Russia - Country Note

Legal Disclaimer

The purpose of this resource is not to provide legal advice, but rather to give grantmakers and their advisors an opportunity to access potentially relevant materials in a quick and meaningful way. For these NGO law resources, we recognize that the legal and regulatory situations are often fluid and interpretations of local law vary. Please be advised that the Council on Foundations and ICNL are not liable for inaccuracies in these resources or accompanying translations.

If you believe any information in this NGO law resource is incorrect, please inform Lily Liu at the International Center for Not-for-Profit Law of any necessary corrections. For all other questions related to accuracy of non-legal resources within Country Notes, please contact Brian Kastner.

Current as of September 2023 | Download print version (in PDF)

This report describes the legal framework governing nonprofit organizations (also known as non-governmental organizations or NGOs) in Russia, and includes translations of legislative provisions relevant for a foundation or advisor undertaking an equivalency determination of a foreign grantee under IRS Revenue Procedure 92-94.

These reports have been prepared by the International Center for Not-for-Profit Law (ICNL). Please direct corrections and comments to Lily Liu.

We include hyperlinks to the following information, to the extent available:

  • Longer country reports analyzing various aspects of local legislation; and
  • Texts of local laws that affect the decision whether or not to qualify a grantee (generally in translation, although ICNL and the Council cannot warrant the accuracy of any translation; in addition, legislative excerpts were selected by in-country contacts, and ICNL and the Council cannot warrant that all relevant provisions have been translated).

Table of Contents

  1. Summary
    1. Types of Organizations
    2. Tax Laws
  2. Applicable Laws
  3. Relevant Legal Forms
    1. General Legal Forms
    2. Public Benefit Status
  4. Specific Questions Regarding Local Law
    1. Inurement
    2. Proprietary Interest
    3. Dissolution
    4. Activities
    5. Political Activities
    6. Undesirable Organizations
    7. Discrimination
    8. Governance Requirements
    9. Limitations on Organizations Receiving Foreign Funding
  5. Tax Laws
    1. Tax Exemptions
    2. Deductibility of Charitable Contributions
    3. Value Added Tax
    4. Property Tax
    5. Trade Tax
    6. Customs Duties
    7. Double Tax Treaties
  6. Knowledgeable Contacts

I. Summary

A. Types of Organizations

The Russian Federation (Russia) recognizes many organizational forms of non-governmental, non-commercial organizations (NCOs). [1] The Civil Code provides the primary legal framework for NCOs. It divides these into two classes: Non-Commercial Corporate Organizations and Non-Commercial Unitary Organizations. Non-Commercial Corporate Organizations comprise NCOs whose founders have the right of participation (i.e., membership), and may form their own supreme governing body. These include public organizations, associations (unions), and others.

Non-Commercial Unitary Organizations, by contrast, comprise NCOs whose founders do not have membership rights. This class of NCOs includes foundations, institutions, and autonomous non-commercial organizations.

The Federal Law on Non-Commercial Organizations (“NCO Law”) provides additional regulations for certain NCO forms, including: public associations, associations (unions), foundations, institutions, non-commercial partnerships, and autonomous non-commercial organizations. The Federal Law on Public Associations specifically addresses the sub-category of NCOs called "public associations," which consists of public organizations, mass movements, public foundations, public institutions, and other forms. Finally, the Charities Law provides for a sub-category of NCOs called “charity organizations.” This is a particular status for public associations, foundations, institutions, and others forms which entails certain limitations on NCO activities and provides unique tax benefits.

International grantmakers most commonly encounter five organizational forms of NCOs in Russia:

  1. Public organizations;
  2. Foundations;
  3. Institutions;
  4. Autonomous non-commercial organizations; and
  5. Associations (unions).

B. Tax Laws

The Tax Code of the Russian Federation provides that certain types of income shall not be included in an NCO’s tax base for the purpose of calculating its “tax on profits” (hereinafter referred to as “income tax”). Russian law exempts, for example, income derived from “donations” and “grants.” Criteria for transactions to be recognized as such are defined in both tax and civil legislation.

NCOs pay tax on income generated from their economic activities in the same manner as commercial entities, without any benefits. A gratuitous transfer of property to NCOs for the purpose of implementing their primary statutory activity, and that does not relate to economic activity, is not subject to VAT. Goods and services provided on a gratuitous basis as part of charitable activities in compliance with applicable laws are also exempt from VAT.

The Tax Code provides VAT exemptions to NCOs providing certain social services (i.e., in the areas of culture, art, health care, education, and services to the needy) (Tax Code Article 149.2). Furthermore, the Tax Code encourages NCOs to carry out economic activities by allowing them to accumulate savings to secure future expenses relating to economic activities (i.e., to establish a reserve fund). Assets contributed to a reserve fund by an NCO are deductible from the NCO’s taxable income for the purposes of profit tax. The maximum amount of contributions permitted in a reserve fund is limited to 20 percent of the gross revenue over the reporting period (Tax Code Articles 265, 119.3, and 267.3).

