The Russian Finance Ministry and central bank have announced their plans to ease restrictions on dividend payments to foreigners investing in the Russian economy. These restrictions were implemented as part of capital controls in response to Western sanctions imposed on Russia.
According to a statement released on the ministry’s website, foreign individuals will now be able to receive dividends without any restrictions. However, the amount of dividends should not exceed the volume of their investments in Russia. This move aims to promote foreign investment in the country’s economy.
In addition to the removal of restrictions, there are also certain conditions for dividend payments to non-residents from jurisdictions deemed “unfriendly” by Russia. These conditions include making investments in Russia after April 1, 2023, and contributing to the expansion of production in the country as well as the development of new technologies.
Previously, the volume of dividend payments was limited to 50% of the total net profit of the previous year, subject to the fulfillment of specific key performance indicators (KPIs). However, these restrictions are now being relaxed to encourage more foreign investment.
Russian Finance Minister Anton Siluanov emphasized the importance of foreigners continuing to work in Russia. Companies will only be eligible to receive dividends if they demonstrate a commitment to staying in the country, maintaining jobs, and continuing their operations.
This announcement is expected to attract more foreign investors to the Russian economy, as it provides them with greater flexibility and incentives to invest. It also reflects Russia’s ongoing efforts to strengthen its economy and reduce its reliance on Western countries.
The relaxation of dividend payment restrictions aligns with Russia’s broader strategy to diversify its economy and focus on sectors such as technology and manufacturing. By encouraging foreign investment in these sectors, Russia aims to drive innovation and economic growth.
These developments come at a time when Russia is actively seeking to improve its business environment and attract more foreign direct investment. In recent years, the country has taken steps to simplify regulations, enhance investor protection, and create favorable conditions for doing business.
Overall, the decision to ease dividend payment restrictions demonstrates Russia’s commitment to attracting foreign investment and contributing to the growth and development of its economy. It is a positive step towards increasing investor confidence and building stronger economic ties with foreign partners.
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