The constant tightening of Russia's regulations on foreign asset sales has led numerous international firms to abandon or renegotiate their exit deals, Forbes reports citing unnamed sources.

As followed by bne IntelliNews, a special government commission approves any foreign asset sale (at a minimum discount of 50%) and the government has set additional “exit taxes” for companies pulling out of Russia, and their new local beneficiaries. 

Russia is likely to put more strain on foreign companies still operating in the country and raise the “exit tax” from the current level of 15% of the market value of the assets to 35%. In addition, the minimum discount for such deals will reportedly be increased to at least 60% from current 50%, while deals worth more than RUB50bn will have to be approved by the president in addition to approval by a special government commission on foreign investment. 

As a result, Forbes report claims that consulting firms see a backlog of pending sale agreements, with foreign companies reconsidering asset sales due to their extremely high costs.

Anecdotal evidence suggests that the special government commission on foreign investment, led by Finance Minister Anton Siluanov, is frustrating foreign investors, who must navigate a lengthy, multi-tier approval process involving various ministries before even reaching the commission. 

The lawyers interviewed by Forbes estimate that exiting foreign businesses can only count on getting 5%-40% of their assets’ value. Some companies have reportedly withdrawn applications entirely, opting to suspend exit plans indefinitely. Forbes sources estimate around 200 applications currently awaiting approval by the government commission. 

Market activity in foreign asset sales has fallen substantially since 2023, when 97 deals worth $11.9bn were approved, compared with only 34 deals valued at $1.89bn in the first half of 2024, according to AK&M data cited by Forbes.

At the same time, budget revenues from “voluntary contributions” to the budget from the exit deals for 8M24 already exceeded the figure for the whole of 2023, totalling RUB140bn.