Ikea, Nokia and Carlsberg have left Russia.
In several cases, the assets are sold off at scrap price or nothing – and are taken over by influential Russian entrepreneurs with connections to the Russian top echelon.
Russia’s war coffers have been filled with 13 billion in taxes alone, reports the New York Times.
When Russia invaded Ukraine, the cries came: International companies should leave the country and stop fattening the Russian economy and war coffers through their operations.
A number of international companies, such as Starbucks, Toyota and McDonalds listened and began the process of leaving the country.
Russian President Vladimir Putin has since launched a plan to force companies to sell their Russian assets at scrap prices, reports New York Times.
The Ikea copy Swed House
At the beginning of Russian aggression in 2022, the Russian counter-strategy was not formalized. But in bits and pieces, new decrees have come from Putin that allow Russia to tax and pressure companies to sell off their assets if they want to leave Russia.
In several cases, department stores, factories and other infrastructure have been sold by international companies at a 50 percent discount and then converted into a Russian copy.
One example is Ikea, whose department stores and factories ended up in the hands of a Russian company and were resurrected as Swed House. The purchase price has not been disclosed.
Other companies, such as Kinross Gold, sold their mining operations in Russia at half the price. According to more recent rules, clearance at a 50 percent discount is something foreign companies must count on if they are to leave, reports the New York Times.
Russia is becoming less attractive
As the war in Ukraine entered its second year, the handling of foreign companies became even more intrusive. In addition to Putin having to approve the deals, businesses have been confiscated.
That was the case for Carlsberg and Danone, whose Russian operations were confiscated this summer and transferred to two Putin allies, reports CNBC.
The new taxes alone have led to the equivalent of SEK 13 billion in revenue for the Russian state, according to the compilation from the New York Times.
Russia has become an erratic country for foreign investment after the aggression in Ukraine and management of the companies. How much Russia lost in tax revenue when companies left the country is unclear.