Updated: Russia's Demands for Foreign Companies' Return to the Market
Moscow Demands Data on Russian Servers: Stipulates Terms for Corporations
Moscow's Conditions for Foreign Investors Heating Up The Russian government is not mucking around, laying down some serious conditions for foreign companies eager to jump back into the Russian market. Economic Development Minister Maxim Reshetnikov made it clear that they want the tech and the data on their turf.
"The technologies should be here, the data should be stored on our servers," Reshetnikov said to the state news agency TASS. This data localization requirement is part of a broader push to exert control over information and technology within Russia.
Dough Needed: Entry Fee and Investments But that's not all. The Kremlin wants a slice of the pie, too. A draft legal framework proposes a financial barrier for returning companies, including an entry fee calculated as a percentage of their 2021 revenue (with options for installment payments). Additionally, they're expecting guaranteed investments equating to 15% of annual revenue over five years.
Local Production: Keep it Russian Sergey Katyrin, President of the Chamber of Commerce and Industry, stressed that foreign companies can only return if their activities don't harm Russian enterprises, suggesting a protective stance for the domestic market.
Legislation Lockout There's chatter of new legislation that would prevent Western companies who left post-Ukraine invasion from returning easily. This includes canceling buyback agreements, ensuring that Russian companies taking over Western operations retain control and market dominance.
Now, this is pissing off foreign businesses due to ongoing sanctions and the perceived unstable regulatory environment. Western companies are hesitant, struggling with sovereignty, privacy, and compliance issues related to data storage on Russian servers. Yet, the Russian business community that thrives in the absence of Western competition backs these tough conditions to maintain market control and profitability.
[1] Russia sets conditions for foreign companies to return to market, including reinvesting profits, local production, and data storage on Russian servers.
[2] Russian business leaders support restrictions on foreign companies entering the market.
[3] The requirements for local data storage raise concerns about sovereignty, privacy, and compliance with international regulations.
[4] Financial barriers and investment requirements imposed on foreign companies to return to the Russian market will complicate the return process.
[5] Foreign companies remain cautious about returning to Russia due to ongoing sanctions, legal uncertainties, and the perceived unpredictability of the regulatory environment.
[6] The ongoing development and implementation of policy and legislation surrounding foreign investment in Russia, as seen in the recent demands for return, is a hot topic in politics and general news.
[7] The stringent employment policies adopted by the Russian government, requiring foreign companies to invest a portion of their revenue and store data on local servers, could potentially lead to increased local employment in technology and data fields.