Some legal entities may deduct the equivalent of up to 1 percent of their revenue from their taxable income for donations made to NCOs that are registered as socially oriented organizations (SOOs) (Tax Code Article 265). Subject to specific rules, individuals may deduct from their taxable income charitable contributions provided to various NCOs, including registered charities, socially oriented organizations, and religious organizations, as well as to NCOs that use such contributions for the purpose of building an endowment. The maximum amount of a deduction shall not exceed 25 percent of the taxable income received by an individual during the reporting period (Tax Code Article 219).

Individual beneficiaries of charitable assistance are exempt from paying income tax on the value of the charitable assistance received. Charitable assistance provided in-kind and in cash is exempt from income tax when provided by registered charities. The Tax Code does not restrict the amount of income tax-free charitable assistance to individuals (Tax Code Article 217, 8.2).

Russia's structure adds another layer of complexity to the legal and regulatory framework, as Russia is a federation with eighty-nine territorial jurisdictions. [2] Under the Tax Code, regional laws may provide benefits to NCOs beyond those offered under federal law. Accordingly, while this Note focuses primarily on federal legislation, it would also be prudent to review the regional and local legislation where a prospective grantee is registered, in order to obtain a full understanding of the applicable regulations.

II. Applicable Laws

  • Constitution of the Russian Federation, December 12, 1993
  • Civil Code of the Russian Federation, Part I, Federal Law No. 51-FZ, November 30, 1994, as amended
  • Civil Code of the Russian Federation, Part II, Federal Law No. 14-FZ, January 26, 1996, as amended
  • Tax Code of the Russian Federation No. 146-FZ, July 31, 1998, as amended (hereafter “Tax Code”)
  • Administrative Code of the Russian Federation No. 195-FZ, December 30, 2001, as amended
  • Federal Law No. 7-FZ, "On Non-Commercial Organizations," January 12, 1996, as amended (hereafter “NCO Law”)
  • Federal Law No. 135-FZ, "On Charitable Activities and Volunteering," August 11, 1995, as amended (hereafter “Charities Law”)
  • Federal Law No. 82-FZ, "On Public Associations," May 19, 1995, as amended (hereafter “Law on Public Associations”)
  • Federal Law No. 259-FZ, "On Amending Part One, Two, and Three of the Civil Code of the Russian Federation," July 29, 2017 (hereafter “Law on Hereditary Foundation”)
  • Federal Law No. 95-FZ, "On Gratuitous Assistance," May 4, 1999, as amended (hereafter “Law on Gratuitous Assistance”)
  • Federal Law No. 275-FZ, "On Procedure of Establishment and Use of Endowment for Designated Purpose by Non-Commercial Organizations,” December 30, 2006 (hereafter “Law on Endowments”)
  • Federal Law No. 327-FZ, "On the Patronage Activity,” November 4, 2014, as amended
  • Federal Law No. 255-FZ, "On the Сontrol of the Activities of Persons Under Foreign Influence,” July 14, 2022 (hereafter “Law on Foreign Agents”)
  • Federal Law No. 115-FZ, “On Counteraction to Legalization (Laundering) of Proceeds from Crime and Financing of Terrorism,” August 7, 2001, as amended
  • Federal Law of the Russian Federation No. 272-FZ, “On Measures Affecting Persons Related to Violations of Basic Human Rights and Freedoms of Citizens of the Russian Federation,” of December 28, 2012
  • Resolution of the Government of the Russian Federation #485, June 28, 2008, regarding the list of international organizations whose grants (free aid) obtained by Russian organizations shall be tax exempt and shall be accounted for as taxable income of taxpayers – recipients of such grants, as amended

III. Relevant Legal Forms

Legal Hierarchy

In analyzing the forms of NCOs in Russia, it is helpful to keep in mind a hierarchy of legal norms that moves from the general to the particular, beginning with the Civil Code, to the NCO Law, and finally to the Law on Public Associations. As a rule, the provisions of the more general laws apply to all NCOs unless a more specific piece of legislation holds otherwise. With regards to tax treatment, Tax Code provisions have priority over provisions in other legislation.

A. General Legal Forms

Russian law contains many legal forms of NCOs, resulting in a complex and often contradictory regulatory framework. The primary requirements are that NCOs, whatever their form, do not have the generation of profit as their primary objective and do not distribute any such profit among their participants (Civil Code Article 50(1)).

In the context of international grantmaking, the following five forms of NCO are the most common:

  1. Public organizations;
  2. Foundations;
  3. Institutions;
  4. Autonomous non-commercial organizations; and
  5. Associations (unions).

A public organization is the form most comparable to an "association" as used in international parlance. A public organization is a membership-based organization of individuals who associate on the basis of common interests and goals stipulated in the organization's charter (Civil Code Article 123.4; Law on Public Associations Article 8; NCO Law Article 6). Public organizations register at various jurisdictional levels (international, national, inter-regional, regional, and local) depending on the territorial scope of their activities (Law on Public Associations Article 21).

Foundations are property-based, non-membership organizations created by individuals and/or legal persons to pursue social, charitable, cultural, educational, or other public benefit goals (Civil Code Article 123.18; NCO Law Article 7; Law on Public Associations Article 10).

