– Applies to: Defense, dual-use, energy, finance

2.Sanction Type: Individual sanctions
– Applies to: Russian nationals and companies

3.Sanction Type: Trade restrictions
– Applies to: Tech, software, machinery exports

4.Sanction Type: Financial restrictions
– Applies to: Use of sanctioned banks and systems

5.Sanction Type: Services embargo (EU 10th Package)
– Applies to: Auditing, consulting, legal services

Key risk areas:

Use of designated Russian counterparties
Workarounds via third-country structures
Lack of screening mechanisms
Cross-border service exports (esp. in IT, law, finance)

RT-Union provides KYC/AML review and sanctioned party screening.

How to Structure Legal Presence in Russia (2025)

EU companies working with Russian partners can consider:

Option: Representative Office

– Description: Limited to non-commercial activity (e.g. liaison)

Option: LLC (OOO)

– Description: Full local presence with separate legal entity

Option: Distributor/Agent Model

– Description: Operate via third-party Russian partner

Option: Independent Contractors

– Description: Structure via localized B2B agreements

Each model carries different compliance and tax implications — RT-Union builds the structure based on your goals and risk appetite.

Case Example: Italian Tech Consultancy with Russian Client Base

RT-Union advised an Italian software firm with over 20 Russian corporate clients. The firm:

Was not on sanctions list
Used Russian freelancers and collected fees via Turkey

We:

Audited their contract structure
Re-registered their brand in Russia under local legal entity
Ensured no service overlaps with banned sectors
Registered local tax reporting and IP rights
Avoided foreign agent risk entirely

Result: zero legal exposure, full operational continuity

Frequently Asked Questions

Is it illegal to be paid from Russia if I’m an EU business?
Not inherently — as long as you do not transact with sanctioned persons or sectors. RT-Union provides payment channel strategy.

What is the penalty for being designated a foreign agent?
Administrative liability, reputational damage, and in some cases, limitation of contracts. Designation is not criminal, but must be proactively avoided.

Can I work with Russian partners through a third country?
Yes — but “bypass” schemes may violate EU/UK/US regulations. We design compliant structures that withstand audit and banking scrutiny.

Can I provide IT, legal, or accounting services to Russia?
Only within permitted scopes. Certain categories are restricted by EU sanctions — we analyze each case individually.

Why Work with RT-Union – Russian-Turkish Law & Consulting Firm

Strategic legal risk assessments (Russia + EU law)
Legal representation in Russia, with real-time compliance tracking
Local registration and structuring for foreign entities
KYC, contract review, and sanctions filtering
Multilingual legal support (ENG / FR / DE / RU / TR)

We don’t play in gray zones — we build solid legal structures for sustainable presence.

Stay Compliant While Staying in the Market

🕊️ Still serving Russian clients or holding assets?

Let RT-Union design your Russia-facing strategy — compliant, protected, and operational.

📞 Book a confidential risk assessment with a cross-border lawyer.

👉 Protect Your Business with RT-Union