News

Businesses from unfriendly countries that have remained in Russia can be divided into four groups depending on the path they have chosen, RBC reports, citing lawyers and consultants.

The first group includes companies that are in the process of leaving, the preconditions for which have recently become a great deal more complicated. For example, accomplishing a sale transaction — even for a symbolic 1 rouble — requires getting permission from the relevant subcommittee, paying a contribution to the federal treasury (35% of the market value), and selling the asset at a discount of at least 60%. Exiting the market, including through sale to local management, is legally and financially complex, the experts say.

However, the funds received from the transaction are generally subject to a special payment procedure using C-type accounts, i.e. "exit" does not always equal "withdrawal of money". 

The second group of companies are those that continue to operate in Russia. They have often stopped investing in marketing and have limited their product range to essential goods. They usually make good profits, but due to counter-sanctions restrictions, they can barely distribute them, keeping them within the Russian entities or using them to develop their current business. Payment of dividends abroad (in excess of RUB 10 million) requires authorisation from the government commission, otherwise they must be put into a C-type rouble account. Raiffeisenbank is an example of such a company.

While large groups and public companies such as PepsiCo, Nestlé, Japan Tobacco International, and Philip Morris cannot avoid publicising their presence on the Russian market, some firms still try to keep to a tactic of "silent presence," the experts say. They make no public statements about their operation in Russia and, even when faced with claims from government agencies, they "deliberately avoid the courts."

Lawyers classify the third and fourth groups of companies as "dormant." The difference between them is that while some continue to submit financial statements showing zero or near-zero amounts (called "sleeping tigers"), others have stopped submitting statements to the tax authorities ("abandoned cars"). The sleeping tigers are waiting for the statute of limitations on liability for tax violations to expire or for the preconditions for exit to change so that they can disappear for good. In the second case, there are no plans to "wake up," so such companies are like abandoned cars. They stop filing statements and do not conduct transactions on their accounts, hoping for "administrative liquidation." By law, legal entities that have not submitted the financial statements required by laws on taxes and duties for the previous 12 months and have not carried out transactions on at least one bank account are considered to have effectively ceased operating and may be removed from the Unified State Register of Legal Entities.