If companies that have not yet left Russia plan to do so soon, they will no longer be able to simply withdraw. Namely, the Russian government has made it more difficult to exit business in Russia, and certain companies wishing to leave that market now require the consent of Vladimir Putin.
Following the onset of the conflict in Ukraine and the sanctions imposed by Western countries on Russia, the Russian government has enacted a series of countermeasures to limit the exit of foreign companies from the country. These measures include so-called “counter-sanction decrees,” which regulate the exit transactions of companies from countries that Russia considers hostile, including EU countries, as well as Croatia, the U.S., the U.K., Canada, and Japan. For the sale of shares in Russian companies, prior approval from Russian authorities is now mandatory, and these transactions are strictly monitored by the Government’s Commission for Foreign Investment Control.
The rules include strict conditions. Assets such as shares or stakes in companies can only be sold at a significant discount, which must now be at least 60 percent of the market value. Additionally, companies must pay a so-called “exit tax” of at least 35 percent of the market value, which is a significant increase from previously set conditions. For transactions involving assets worth more than 50 billion rubles (approximately 480 million dollars at the current exchange rate), additional approval from the Russian president is required, although there are no clearly defined procedures for such approvals.
