Russia penalizes Western companies that leave the country by forcing them to donate at least 10% of their assets

Western companies leaving Russia in the wake of the full-scale war against Ukraine are facing increasing difficulties in their withdrawal brought on by the Kremlin, which has now mandated that foreign investors must donate at least 10% of the sale to the state. of their assets when they left the country, according to information published on the Russian Ministry of Finance website.

The Kremlin’s new rule applies to investors from “hostile countries” that have imposed sanctions against Russia and mainly affects companies that have not completely withdrawn from the country since February 24, 2022. According to the Financial Times, more than two thousand companies submitted applications to leave Russia.

Moscow is increasingly seeking to penalize Western companies that are withdrawing from the market by making the exit process more expensive. The Russian Ministry of Finance decided that they have an “obligation to make a voluntary cash contribution to the federal budget”, equivalent to at least 10% of the sale value of assets in the territory of the Russian Federation.

Along with the exodus of western companies from Russia since the beginning of the war in Ukraine, many still maintain a presence in the country presided over by Vladimir Putin because it is simply difficult for a multinational to have to leave this market, since its subsidiaries have to follow a series of requirements enacted by Moscow.

Despite more than a thousand companies having announced to withdraw or reduce operations in Russia due to the war, only 520 managed to withdraw effectively, according to a list by Yale University – which shows that there are still 550 Western companies with an active presence in Russia, from countries such as Germany, France, Italy or the United States.

Despite the difficulties in leaving Russia, large companies such as McDonald’s, Starbucks or Goldman Sachs have already done so. In the case of McDonald’s, the assets were sold to former employees, giving rise to a Russian ‘fast food’ chain. Already the Russian franchise of Starbucks, according to “Business Insider”, was sold to a local group that also includes a Russian ‘rapper’.