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When deciding on dividends being paid by foreign companies, the Government Commission for Oversight Over Foreign Investments first checks whether the company plans to wind up its business in Russia. This was stated by Deputy Finance Minister Alexei Moiseev in an interview published by TASS.

He emphasised that the payment of dividends by foreign companies operating in Russia is prohibited only when it appears to be a way of withdrawing money or circumventing established requirements. Dividends are not subject to the 35% government levy (a levy, based on the market value of the asset, that is paid when exiting a Russian business). Therefore, some unscrupulous business owners "are tempted to withdraw money under the guise of dividends and then sell whatever is left of the business," the deputy minister said. He added that there have been cases when companies "seemed to be operating and paying dividends, but gradually withdrew all the profits, leaving behind a business with depreciated property and equipment."

"The main criterion that the commission focuses on is confirmation that the company is continuing to operate in Russia in good faith and has no plans to close," Moiseev said.

However, he noted, the commission assesses the situation based not only on formal documents, but also on intuition. For example, if a few weeks before a dividend payment, the media report the complete termination of advertising contracts, this signals a potential exit, even if the documents look correct.

Moiseev said that the commission is currently reviewing multiple applications from foreign businesses for dividend payments, and there are many positive examples of them receiving permission. Moiseev gave his assurance that there is nothing to fear about applying for permission. "The worst that can happen is that permission will be denied. If it is suspected that the company is planning to leave, but there have been no breaches of the law, the commission will simply not allow dividends to be paid," he said.

The ironclad rule for dividend payments by foreign companies is that payments are made quarterly and that the criterion of not exceeding 50% of the previous year's profit is met, Moiseev points out. However, if the relevant agency does not see the need to submit to the government commission an application regarding the dividend payments, the Finance Ministry will not interfere in the process, and this applies to dividends or any other transactions and operations, he added.