The institution (uchrezhdeniye) is a form that exists in Russia and several other countries of the former Soviet Union. Like foundations, institutions do not have members. Unlike foundations, however, institutions do not acquire property rights in the property conveyed to them (Civil Code Article 123.21; NCO Law Article 20). Moreover, the founders are liable for any obligations of the institution that it cannot meet on its own (Civil Code Article 123.22 and 123.23; NCO Law Article 9(2); Law on Public Associations Article 35). Because of the founders' inability to shield themselves from the institution's liabilities, private founders tend not to use private institutions and generally seek other legal forms to undertake their activities. Public institutions are generally created using state assets. Schools, health care facilities, and cultural organizations are common examples of public institutions.

An autonomous non-commercial organization (ANO) is a non-membership organization undertaking services in the field of education, social policy, culture, and similar fields. In practice, an ANO often generates income by providing its services for a fee (Civil Code Article 123.24; NCO Law Article 10).

An association (union) is an alliance of legal entities and/or individuals that is established to promote mutual interests or public benefit aims (Civil Code Article 123.8).


A public association, foundation, or institution may also register as a charity pursuant to the Charities Law (Charities Law Article 7). An institution can register as a charitable organization only if another charitable organization serves as its founder. Other forms of NCOs may register as charities only if “stipulated by the federal laws for charitable organizations.” Russian legislation does not specifically permit ANOs to register as charities.

Registration as a charity subjects an organization to stricter regulation in terms of activities, expenditures, and internal governance, in return for limited tax benefits. [3] Other than tax benefits, federal law currently does not provide any particular benefits that are exclusive to registered charities.

The federal law on patronage activities established the legal framework for patronage activities in the Russian Federation, as well as rights and duties of patrons and recipients of patronage support. The law defines patronage activities as "activities for gratuitous transfer of property, including money, or the rights of possession, use, disposition of property and (or) gratuitous performance of work and rendering services in the sphere of culture and education in the field of culture and the arts directed on preservation of cultural values and development of activity in the sphere of culture and education in the field of culture and art."


Certain forms of NCOs, including public organizations, religious organizations, foundations and ANOs, may establish endowments (Law on Endowments Article 2). An endowment can be established using funds given by donors to an NCO. Donations to the endowment can only be made in the form of money, qualified stock, or real property. The law requires that endowments be managed by a qualified management company under a contract with the NCO owner of the endowment. Income generated from an endowment can be used by an NCO to finance its statutory activities. The minimum term for establishing an endowment is ten years.

Hereditary foundation

Under the Civil Code of the Russian Federation, a hereditary foundation is formed pursuant to a testament and administers hereditary property after the death of a testator indefinitely or within a given time (Article 123.20-1).

B. Public Benefit Status

An NCO may register as a charity pursuant to the Charities Law. Charitable status provides the organization with unique tax benefits, though certain tax benefits are also available to NCOs without charitable status. [4]

Under the NCO Law, there are two legal statuses related to public benefit that may enable organizations to qualify for tax benefits or other form of governmental support. The NCO Law provides that an NCO may have status as a socially oriented organization, or “SOO,” defined as an organization that is established in any form under the NCO Law (except for state corporations, state companies and political parties) and that undertakes certain activities directed at addressing social problems and the development of civil society, as specified in the NCO Law (NCO Law Article 2). Article 31.1 of the NCO Law contains a fairly broad list of qualifying activities for SOOs, including “charitable activities, as well as activities facilitating charities and voluntarism.” The Ministry of Economic Development awards SOO status and maintains a register of all SOOs. As of September 2023, there are 50188 NCOs with SOO status. Legal entities providing grants to organizations with SOO status may deduct up to 1 percent of their total revenue from their income tax base for donations given to SOOs (Tax Code Article 265). SOOs may also be eligible for governmental support in various other forms, as defined in the NCO Law (NCO Law Articles 31, 31.1, 31.2, 31.3).

The NCO Law also provides a separate status for “a non-profit organization, rendering socially useful services.” The Law defines an organization with this status as “a socially oriented non-profit organization, which renders adequate socially useful services for one year or longer, is not a foreign agent, and does not have tax or levies liabilities or other arrears regarding regulatory charges envisaged by the legislation of the Russian Federation.” A list of socially useful services is set forth by executive order and includes services aimed at social integration and the fostering of abandoned children; services aimed at the medical and social rehabilitation of persons addicted to alcohol, drugs, or other toxic substances; and many other services. [5]

The provision of socially useful services by SOOs is governed by administrative regulations, approved by the Order of the Ministry of Justice of Russia dated October 31, 2022, No. 260. The status is accorded to organizations for a two-year period by the Ministry of Justice; the Ministry determines whether an organization meets the requirements to enjoy such status and enters organizations that qualify into the relevant register.

This legal status of non-profit organizations rendering socially useful services gives organizations priority in receiving state and municipal support in the following forms: allocation of subsidies; transfer of property for temporary use; allocation of free broadcasting time, free printed publications, or publishing materials on the Internet; organizing or assisting in organizing education, professional retraining, and skills improvement for employees and volunteers of organizations; and holding educational, scientific, and action-oriented events. As of September 2023, the register of non-profit organizations rendering socially useful services contained 1,607 NCOs.

