Russia has been consistently tightening its requirements for foreign companies exiting the country since the introduction of the Western sanctions. The “exit tax” was initially set at 10% but was later increased to 15%. Now, the subcommittee of the Government Commission for Control over Foreign Investments in Russia (Subcommittee) has decided to increase the payment to 35%.
The payment schedule has also been revised. 25% of the deal’s value must be paid to the Russian budget within the first month of the deal’s conclusion, 5% within a year, and another 5% within two years.
For the first eight months of 2024 the budget has received almost RUB 140 billion (approx. USD 1.5 billion) from deals involving foreign companies leaving Russia, exceeding last year’s figure of RUB 116.5 billion.
In addition to the increased “exit tax”, the Subcommittee has also raised the minimum discount for deals involving “unfriendly” companies selling assets in Russia from 50% to 60% of the asset’s market value. Furthermore, deals worth over 50 billion RUB will require the Russian President’s approval.
Changes are also planned in the legislation regarding the withdrawal of funds abroad in the form of loans and dividends.
Solstico Legal is ready to provide comprehensive tailor-made advice on the most practical solutions for companies desiring to decrease, put on hold or discontinue operations on the Russian market.
We have vast practical experience in dealing with the approval procedures and in communicating with the Subcommittee on behalf of our clients.