New Russian Presidential Decree Sparks Significant Foreign Investor Interest

A new Russian presidential decree, signed by Vladimir Putin, providing investment guarantees for new investments by non-residents has generated substantial interest, including from investors in unfriendly countries, according to Russian Deputy Finance Minister Alexei Moiseyev.

On July 1, President Vladimir Putin signed decree no. 436 on “Additional Guarantees for Foreign Investors’ Rights”. It stipulates the conditions under which foreign investors may invest in Russia without having to allow for Russian counter-sanctions decrees that placed restrictions for companies from unfriendly countries. It also allows them to purchase Russian securities without prior approval of regulators.

It specifies that when making investments, foreign investors will transfer funds (in rubles or foreign currency) to “Type In” accounts. The decree is designed to encourage foreign investment by reducing the barriers and complexities associated with counter-sanctions.

These investors will have access to deposits in Russian banks, securities trading, primary IPOs, and derivative market instruments.

Moiseyev commented, “I view all this with enthusiasm. There’s already significant interest—people are calling and asking how it works. Several well-known individuals from major investment companies and funds have called to inquire. I’ve also heard that they are already setting up funds to pool these kinds of investments. So, there’s significant verbal interest. We’ll see how it translates into foreign investment, but the verbal interest is substantial.”

An estimated 11% of foreign investors exited the Russian market in 2022 due to sanctions and political pressure. However, despite a drop in GDP in 2023, the Russian economy has weathered this initial storm and is now growing. A complete restructuring of supply chains and the economic base has also created significant new opportunities in Russia, with numerous foreign investors keen to take advantage of this new Russian growth wave.