IV. Specific Questions Regarding Local Law

A. Inurement

NCOs generally cannot distribute profits to insiders (Civil Code Article 50(1)). The Law on Public Associations states that public foundations must use their assets for public benefit purposes, and prohibits founders and managers from using assets for their personal interests (Law on Public Associations Article 10). In addition, several provisions of the NCO Law are intended to address private inurement and self-dealing by NCO directors and officers. Specifically, an NCO may not remunerate, except for directly related expenses, members of its governing body for the performance of their governance functions (NCO Law Article 29(5)). Fiduciaries of NCOs are required to follow an established procedure of disclosure and recusal in circumstances where there is a conflict of interest with the organization (NCO Law Article 27).

Institutions face a situation that is distinct from other NCOs. By law, founders of institutions have broad discretion in extracting surplus property or funds from the institution's asset base and using them at their discretion (Civil Code Article 296; Law on Public Associations Article 35).

Issues of unreasonable compensation and other forms of private inurement are not explicitly addressed in Russian legislation.

B. Proprietary Interest

The Civil Code and NCO Law state that members of public organizations may not assert proprietary interests over property they have contributed to a public organization, including membership fees (Civil Code Article 123.4; NCO Law Article 6(2)). The Law on Public Associations expands on this slightly with respect to public organizations, by explicitly precluding their members from asserting an ownership interest over the assets of the organization (Law on Public Associations Article 32). Property contributed to a foundation by its founder(s) becomes the property of the foundation (NCO Law Article 7(1)).

Private and public institutions pose particular challenges for issues of proprietary interest, since the founders maintain their property rights and merely assign them to the organization for operational purposes only (Civil Code Article 123.21; NCO Law Article 9; Law on Public Associations Article 35). As provided by law, founders of an institution can reserve for themselves, dispose of, or reallocate any surplus or unused property or income earned in the course of the institution’s activities (Civil Code Article 296).

An important caveat exists regarding donations: To qualify for preferential tax treatment, such income must be provided on a “gratuitous basis” and “for designated purposes,” and it must be used by the recipient for such designated purposes. It includes income received for the “maintenance of non-commercial organizations” and for “implementation of their statutory activities.” In order for tax benefits to apply, an NCO is “required to maintain separate accounting” for its taxable and non-taxable income and expenditures. Thus, it would be possible to determine the number and size of an organization's conditioned gifts and thereby determine any proprietary interests that may exist relating to the organization's assets.

Local experts also believe that, in the case of grants, the explicit requirement (for tax treatment) that grants be provided on a “non-refundable basis” necessarily means that a grantor cannot demand the repayment of a grant in the form of a loan.

C. Dissolution

Upon dissolution of an institution, any remaining assets generally revert back to the founder unless the charter stipulates otherwise. For other forms of NCOs, such as foundations, assets remaining upon liquidation are to be distributed in accordance with the dissolved organization’s governing documents to organizations with the same objectives, or towards charitable purposes (Civil Code Article 63(8); NCO Law Article 20(1)). If it is not possible to use the property in accordance with the organization's governing documents, it reverts to the state (NCO Law Article 20(1)).

Public associations are similarly obligated to distribute remaining assets to advance the organization's objectives in accordance with the public association’s governing documents. If the governing documents do not define a procedure for distributing assets upon dissolution, the public association’s general assembly votes on how to distribute the remaining assets (Law on Public Associations Article 26). In the case of charities, remaining assets must be distributed for charitable purposes under the procedure stipulated in the charity's charter, or, in the absence of such provisions in the charter, as determined by the liquidation commission (Charities Law Article 11).

D. Activities

1. General Activities

Public associations, with the exception of specialized organizations such as trade unions and political associations, have virtually no restrictions on the activities they may pursue as their primary objectives (Law on Public Associations Article 5), including mutual benefit activities (Civil Code Article 123.4; NCO Law Article 6(1); Law on Public Associations Article 8). All foundations are required to engage in public benefit activities (Civil Code Article 123.18; NCO Law Article 7(1); Law on Public Associations Article 10). The primary activities of institutions are broadly defined as any social, cultural or other activities of a not-for-profit nature (Civil Code Article 123.21; NCO Law Article 9; Law on Public Associations Article 11). Charities are required to promote at least one of the enumerated charitable activities indicated in the law (Charities Law Article 2).

An NCO may generate income from economic activities, provided that (i) income-generating activities are stipulated in the NCO's by-laws, and (ii) the income is applied to pursuing the NCO's not-for-profit purposes (Civil Code Article 50(4); NCO Law Article 24). Registration as a charity does not affect or limit the right of an NCO to engage in economic activities (Charities Law Article 12). For an NCO’s activities to be considered "income-generating," there must be a minimum chartered capital of 10,000 rubles, or approximately 100 US dollars.

2. Public Benefit Activities

NCOs may carry out activities that serve multiple purposes, including: the pursuit of social, charitable, cultural, educational, scientific, and managerial activities; health protection, fitness and sports activities; the satisfaction of spiritual and other non-material needs; the protection of the rights and lawful interests of citizens and organizations; the resolution of disputes and conflicts and the provision of legal aid; and other purposes directed toward the achievement of the public good (NCO Law Article 2).

