What's happened
Russia has increased the exit tax for foreign companies leaving the country to 35% and raised the required asset sale discount to 60%. These measures aim to retain foreign investments amid ongoing sanctions and economic isolation following the Ukraine conflict. The changes reflect Moscow's strategy to keep Western firms within its borders.
Why it matters
What the papers say
According to Business Insider UK, Russia's Finance Minister Anton Siluanov announced that the tax for foreign companies selling their assets would rise from 15% to 35%, alongside an increase in the required discount on asset sales from 50% to 60%. This aligns with earlier reports from The Moscow Times, which noted that these measures are part of a broader strategy to retain foreign investments despite ongoing sanctions. The Moscow Times also highlighted that President Vladimir Putin may need to personally approve significant asset sales, further complicating the exit process for foreign firms. Meanwhile, Business Insider UK reported that companies like Raiffeisen and UniCredit are facing significant challenges in divesting their Russian operations, with limited options available due to the Kremlin's restrictions. The cumulative effect of these policies has led to over 1,000 global firms either fully exiting or scaling back operations in Russia since the invasion of Ukraine, resulting in substantial financial losses.
How we got here
Since the onset of the Ukraine conflict in 2022, Russia has implemented strict measures to prevent foreign companies from exiting its market. These include steep discounts on asset sales and significant exit taxes, which have gradually increased over time as Western firms faced mounting pressure to divest.
More on these topics
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Russia, or the Russian Federation, is a transcontinental country located in Eastern Europe and Northern Asia. Covering an area of 17,125,200 square kilometres, it is the largest country in the world by area, spanning more than one-eighth of the Earth's in
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Ukraine is a country in Eastern Europe. It is the second-largest European country after Russia, which borders it to the east and northeast.
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Bloomberg L.P. is a privately held financial, software, data, and media company headquartered in Midtown Manhattan, New York City.
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Vladimir Vladimirovich Putin is a Russian politician and former intelligence officer who has served as President of Russia since 2012, previously holding the position from 1999 until 2008.
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Anton Germanovich Siluanov is a Russian politician and economist serving as Minister of Finance since 2011. He served as First Deputy Prime Minister of Russia from 2018 to 2020.