Companies with foreign participation in the Russian Federation became four times less
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Analysts record a sharp reduction in the international shareholder relations of Russian business – since 2015, more than 70% of companies with foreign co-owners have left the Russian Federation. According to SPARK-Interfax, the number of such organizations has decreased from 103.6 thousand to 26.7 thousand over seven years. For example, the number of companies with German roots has fallen by 68% – from 5.6 thousand to 1.8 thousand. In percentage terms, the largest reduction occurs in low-tax jurisdictions – Panama and the British Virgin Islands (85%), Cyprus (four times). It should be noted that the Russian market is also actively leaving business from “friendly” countries – although companies from Asia were not active in creating enterprises in Russia, they outpaced entrepreneurs from developed countries in terms of flight rates. Since 2015, the number of companies from China has decreased by 79% (from 3.4 thousand to 0.7 thousand), from India – by 87% (from 339 to 43), from Turkey – by 81% (from 1.7 thousand to 0.3 thousand).
The outflow of foreign business from Russia occurs along two trajectories – the departure of foreign companies themselves and the regrouping of Russian business assets and their return from offshore jurisdictions. Deoffshorization, we recall, was accompanied by tougher legislation – in particular, the requirement to report on the income of controlled foreign companies and restrictions on the work of foreigners in a number of industries. In addition, the attractiveness of offshore companies has been reduced by the revision of a number of double tax treaties (in particular, with Cyprus) or even their rupture (with the Netherlands).
Previously, the departure of “real” foreigners was of a selective nature, but after the start of the Russian military operation in Ukraine, it became massive – by October, 317 global companies left the Russian market. The outflow rate of foreign companies has not yet changed compared to 2021, but at least several months pass between the announcement of withdrawal and the formal closure of a legal entity with foreign participation. “It will be possible to fully assess the consequences of the exodus of investors from Russia only next year,” SPARK-Interfax suggests. At the same time, experts are optimistic about the prospects for Russian business on the international market, noting that ties with it are turning into other forms – agency relations, the development of mutual trade, or the preservation of a foreign co-owner in Russia in a veiled or delayed form.
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