Russia tells Western companies they must pay to leave. A Moscow commission on foreign investments ruled that businesses trying to exit must make a donation directly to the Russian state budget. For hundreds of international companies still considering whether to cut ties with Russia over the invasion of Ukraine, it’s an additional complication: Leaving, too, could fund Moscow’s war effort.
It’s not about whether they can leave. It’s about whether they’re allowed to sell their stuff.
If, say, McDonalds decides to “leave” Russia, they don’t just put their personnel on a plane and disconnect the phones. They have millions and millions of dollars in assets that need to be dealt with. Usually by selling the restaurants and assigning all their contracts and whatnot to local entities. When they “leave,” it really means they’re just selling their operations to another company.
That’s where Russia is applying the pain - the “voluntary donation” to the Russian government is 10% of the proceeds from the sale of their businesses to other parties.
That’s true. They could always give all their assets away at $0. But at least according to the article that led off the thread, what they’re doing is selling their assets - presumably for a non-zero purchase price. Presumably this is intended to damage Russia - implementing sanctions to force McDonalds out of Russia hurts their economy, because a non-McDonalds restaurant (presumably) generates less economic benefit than a McDonalds restaurant. But if the Russian government takes 10% of the gross (not the profit) when McDonalds heads out the door, that might not be the case.
When it is written off at $0, that means they got nothing for it (gross). In other words, they just abandoned all their facilities, contracts, etc. So there is no gross, net, or anything else received as compensation (in any form).
Right. I just don’t think that’s what these businesses are actually doing. Per the actual article:
Previously, companies leaving Russia could choose between making a “voluntary contribution” to Russia’s state budget — set at 10 per cent of the value of the sale — or acquiesce to having the payment from the sale deferred by several years.
“Many companies were eager to exit Russia as fast as they could, so they opted for this 10 per cent tax and cash straight away, instead of the uncertainty of deferred payment,” a person involved in a recent exit transaction said.
The tighter regime will leave executives seeking to exit with no option but to make a direct contribution to Russia’s budget.
The “contribution” is based on the proceeds from the sale. If there is no sale, or if the sale is for zero rubles or a barleycorn, there are no proceeds. So this is only relevant to scenarios where assets are being sold for some non-trivial amount of value.
I don’t really think that’s a plausible scenario for any company with assets in Russia, which was kind of my point to Jerry. While it’s theoretically possible that a company could just abandon all their assets rather than selling them - and thus be able to “just leave” and not “pay the bill” - it’s not realistic to think that companies with non-trivial assets would actually do that.
It looks like it still didn´t matter to MCD.
I’ve been wondering for a very long time how many people really understand the depth of the word “communism.”
Which to me is one of the most treacherous and despicable attitudes ever and goes far beyond the borders of the Soviet Union or China.