New Conditions for the Return of Foreign Businesses to Russia: Mechanisms, Requirements, and Consequences

Amid changes in international economic policy, Russian authorities have developed a comprehensive approach to regulating the potential return of foreign companies. This initiative aims to establish transparent and mutually beneficial conditions for the resumption of international business operations in Russia while protecting the interests of the national economy.

The draft law provides for a thorough differentiation of foreign enterprises:

Category: “Former Investors”

• Companies that owned production facilities in Russia
• Enterprises with significant capital investments in the Russian economy
• Legal entities included in the list of strategically important businesses
• Companies that operated in the Russian market for more than 5 years before ceasing operations

Category: “Direct Importers”

• Companies that voluntarily suspended supplies to Russia
• Enterprises included in special economic lists
• Manufacturers of dual-use goods and technologies
• Companies that terminated after-sales service for their products in Russia

Financial Mechanisms and Requirements

For “Former Investors”:

1. Entry Fee:
   1. Base rate: 10% of 2021 revenue
   1. Possibility of installment payments over 2 years for companies with revenue exceeding 10 billion rubles
   1. Special coefficients for various industries (0.7 for pharmaceuticals, 1.2 for IT)
2. Ongoing Obligations:
   1. Guaranteed investments of 15% of annual revenue for 5 years
   1. Mandatory localization of 30% of production within 3 years
   1. Establishment of technological partnerships with Russian enterprises

For “Direct Importers”:

1. Licensing Requirements:
   1. Special import license valid for 1 year
   1. Collateral obligations of 20% of projected annual turnover
   1. Restrictions on profit repatriation (no more than 50% of net profit)
2. Operational Restrictions:
   1. Mandatory insurance of supplies through Russian insurance companies
   1. Use of the national payment system for transactions
   1. Three-year limitation on participation in government procurement

Legislative Process and Timeline

The draft is undergoing a multi-stage approval process:

1. Expert Evaluation (June–August 2025):
   1. Analysis by economic agencies
   1. Discussion in specialized committees
   1. Public hearings with business community participation
2. Pilot Implementation (September–December 2025):
   1. Testing mechanisms in select industries
   1. Adjustments to regulatory framework
   1. Development of digital platforms for interaction
3. Full-Scale Implementation (Starting January 2026):
   1. Launch of all stipulated procedures
   1. Creation of a registry of returning companies
   1. Monitoring of economic impact

Economic Consequences and Prospects

Expected Outcomes:

1. Positive Effects:
   1. Return of up to 40% of departed companies in key sectors
   1. Creation of approximately 150,000 new jobs
   1. Annual investment inflow of $8–10 billion
   1. Technological modernization of related industries
2. Potential Risks:
   1. Increased administrative burden on businesses
   1. Possible debates on compliance with international norms
   1. Need for ongoing monitoring and adjustments
3. Long-Term Prospects:
   1. Formation of new models of economic cooperation
   1. Development of public-private partnership mechanisms
   1. Creation of a flexible system for regulating foreign capital

The proposed measures represent a balanced approach to restoring international economic ties while accounting for current realities. The comprehensive nature of the initiative ensures that the interests of all stakeholders—from the state and Russian businesses to foreign investors—are considered. Successful implementation of this project could mark a significant step in adapting the Russian economy to new global conditions and establishing a sustainable development model.