Russian laws use a number of terms to define activities for “public benefit purposes.” The term is used explicitly, for instance, in the definition of a donation, per Article 582 of the Civil Code. [6] However, neither the Civil Code nor any other law of the Russian Federation specifically defines “public benefit purposes.” Several Russian laws include closely related concepts. For example, some Russian legal experts and government officials have equated the concept with the term “charitable purposes” as defined in the Charities Law (Charities Law Article 2). Local experts are not aware of any occasions, for instance, when tax authorities treated funding for activities having “charitable purposes” as taxable income on grounds that the funding was not for “public benefit purposes.”

Charities and foundations are limited to activities of general public benefit (Charities Law Article 6; Law on Public Associations Article 10; NCO Law Article 7). Charities must engage in charitable activities, which are defined as "voluntary activities of individuals and legal entities involved in the altruistic (gratuitous or on privileged terms) provision to individuals or legal entities of property, including money and the altruistic provision of services or other support" directed towards achieving any of the indicated objectives that generally correspond to public benefit activities (Charities Law Articles 1 and 2(1)). Foundations that are not charities must undertake "public benefit" activities but, as discussed above, the law does not define the term.

3. Economic Activities

An NCO may not have the generation of profit as its primary purpose, but it may engage in economic activities to the extent they advance the purposes for which the organization was created (Civil Code Article 50(4); NCO Law Articles 2 and 24(2); Law on Public Associations Article 37; Charities Law Article 12). With some exceptions, detailed in Section V below, profit from the economic activities of NCOs, including charities, is taxed in the same manner as that of commercial organizations.

E. Political Activities

Neither the Civil Code nor the NCO Law expressly limits the ability of NCOs to engage in political activities. [7] All forms of public associations may participate in advocacy and lobbying, for instance. In general, NCOs may also engage in election campaigns for federal and local elections, subject to federal election laws (Law on Public Associations Article 27). However, NCOs that receive money and other assets from U.S. citizens and organizations on a gratuitous basis, or implement projects, programs, or other activities on the territory of the Russian Federation that are deemed to constitute threats to the interests of the Russian Federation, may be forced to suspend their political activities (The Federal Law of the Russian Federation No. 272-FZ “On Measures Affecting Persons Related to Violations of Basic Human Rights and Freedoms of Citizens of the Russian Federation,” of December 28, 2012). The assets of an NCO whose activities have been suspended under the law are also subject to seizure, based on a court decision.

Charities are expressly prohibited from using their assets to support political parties, movements, and campaigns (Charities Law Article 2(2)-2(3)). In addition, religious organizations, governmental and municipal institutions, international public associations, international movements, and foreign citizens are prohibited from making donations to political candidates (Federal Law No. 19-FZ "On RF President Elections," of January 10, 2003, Article 58(6); Federal Law No. 51-FZ "On RF State Duma Deputies Elections," of May 18, 2005, as amended, Article 64(7)). However, these prohibitions do not appear to extend to involvement in lobbying or other politically-related activities.

F. Undesirable Organizations

Under Federal Law No. 129-FZ "On Amendments to Certain Legislative Acts of the Russian Federation,” May 23, 2015, a foreign or international organization may be considered undesirable if it is a non-governmental organization which "represents a threat to the fundamentals of the constitutional system of the Russian Federation, the country's defense and state security." The Prosecutor General or his deputies make this determination in coordination with the Foreign Ministry. Revocation of “undesirable” determinations is carried out in a similar manner. The Ministry of Justice maintains and makes public the list of "undesirable organizations.” As of September 2023, the list contained 108 "undesirable organizations.”

The law restricts any activities, including the formation of branches of the "undesirable organizations" on the territory of the Russian Federation and distribution of its informational materials. If an organization is included on the list of "undesirable organizations," financial institutions will refuse to conduct financial and property transactions with it. The banks are required to notify the Federal Financial Monitoring Service, and the latter must in turn notify Prosecutor General's Office and Ministry of Justice.

Federal Law No. 129-FZ also amends the Criminal Code and Administrative Code by establishing criminal punishments and administrative punishments in the form of fines for participation in "undesirable organizations" (Criminal Code Article 284.1 and Administrative Code Article 20.33). The law also amends the Administrative Code by providing for administrative punishments for posting on the Internet materials that both directly or indirectly express a clear disrespect to society, the State, coat of arms, anthem, flag, Constitution of the Russian Federation, or public authorities (Administrative Code Article 20.3, paras. 3-5).

G. Discrimination

The Russian Constitution generally guarantees individual rights regardless of sex, race, nationality, language, origin, property or employment status, residence, or religious belief (Constitution of the Russian Federation Article 19(2)). Article 5 of the Federal Law on Education (No. 12-FZ, 13/01/1996) guarantees citizens of the Russian Federation the opportunity to receive an education regardless of race, gender, nationality, language, origin, residence, religion, involvement in public associations, age, or health, among other characteristics.

Notwithstanding, Russian law stipulates an exception to the general non-discrimination rule with regard to the membership and management of some NCOs: by law, individuals with dual U.S.-Russian citizenship are prohibited from being members or managers of Russian NCOs or offices of international or foreign NCOs operating in Russia, if such NCOs participate in political activities. Violation of this prohibition will result in suspension of the NCO’s activities (Law on Measures of Affecting Persons Related to Violation of Basic Human Rights and Freedoms, Rights and Freedoms of the Citizens of the Russian Federation Article 3).

