Russia broadened the range of financial resources allotted for investments in state-owned corporations
In a significant move aimed at attracting foreign capital, the Russian government has introduced a new investment framework for non-residents. The recently signed decree by President Vladimir Putin allows investments through a new type of account called the “In” type account, which offers more withdrawal guarantees than the previously used “C” type accounts.
The decree permits investments in various forms, including rubles and foreign currencies, stocks, bonds, and investment shares. Notably, investments can only be made from foreign bank accounts or institutions located outside Russia. The decree prohibits investments through other types of accounts and bans cash withdrawals from the “In” type accounts, ensuring controlled and transparent investment flows.
Foreign investors can now repatriate their profits without the restrictions imposed by the older account types, a move that is expected to encourage fresh foreign capital into Russia amid ongoing Western sanctions.
In addition to the changes for foreign investors, the Russian government has also allowed state corporations and state-owned companies to invest their temporarily idle funds in participation certificates. This decision is part of the government's efforts to manage idle funds and broaden the portfolio of tools for investing the temporarily idle funds of state-owned companies.
However, the exact conditions for investing in participation certificates have not been specified by the Russian government. Similarly, the decree does not provide information on the potential returns or risks associated with investing in participation certificates.
The Ministry of Finance is responsible for these changes, and the decision to include participation certificates as an investment option is a significant step towards enhancing the investment environment in Russia. The changes aim to provide a more diverse and attractive investment landscape for both foreign and domestic investors.
[1] Source: TASS News Agency [2] Source: Russian Government Official Website [3] Source: Bloomberg News
- The new investment framework for non-residents in Russia allows foreign investors to invest their profits repatriated from foreign bank accounts or institutions, facilitating a more diverse and attractive investment landscape.
- The Ministry of Finance has permitted state corporations and state-owned companies to invest their temporarily idle funds in participation certificates, which is part of the government's efforts to manage idle funds and broaden the portfolio of tools for investing the temporarily idle funds.
