Russia plans to reopen market to companies from "unfriendly countries"

Russia intends to ease controls on new foreign investments, including allowing Western companies to return to the Russian market.

Source: Reuters

Details: Since the beginning of its full-scale invasion of Ukraine, Russia has banned foreign companies from withdrawing their assets from the country, requiring them to keep funds in special accounts. The measure was aimed at preventing capital flight following the war and the introduction of Western sanctions.

Now, the Kremlin is seeking to attract new investors. However, with capital withdrawal restrictions still in place, few practical steps have been taken so far.

"The framework for regulating new money inflow and ensuring the possibility that this money and the income generated from it can be withdrawn has already been resolved," said Aleksey Yakovlev, Head of the Financial Policy Department of Russia’s Ministry of Finance.

He noted that a new decree from Russian leader Vladimir Putin, aimed at easing capital control for new investments, could be issued around mid-year.

Current rules for foreign investors will remain in force.

Capital controls were imposed only on investors from "unfriendly countries" – those that condemned Russia’s aggression and supported Ukraine. Investors from so-called friendly countries, such as China and India, were exempt from these restrictions.

Yakovlev stated that the new rules should apply to all investors regardless of nationality.

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