H. Governance Requirements

In general, foreign citizens and stateless persons who are legally residing in the Russian Federation may be founders, members, or participants in NCOs or in public associations (NCO Law Article 15; Law on Public Associations Article 19).

However, certain persons may not become founders, members, or participants, including:

  • Foreign citizens or stateless persons whose presence in Russia is deemed “undesirable;”
  • Persons appearing on a money laundering and anti-terrorist financing watchlist maintained by the Russian government;
  • Public associations and religious organizations that have been suspended under the Federal Law on Countering Extremist Activities (Law No. 114-FZ, of July 25 2002);
  • Persons found by a court decision to show signs of participating in extremist activity;
  • Persons who are currently incarcerated as a result of conviction of a crime;
  • Persons who do not meet the requirements provided by federal laws for the founders, members, or participants of NCOs; and
  • Persons who previously held position of the head, or part of the governing body of a public or religious association or other organization, the activities of which were suspended by a court, according to Federal Law "On Countering Extremist Activity" or the Federal Law "On Countering Terrorism," may not be the founder or participant of the nonprofit organization for ten years from the date of the court decision’s enforcement.

Legal persons, including commercial entities, may generally serve as founders for all forms of NCOs except for public associations. Public organizations, however, by definition can only be created by individuals (Civil Code Article 123.4).

Russian Law also sets limitations on the participation of certain categories of Russian citizens in the activities of non-governmental, non-commercial organizations in the territory of the Russian Federation. For example, Russian citizens holding state or municipal offices as well as positions in the state or municipal service are not able to serve as members of the governing bodies, supervisory boards, or other boards of foreign nonprofit nongovernmental organizations and their branches, representative offices, or affiliates (NCO Law Article 30.1).

I. Limitations on Organizations Receiving Foreign Funding

The Law on Foreign Agents places limitations on organizations deemed to be “foreign agents” or “under foreign influence” [9]; the law also imposes certain reporting requirements on these organizations.

Organizations that receive support from a foreign source (such as through the provision of funds, property, or technical assistance) or are otherwise “influenced” by a foreign source may be subject to these limitations and reporting requirements (Law on Foreign Agents, Article 2). Foreign agents must report their status to relevant public authorities and indicate their status in any materials produced.

The law prohibits foreign agents from the following activities, among others:

  • Carrying out educational activities for minors or in state and municipal organizations;
  • Producing information products for minors;
  • Procuring goods, works and services to meet state and municipal needs;
  • receiving state financial support, including in the implementation of creative activities;
  • Carrying out the operation of significant objects of critical information infrastructure and activities to ensure its security;
  • Participating as an expert in the state environmental assessment; and
  • Making donations to election funds of political candidates and political parties.

The Ministry of Justice maintains a unified register of foreign agents, as well as a unified register of individuals affiliated with them. The latter include the founders, managers, members, participants or employees of an organization declared by a foreign agent. Individuals affiliated with foreign agents are not subject to the requirements and restrictions established for foreign agents. As of September 2023, the register contained 685 foreign agents.

V. Tax Laws

The following section discusses relevant tax legislation, recognizing that taxes may affect the amount of the grant actually flowing to the grantee. As with other Country Notes, this section does not provide any form of guidance or advice on tax law, and readers should not rely on this Note when making tax-related decisions.

A. Tax Exemptions

NCOs currently pay income tax at a basic rate of 20 percent (Tax Code Article 284).

The Tax Code of the Russian Federation provides that certain types of income shall not be included in the tax base of NCOs for the purpose of determining profits tax (Tax Code Article 251(2)). Such income is defined as “receipts for designated purposes” (“целевые поступления”). For this tax benefit to apply, the NCO is “required to maintain separate accounting” for its taxable and non-taxable income and expenditures.

Article 251(2)(1) of the Tax Code specifically lists donations as one type of “receipt for designated purposes.” The Tax Code does not otherwise define the term “donations,” referring instead to its recognition under, and conformity with, Russia’s civil legislation. Therefore, to be non-taxable on this basis, income must meet the definition of “donation” under Article 572 of the Civil Code and as elaborated in related laws. To be recognized as a donation, income must be provided on a gratuitous basis for the designated purpose of the “maintenance of NCOs” and “implementation of their statutory activities;” and the NCO must use the income for the designated purpose. An NCO that receives a donation must maintain a separate accounting of the donation’s income and expenditures to receive this tax benefit. [10] Additionally, although in-kind contributions (services) and gratuitous use of property are not donations, NCOs do not have to pay profit tax on them either. (Tax Code Article 251 (2)).

A “grant” under Article 251(1)(14) of the Tax Code is one of several types of income that are not included in an NCO’s tax base for the purpose of profit tax. Like donations, grants are gratuitous transfers made for “designated purposes” and must be used accordingly. Grant recipients must maintain separate accounting of the grant income and expenditures in order to receive this tax benefit. There are several key differences between donations and grants. For instance, a grant may only include monetary and other assets; a transfer of property rights will not constitute a grant. Grants can be provided only for the purposes listed in Article 251(1)(14) of the Tax Code, and thus a grantor should specifically include only one or more of the listed purposes in the grant agreement. Unlike donors, a grantor is obligated to require reports from the recipient on the use of the grant. According to local experts, grantors may impose other requirements on the recipient, so long as the criteria that the grant be gratuitous and non-refundable are maintained.

