Russia is lifting restrictions on dividend payments for foreigners investing into the country’s economy, partly unwinding limits that were imposed soon after the Kremlin began its war in Ukraine.
(Bloomberg) — Russia is lifting restrictions on dividend payments for foreigners investing into the country’s economy, partly unwinding limits that were imposed soon after the Kremlin began its war in Ukraine.
Companies can now return profit to non-resident investors without restrictions, but the volume of those payments shouldn’t exceed the amount of their investment in Russia, the Finance Ministry said in a statement Wednesday. The previous limit on dividends was set at no more than 50% of the previous year’s profit, the ministry said.
In order to receive payouts, non-residents must commit capital to the Russian economy or have started investing from April 1, 2023, including into expanding production capacity and the development of new technologies.
Russia introduced restrictions on money transfers owed to investors or lenders from states it deemed “unfriendly” in March 2022, weeks after the invasion of Ukraine. Under a Kremlin decree, those payments had to be transfered to special bank accounts in rubles and were banned from moving abroad without special government permission.
President Vladimir Putin in March proposed the possibility of easing those dividend payment rules.
The government’s move on dividends contrasts with the Kremlin’s increasingly hostile approach to companies pledging to divest their operations within the country following the war. Russia has seized local assets of businesses, including yogurt maker Danone SA and brewer Carlsberg A/S, and installed allies to manage them.
(Updates with background about Russia seizing international subsidiaries in final paragraph.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.