Russia is preparing to tighten the rules for companies seeking to exit its business environment and sell their assets as they pull out. According to a new report in Izvestia which cited the Finance Ministry, soon companies looking to pull out of the Russian market, will be required to make a 15% contribution to the state budget.
Ivan Chebeskov, director of the Department of Financial Policy, said in an interview with the news outlet that companies looking to exit the Russian market will need to calculate the amount they are required to pay based on the full market value of the assets of the company. He said the ruling by the Commission on Foreign Investments, will be released shortly.
Russia had already made the rules for companies seeking to exit its market more stringent, requiring a 50% discount on all foreign deals and a payment to go toward the government budget equal to at least 10% of the sale price.
In addition, exiting the Russian market required permission from a Russian government commission if it was deemed the company was from a so-called “unfriendly” country.
Last month, Reuters reported that an analysis of company fillings and statements showed that foreign firms have already lost more than $80 billion due to write-downs and lost revenue from their Russian operations.
In the Reuter’s report, Aleksey Kupriyanov of Aspring Capital, who has acted as an advisor to the Russian government in dozens of deals, said that it was Russian entrepreneurs and the rivals of Western companies who were profiting off the exits of Western firms.
Following the onset of Russia’s military operation in Ukraine, Western government imposed a raft of sanctions on the Kremlin, forcing large numbers of Western firms to exit the Russian market. Since then, domestic Russian entrepreneurs have filled the niches left by departing Western firms, as Russia has reoriented its foreign trade relationships toward non-Western partners, primarily in China and India.