An otherwise eligible grant may not qualify for tax exemption if the donor is a foreign or international grantmaker. Such a grant is non-taxable only if the grantmaker appears on an official government list in a Resolution of the Russian Government (hereinafter referred to as the “Resolution”) (Russian Presidential Decree #485 of June 28, 2008). The list includes twelve multinational organizations; as of September 2023 only one such organization had been added to the list since the Resolution was issued. Several of the government agencies that are eligible to propose foreign NGOs for inclusion on the list submitted their recommendations in 2009, but the Government has yet to act on these recommendations. The grants of any foreign organization not on the list are considered taxable income for recipients unless they qualify as non-taxable “donations.” A foreign organization that wants to be placed on the list must go through a process of approval. The Resolution provides that the Russian Government will develop accreditation procedures, but as of September 2023 it has not done so.

The Tax Code encourages NCOs to carry out economic activities by allowing them to accumulate savings to secure future expenses related to such activities—that is, to establish a reserve fund. Assets to be contributed to a reserve fund by an NCO are considered expenses that are deductible from the NCO’s taxable income for the purposes of profit tax. The maximum amount of contributions to a reserve fund is 20 percent of the gross revenue over the reporting period (Tax Code Articles 265(19.3); 267.3). Establishment of a reserve fund helps NCOs to better plan economic and other statutory activities, puts them in better standing when they seek loans from a financial institution, and allows them to better promote the interests of other organizations that engage in business transactions with NCOs.

Additional benefits (e.g., some exemptions from VAT and from income tax on profits generated from economic activities) are allowed for certain religious organizations and public organizations of the disabled.

Certain tax benefits are attached to donations forming an NCO’s endowment, and also to income generated by the endowment. For example, the following are not included as taxable income for the purposes of income tax for recipients: money; qualified stock; real property received by NCOs from foreign or Russian grantmakers for the purpose of establishing an endowment; and, in compliance with the law on endowments, such assets received by NCOs from companies managing their endowments as income from the management of the endowment (Tax Code Article 251.2.13-15).

Finally, some NCOs may be able to access reduced tax rates for insurance contributions for individuals (Tax Code Article 427). These include charitable organizations as well as NCOs that provide social services to citizens, or engage in research and development, education, health, culture and art (activities related to theaters, libraries, museums, archives), and mass sports. More specifically, such organizations may pay a reduced tax rate of 20 percent for compulsory pension insurance (compared to the normal rate of 22 percent), 0 percent for compulsory social insurance for temporary disability and in connection to motherhood (compared to the normal rate of 2.9 percent), and 0 percent for compulsory medical insurance (compared to the normal rate of 5.1 percent) (Tax Code Articles 425 and 427).

B. Deductibility of Charitable Contributions

Some legal entities may deduct the equivalent of up to 1 percent of their revenue from their taxable income for donations made to NCOs that are registered as socially oriented organizations (SOOs) (Tax Code Article 265). Individuals, may deduct from their taxable income charitable contributions given to a wide variety of NCOs, including registered charities, socially oriented organizations, and religious organizations, as well as NCOs that use such contributions for the purpose of building an endowment. This type of contribution is deducted from an individual’s taxable income. The maximum amount of a deduction shall not exceed 25 percent of an individual’s taxable income during the reporting period (i.e. calendar year) (Tax Code Article 219).

Regional authorities have the right to increase the upper limit of social deductions of individual income tax up to 30 percent of taxable income received in the tax period, if the recipients of donations are (1) state and municipal institutions undertaking cultural activities, or (2) NCOs that use the donations to establish endowments to support state and municipal institutions.

Moreover, the regional authorities can reduce the amount of income tax by subtracting up to 100 percent of the amount of donations made to form endowments that support state or municipal cultural institutions.

C. Value Added Tax

The VAT is 20 percent (Tax Code Section 164). Generally, all organizations, including NCOs, must pay the VAT. There are some general exceptions, however. The provision of assets to an NCO on a gratuitous basis is not subject to VAT if the assets are provided for the implementation of the NCO’s statutory goals and unrelated to any commercial operation (Tax Code Article 39(3)(3)). Donations or grants to NCOs that meet this criteria, including those from abroad, are not subject to VAT. In addition, the gratuitous provision of goods or services (with the exception of excisable goods), provided in conjunction with charitable activities, is exempt from VAT (Tax Code Article 149(3)(12)). This exemption is not limited to registered charities.

Other VAT exemptions are also granted to certain organizations on services that they provide, including educational and cultural institutions, health-care providers, and scientific institutions (Tax Code Article 149(2)). Also exempt from VAT are goods (except excisable goods) imported under an approved humanitarian or technical assistance program pursuant to the Gratuitous Assistance Law (Tax Code Article 149(2)(19), 150(1)), if certified by a special commission within the Government of the Russian Federation.

