- Foreign investors leaving Russia must donate at least 10% of the proceeds from the sale of assets to the state.
- The new rules apply to investors from “unfriendly countries” that have imposed sanctions against Russia.
- The FT says it has received more than 2,000 applications from companies seeking approval to exit the Russian market.
More than a year into the Ukraine war, the Kremlin is still figuring out ways to penalize foreign companies that leave the country.
Investors from “unfriendly countries” selling businesses must contribute at least 10% of the proceeds to the Russian budget. Document Posted Monday by the country’s Ministry of Finance. An “unfriendly country” is defined as a country that has imposed sanctions on Russia over its invasion of Ukraine.
The new ruling states that such companies are obligated to “voluntarily contribute cash to the federal budget,” and that amount equals at least 10% of the proceeds from the sale. Reuters translation.
This donation previously announced 50% haircut about the sale of assets that these investors have to bear.
Russia has witnessed an exodus of companies that have invaded Ukraine, but some remain, either voluntarily or due to challenges in leaving the Russian market.
Just two months after the start of the Ukrainian war in February 2022, more than 1,000 companies quickly announced that they would voluntarily cut their operations in Russia, but so far have managed to break up completely. of only 520 companies. According to ongoing research It is led by Professor Jeffrey Sonnenfeld of the Yale School of Business.
About 550 foreign companies are still active in the country, according to the report. Yale list. It includes companies from the United States, Germany, France, Italy, and more.
It’s hard for multinationals to pack up and leave Russia
It is difficult for multinationals to simply pack up and leave Russia right away, one said. Wednesday blog post From Saul Estrin and Klaus E. Meyer, professors at the London School of Economics and Ivy Business School, respectively.
Most importantly, foreign operating subsidiaries must comply with a number of Russian policies.
Estrin and Meyer write: “Sudden withdrawal may lead to legal action by business partners or authorities.”
Still, some well-known companies left Russia, including McDonald’s, Starbucks and Goldman Sachs.
The Russian Starbucks franchise was sold to a group of businessmen, rappers and Russian companies, while McDonald’s and Goldman Sachs assets were sold to former employees.
According to Estrin and Meyer, these options are not available to all companies.
More than 2,000 companies are seeking approval to exit the Russian market. financial times But the FT said the authorities handling applications only meet three times a month, considering up to seven applications each time. , the termination process will be longer.
The Russian Finance Ministry did not immediately respond to Insider’s request for comment.