Page 15 - RusRPTJul23

2.5 Top 100 foreign companies still in Russia see profits up by half to $13bn
The Bell.
The top 100 foreign companies still working in Russia from "unfriendly"
countries saw profits soar in 2022, up 54% to RUB1.1 trillion ($13.3bn),
reported Novaya Gazeta Europe on June 9. From the first hundred companies,
two thirds (68%) made money working in sanctioned Russia.
The three most profitable companies were TotalEnergies, BP, and Raiffeisen
bank, which collectively accounted for half of all the profits of the top 100,
reports
While a report from Yale university last August claimed that over a 1,000
international companies with a combined turnover equivalent to 40% of GDP
had pulled out of Russia, as bne IntelliNews reported the actual number is
closer to 9%, with German companies being the most reluctant (4%).
Moreover, of that 9% only a small fraction have actually and formally
completed an exit with the majority simply suspending their business while the
war goes on.
Even those that have exited the market, many have simply sold to their local
management teams and include a buy back option that kicks in in a few
years-time, giving them an easy option to return, should the geopolitical
climate allow.
bne IntelliNews’ Moscow correspondent reports that after the initial shock
following the start of the war when foreign stores pulled down the shutters and
halted supplies, many of the shops have reopened with copycat brands and
shelves are full again with the international brands that are now being imported
by traders via third countries like Turkey making use of the parallel import law
that was also rushed through the Duma in the first weeks of the war.
The situation in big strategic sectors like banking and extraction is even more
complicated after Russian President Vladimir Putin quickly signed a decree
after the war started that bans exits from Russia without special permission
from the Central Bank of Russia (CBR).
In May a special
two additional “exit taxes” for
companies pulling out of Russia and their new local beneficiaries. Most
recently, a presidential decree was signed possibly paving the way for the
eventual nationalisation of foreign assets.
Companies leaving Russia will also be subject to an emergency tax on excess
profits earned in 2021-2022. The tax is based on the difference between the
average profit during that period and the profit in 2018-2019, with a rate of 5%
if paid before November 30, 2023, and 10% thereafter.
government commission approved a law that sets a tax on any foreign asset sale (at a minimum discount of 50%) and the government is mulling at least
15 RUSSIA Country Report July 2023 www.intellinews.com