In Russia, the amount of payment for business termination for Western companies has been changed

Payment in the amount of 5% of the market value of the business must be made to the budget by foreign companies from unfriendly countries in the event of the sale of their assets in Russia. Prior to this change, it was necessary to make 10% of the transaction size.

A special government commission dealing with the control of foreign investments took into account certain requirements during the discussion and changed the conditions for approving transactions made by foreigners from unfriendly countries for the sale of Russian assets.

When deciding to grant such permits, the commission will take into account the principle of expediency under the following conditions:

– obligation to pay at least 5% of the market value of the company’s assets to the Russian budget;

– an obligation to pay to the Russian budget an amount of at least 10% of the market value of the company’s assets when selling at a discount of more than 90% of the market value.

At the end of 2022, a special commission established a rule on paying at least 10% of the size of the transaction to the budget, while there was a requirement to sell the company at a discount of at least 50% of the cost, which was determined by an independent assessment.

Now the amount of the contribution to the budget is fixed at 5% of the market value of the company. The Commission does not specify who should pay such a fee, in fact, the buyer pays it, since it is impossible to make such a payment from unfriendly countries.