Vladimir Putin orders consideration of business proposals for the return of foreign companies
The Russian government must report on the results of its consideration of proposals from leading business associations, such as the Russian Union of Industrialists and Entrepreneurs (RSPP) and Delovaya Rossiya, on establishing a "procedure for approving transactions/operations" through which businesses from unfriendly countries will acquire commercial or industrial real estate and shares/stakes in the authorised capital of Russian companies. This follows from President Vladimir Putin's instruction published on 23 June.
"We will still need to make a decision in general on the return of those foreign companies that want to come back. We must support everything that is beneficial to us," Putin said earlier at the St. Petersburg International Economic Forum.
In May, the RSPP reported that it had sent the authorities its proposals on the conditions for foreign companies wishing to return to the Russian market. Those conditions include "good faith" on the part of the company during its departure from Russia and afterwards, and no outstanding obligations to the state or contractors. In addition, the RSPP wants corporate and technological control over businesses in which foreigners are potentially investing to remain with Russian residents.
"Those companies that 'locked the door' and let their Russian contractors down by failing to fulfil their contractual and warranty obligations must first, upon their return, compensate us for the losses we incurred, and if harm was caused to consumers or individuals, they must pay appropriate compensation to the Russian Treasury," said Alexei Repik, chairman of Delovaya Rossiya, at a meeting with the president on 13 May.
The State Duma is considering a bill that would allow foreign investors who left Russia after military operations began in February 2022 to be blocked from repurchasing Russian assets under existing options. According to the amendments, Russian owners will have the right to unilaterally block foreign investors from exercising their options, subject to several conditions that must be fulfilled at the same time, including a significantly reduced repurchase price.
In turn, large international companies have repeatedly stated that they will only consider returning to Russia when the geopolitical conditions change. For example, Oscar Garcia Maceiras, CEO of Spanish company Inditex (which owns the clothing brands Zara, Massimo Dutti, Pull & Bear and others), told the Financial Times that conditions for businesses to return to Russia are not suitable at the moment. Asked under what conditions the company could re-enter the Russian market, Maceiras said, "Certainly not the conditions we have now." He said any decision to return to Russia would only be made in a "more favourable geopolitical environment".