Why the line out is shrinking

The sharp slowdown this year reflects several factors. First, the state has steadily toughened conditions for leaving – selling a business now requires approval from the Government Commission on Monitoring Foreign Investment (with the final decision made by a subcommission), must be done at a discount of at least 60% and requires the buyer to pay a “voluntary contribution” to the budget equal to 35% of the asset’s market value. The stated aim is to prevent acquisitions by “nonprofessional investors.”
This grates with remarks by Foreign Minister Sergei Lavrov that “Russia is not going to expel or discriminate against foreign businesses that have stayed in the country, despite everything going on.”

In addition, completing a sale does not guarantee that the proceeds can be moved abroad. They are first placed in special, “C-type” account – introduced by the Central Bank in 2022 to restrict the withdrawal of assets by nonresidents – and only a limited set of operations is permitted on these accounts. Experts note that cases where the government commission has approved the transfer of funds abroad are exceptional. Typically, that has happened only when the authorities deem the acquisition of a foreign company by Russian buyers to serve a broader economic/social interest.
Dividend repatriation is also rare. Payments exceeding RUB10 million require approval from the government commission. Since 2025, foreign companies have increasingly been stonewalled by their regulators before their applications are passed on to the commission. The likelihood of approval varies widely across ministries, and even across departments within federal agencies. Chances are better when dividends are part of a broader deal – a kind of “prisoner swap” of frozen assets with “unfriendly” governments.

How foreign firms operate in Russia now

Companies that are not trying to exit by going through the government commission can generally be put into one of three groups. The first involves companies that continue to operate profitably but largely cannot move their profits, owing to “countersanctions” restrictions put in place by the Russian government. Money accumulates in Russian accounts and is reinvested in domestic operations.

Based on Kept’s sample, companies from Italy, Belgium, Switzerland and Austria are among those least inclined to exit. This may be because firms from these countries often make products that are still permitted for export to Russia. Some experts say the US and Germany also have their share of companies that intend to stay.
Major international groups such as Nestlé, PepsiCo, Japan Tobacco International, Philip Morris, Globus, Knauf, Bayer and Mars have also been reluctant to exit the Russian market. These companies typically attribute that to a need to supply the Russian population with essential goods while simultaneously limiting investment in the Russian economy. Note that they make almost no public statements about their operations in Russia.

The second group has chosen a strategy of hibernation. Companies maintain a legal presence but conduct virtually no business activity. Staff is reduced to a general director and an accountant; reporting is minimal; and only a legal address remains of the former business. Experts are divided on what is motivating their behavior: some believe this reflects a reluctance to go through the approval process, with companies planning to exit fully when things change; others argue that firms are preserving infrastructure in case of a future shift in the political regime.

A complete halt of operations defines the third group of companies. They neither file any reports nor conduct transactions through their accounts. This approach is taken by businesses that want to leave but have not received permission for voluntary liquidation or do not wish even to try to get it. Under Russian law, if a company has made no transactions for a year and fails to submit reports, the Federal Tax Service may remove it from the business database, though this still does not amount to formal liquidation. Experts conclude that this has become the most common model for exiting the Russian market.