Russia requires foreign firms to donate more of their assets

Russia has imposed a policy of requiring firms from countries that don't sell assets in Russia to make a certain amount of voluntary donations to the Russian budget.

Russian government has imposed a requirement for companies from the United States, European countries, and Japan to be designated as unfriendly nations after its invasion of Ukraine.

Moscow is believed to be trying to prevent companies with advanced technological capabilities from withdrawing from Russia by raising the cost of withdrawal while securing funds for the war.

The foreign investment committee of the Russian government introduced the policy on March 2. It was a revision of the policy on voluntary donations by foreign companies withdrawing from Russia in December.

A new policy requires companies from the countries to donate at least 5% of their assets to the Russian budget when withdrawing from the country. In the case of selling Russian operations at discounts of more than 90%, the amount to be paid to the Russian treasury will be at least 10% of the assessed value.

More than 1,200 foreign firms are still active in the country, according to the database of Ukraine's Kyiv School of Economics, which examines trends of foreign companies operating in Russia. Only 207 of the 466 companies that announced their withdrawal from Russia after the invasion have completed the necessary procedures for withdrawal, including the sale of their assets, according to the database.

Russia is struggling to secure new revenue sources despite the uncertainty surrounding its dependence on exports of oil and natural gas due to sanctions by the United States and Europe against the country.

According to Russian news agency Tass, Russian Deputy Prime Minister Alexander Novak, who is in charge of energy, said Tuesday that exports of energy resources accounted for 42% of the country's national revenue in 2022, up from 36% in 2021. Novak said in 2022 oil exports to India increased 22 fold from the previous year, and those to China increased 8%. The Russian oil revenues fell this year, according to observers.