Kremlin guarantees nonresidents’ new investments in Russia
The Russian government will fully guarantee nonresidents’ investments on the Russian stock market, according to a new decree, signed by President Vladimir Putin.
This decree, coded No. 436 and titled “The additional guarantees of the rights of foreign investors in Russia”, and posted on the Kremlin’s official legal information portal, gives foreign investors, or nonresidents, the opportunity to open new special accounts, designated as “IN”, for investing their capital in Russia. Specifically, the new regime introduced by this decree, applies only to the funds in these “IN” accounts, and cover only new investments, which can be in local rubles or foreign currencies, as well as stocks, bonds, including so-called OFZ, the coupon-bearing Federal Loan Bonds issued by the Russian Government.
In other words, nonresidents’ new investments will not be included in the special “C” accounts, where the so-called pre-western sanctions investments and other financial assets of investors from the so-called “unfriendly countries” are currently blocked or frozen in Russia. This was the Kremlin's response to the illegal freezing of multi-billion dollar assets and investments of the Russian Government and Russian companies in the “unfriendly countries” due to the war in Ukraine.
The neologistic term, “countries unfriendly to Russia” include all western countries, led by the United States, and their international allies, such as Australia, Japan and South Korea, which have imposed stiff sanctions on Russia and are actively supporting Kiev against Moscow in the ongoing Russian-Ukrainian war.
The new decree provides a clear guarantee to foreigners, investing in the Russian stock market, primarily portfolio investors, to freely withdraw their capital from Russia at any time they want, without restrictions and irrespective of such investors’ countries of origin, Deputy Finance Minister Ivan Chebeskov explained, as per local media outlets.
This decree, which guarantees new foreign investors’ rights to freely and safely withdraw their investments from the country at any time they want, according to the Finance Ministry and the Russian Central Bank, will boost the inflow of foreign capital into the country, especially into the local stock market. Such non-resident investors can also take a full advantage of the high yields on equities, securities and other financial instruments of Russian companies and this will have a positive impact on the overall investment climate in the country, they added.
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