In addition, the Tax Code relieves mass media outlets which gratuitously broadcast social advertisements or public service announcements (PSAs) from paying VAT on the assessed value of the PSAs. Previously, many mass media outlets were reluctant to post PSAs because they were required to charge VAT based on the cost of advertisements of similar scope.

D. Property Tax

The Tax Code grants only a few exemptions from property tax that are relevant to NCOs. Exemptions from property tax are granted on property of (1) religious organizations that use the property for religious activities; (2) national public associations of the disabled under certain circumstances; (3) bar associations, law firms, and legal advisors; and (4) certain kinds of state scientific centers (Tax Code Article 381).

Movable property is also excluded from property tax.

E. Trade Tax

The Federal Law No 382-FZ "On amendments to the second part of Tax Code of the Russian Federation, November 29, 2014, imposes a tax on trading activities and is paid by both commercial and noncommercial organizations. In the Moscow region, Chapter 33 came into force on July 1, 2015.

F. Customs Duties

Generally, exemptions or reductions in customs duties are not extended to goods imported for or by NCOs. An exception does exist, however, under the Law on Gratuitous Assistance. Pursuant to this law, donations of funds, goods, and services (with the exception of excisable goods) imported for not-for-profit and charitable purposes may be exempt from customs duties if they are provided in conjunction with an accredited project or program in the form of gratuitous technical or humanitarian assistance. [11] It is forbidden to sell gratuitous assistance imported pursuant to the Law on Gratuitous Assistance.

G. Double Tax Treaties

The Russian Federation and the United States have a double tax treaty, dated June 17, 1992: "On Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital."

VI. Knowledgeable Contacts

Anastasia Kumaritova, PhD, Legal Expert in NCO law:

Daria Miloslavskaya, ICNL, LLC:

Natalia Bourjaily, ICNL:


[1] In this Note the term “Non-Commercial Organization” or “NCO” will be used for non-governmental, non-commercial organizations. The Russian word “некоммерческая”has been translated into English in multiple ways, including, inter alia, “nonprofit,” “non-commercial,” or “not-for-profit.” This Note uses the term Non-Commercial Organization throughout but recognizes that these other terms may be used in translations to signify the same concept.

It is important to note that Russia’s NCO Law includes state corporations and state companies among the possible forms of NCOs. These forms of NCOs are usually used by the state for social, administrative, and public functions (NCO Law Article 7.1 and 7.2). Thus, under the NCO Law the definition of “NCO” includes state organizations as well.

[2] Following Russia’s annexation of Crimea in March 2014, the number of Russian territorial jurisdictions is a matter of some controversy for the global community.

[3] For example, a registered charity must expend at least 80 percent of the charitable donations (in monetary form) that it receives within a year after the donation is received (Charities Law Article 16(4)).

[4] For example, the charitable transfer of goods, services, or property is not subject to VAT (Tax Code Article 149.3(12)), regardless of whether an organization has charitable status.

[5] See Decree of the President of the RF #398, dated August 8, 2016, "On Approval of the Priority Areas in Rendering Socially Useful Services," and Executive Order of the RF Government #1096, dated October 27, 2016, “On Approvals of the List of Socially Useful Services and Their Quality Evaluation Criteria.”

[6] Some experts posit that Article 582 of the Civil Code articulates the activities that would qualify as “public benefit purposes.” See Resolution of the Ninth Arbitration Court of Appeal, of July 27, 2006, August 1, 2006 N09AP-7850/2006-GK in case NA40-12569/06-39-102; Decision of the Arbitration Court of the Moscow Region, of February 4, 2004 in case NA41-K2-20022/03.

[7] The NCO Law may, however, restrict the ability of NCOs to engage in certain political activities by controlling their financing. The Ministry of Justice can prevent a foreign non-governmental organization’s branch, representative office, or affiliate from transferring funds or other resources to recipients, if doing so will “protect... the basis of the Constitutional system... with the aim of defending the country and the state security” (Law on NCOs Article 32(13)).

[8] Counter-terrorism law also mandates reporting for the receipt and use of foreign support exceeding a certain value. Actions taken to obtain cash, property, or other support from foreign governments, international and foreign organizations, foreign citizens and stateless persons, as well as to spend such money and/or other property shall be subject to mandatory reporting, if the amount in question (or its equivalent in foreign currency) is equal to or more than 100,000 rubles (Federal Law No. 115-FZ, “On Counteraction to Legalization (Laundering) of Proceeds from Crime and Financing of Terrorism,” Article 6(1.2). The Federal Financial Monitoring Service of the Russian Federation (Rosfinmonitoring) is responsible for controlling these operations.

[9] The Russian translation of the term “foreign agent” (“иностранныйагент”) carries a negative connotation and is usually interpreted as a synonym of a “foreign spy.”

[10] Please note that although the Federal Law on Charity also sets out a separate definition of a “donation,” tax authorities generally do not recognize “donations” under the Federal Law on Charity to be non-taxable.

[11] Humanitarian assistance is broadly defined as health care or social support to help disadvantaged segments of the population as well as victims of natural disasters or other emergencies. Technical assistance is also broadly defined and includes equipment and services designed to support economic and social reforms and disarmament (Law on Gratuitous Assistance Article 1).


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