Russian lawmakers on Tuesday backed a bill that would force foreign internet companies to set up local offices or face harsh penalties, including an outright ban.
The bill was passed on the first of its three required readings, parliament's lower house said in a statement.
The legislation concerns online companies whose daily users in Russia tops 500,000.
Failure to comply will result in penalties, including a ban on advertising their services, a ban on collecting payments, or partial or full blockage in the country.
Russia has in recent months stepped up efforts to impose more control on online platforms, including Facebook, Twitter and YouTube, with President Vladimir Putin saying large tech companies have become so influential they are "competing" with sovereign states.
The country holds parliamentary elections in September.
Restrictive measures have raised concerns among Kremlin critics, who fear the clampdown is aimed at silencing opposition voices.
In January, Russian authorities accused foreign social media platforms of interfering in the country's domestic affairs by not deleting calls to protest in support of jailed opposition leader Alexei Navalny.
The state telecommunications watchdog in March slowed down the speed at which Twitter operates – a process known as throttling.
It accused the microblogging site of failing to remove content related to child pornography, drug use and calls for minors to commit suicide.
Twitter said at the time it was "deeply concerned by increased attempts to block and throttle online public conversation".