‘Will they take it off? Will they leave? Will they strengthen it?’: Putin replies what should businesses prepare for

Return of foreign investors 2.0?

The main topic of the RSPP congress was directly related to geopolitics — what to expect for business in the light of the negotiations between the presidents of the Russian Federation and the United States. Just tonight, the leaders of the two countries are discussing relations between Russia and the United States and the settlement of the conflict in Ukraine, so business still has a lot of questions. What's next? What should I do? Where to go next? However, the hopes for maintaining the current status quo did not materialize.

At the plenary session of the congress, senior officials made it clear that a return was inevitable. The only difference is on what terms it will happen. “The possibility of foreign investors returning to the Russian market should not be taboo, but the Russian Federation needs a unified approach to the conditions for such a return," said First Deputy Prime Minister Denis Manturov.

He cited the retention of controlling stakes and technology rights in assets with foreign capital for Russian companies as sucho share our sovereignty," said the first deputy head of government. He stressed that “the very principles of attracting foreign investment and localisation must change.”

“You have to have a conversation with Trump before 6 p.m.”

Therefore, as soon as Vladimir Putin entered the hall and sat down in a chair, Alexander Shokhin, the head of the Russian Union of Industrialists and Entrepreneurs, immediately reminded him of his evening conversation with US leader Donald Trump. “Judging by Dmitry Sergeevich Peskov's statements, you should have a conversation with Donald Trump before 6 p.m.," the moderator of the meeting began. “Don't listen to him, that's his job," Putin replied to Shokhin and got down to business.

The hwad of state confirmed that the return of foreign companies that left Russia in 2022 is possible. “Those who left are going to return, and the authorities know about it," he said.

But the interests of domestic companies are a priority for the authorities. “Russian business took advantage of the opportunity, invested, and created jobs. We have no right to undermine their plans, to nullify the efforts and funds invested. From these positions, the authorities will consider the possibility of returning foreign companies to the market," the Russian president noted.

At the same time, the “returnees” are divided into two categories and only those who deserve respect will be allowed in. “There are those who have retained staff and technologies and handed them over to Russian management. In fact, they continued their work, but under a different brand. They took risks, but they made a responsible choice," Putin said. But there were also those who left, slamming the door.

“The West is churning out sanctions one after another: they've lost count themselves”

The head of state praised the business for being able to adapt during the powerful sanctions pressure and restrictions on international settlements and operations in foreign markets. For two years in a row, Russia's GDP has been growing at a rate of 4.1%, which is higher than in the eurozone. According to the president, sanctions have become an additional catalyst for structural changes in the economy.

“What will happen next with the illegitimate sanctions against Russia? Will they be removed? Will they leave? Will they strengthen it?” Vladimir Putin touched upon a sensitive topic. He did not give a direct answer, but outlined his vision. “Sanctions are not temporary or targeted measures, but a mechanism of systemic strategic pressure on our country. No matter how the situation develops, our competitors will always strive to restrain the country and weaken its economic and technological capabilities," the Russian president is confident.

For this reason, the West churns them out one by one. “It seems that they themselves have lost count of how many restrictions they have imposed. But the Ministry of Finance has calculated: 28,595 sanctions against individuals and legal entities," Putin noted ironically, noticeably raising his voice. The head of state has no illusions about their imminent removal. And he gave an example from the practice of the USSR and the USA, when relations were on the rise, and the Jackson-Vanik amendment was in effect. “It won't be the same as before. We should not hope for complete freedom of trade and capital flows," Vladimir Putin assured.

Without excessive cooling

The economy continues to grow, but its pace is slowing down, and the volume of business orders is decreasing. “The tightening of monetary policy and the high “key” lead to a compression of lending, curbing investment," complained Maxim Reshetnikov, Minister of Economic Development of the Russian Federation, in the morning.

He stressed that the number one task now is to maintain the investment rhythm. Putin warned that when the economy cools, it is necessary to act carefully. “It seems to be correct, and the Central Bank has agreed, now it is necessary in practice that it does not happen, it is necessary slowly. The Central Bank has some figures, the Ministry of Economic Development has others, but it is important to ensure that no unnecessary freeze occurs," Putin said.

Before that, the business expressed its wishes. For example, Dmitry Shishkin, a member of the Board of the Russian Union of Industrialists and Entrepreneurs, expressed concern that the return of foreign brands would put an end to the efforts of the light industry. “Despite the high cost of money, companies have actively invested in modernizing production and expanding sales channels. However, most see great risks in the further development of the industry due to the likelihood of the return of large international brands. Our manufacturers have limited access to materials and equipment, and it is so difficult to compete with countries with low production costs," he complained.

He proposed three protective measures: increasing brand awareness and popularization, providing access to retail space, and preferential financing of investment projects. And Alexander Portnov, First Vice-president of the Sverdlovsk Regional Union of Industrialists and Entrepreneurs, made a proposal to postpone fines when calculating VAT.

“The number of new VAT payers will increase by several hundred thousand business entities, mainly small businesses. We ask you to consider the possibility of introducing a moratorium on the application of penalties by the tax service for incorrect determination of the tax base, late filing of declarations and other violations for at least a year, and preferably for 2025-2026," he asked. All proposals will be considered by the Government of the Russian Federation.