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31 Oct, 2023 17:04

Russia rules out ‘easy exit’ for Western firms

None will be forced to stay, but leaving the country’s market is only possible on Moscow’s terms, Dmitry Peskov says
Russia rules out ‘easy exit’ for Western firms

Western companies wishing to quit the Russian market will have to follow the rules set by Moscow, Kremlin Press Secretary Dmitry Peskov stated during a press briefing on Tuesday.

Russia will not be banning foreign exits, but will insist on compliance with its regulations, he stated.

“Taking into account the quasi-war that is being waged with Russia by the collective West, a special regime applies to Western companies that are leaving under pressure from their governments,” Peskov explained, adding that such companies will only be able to divest once they obtain permission from a specially designated government commission to do so.

“A free, unhindered exit, of course, cannot happen now, and the commission strictly regulates this,” Peskov said.

He noted that Russia continues to be “open to foreign investment” and is interested in cooperating with foreign businesses, “ready to create comfortable conditions for companies to work here.”

According to him, many Western firms still operate in Russia and are “quite profitable,” but Russia has no need to force anyone to stay.

“Many niches that are vacated here after the departure of some companies are occupied by other firms,” he explained. “And if businesses from some countries leave, those from other countries show increased interest.”

Many global firms have been forced to reevaluate their presence in the Russian market under pressure from their governments due to sanctions imposed on Moscow over the Ukraine conflict.

However, according to the most recent data from KSE, which tracks around 3,000 foreign companies that operated in Russia prior to March 2022, less than 300 have actually quit the country’s market.

Under existing laws that regulate divestment procedures, firms leaving Russia are obligated to sell their Russian assets at a 50% discount, they need to obtain government permission for the sale, and pay a mandatory contribution to the Russian budget, amounting to at least 10% of half the market value of the company’s assets in the country.

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