The Russian government and the Central Bank of Russia are to motivate Russian companies to raise investment capital by listing on Russian stock exchanges. These measures include subsidizing loans, preferential mortgage rates, providing procurement guarantees and other incentives.
This follows the government’s strategy of encouraging Russian companies to enter the equity capital market, with the objective that raising investment funds through stock exchange placements should become more attractive for companies than simply borrowing from Russian banks.
Proposals of how to motivate Russian businesses to list instead of borrowing have been sent by the Central Bank to the Finance Ministry, the Economic Development Ministry and the Industry and Trade Ministry and contain priority support measures for companies listing on Russian stock exchanges. We discuss these incentives as follows:
Procurement
The Central bank proposes granting newly listed companies priority participation in government procurement contracts – both state procurements (under federal law 44-FZ) and procurements by state-owned companies (under federal law 223-FZ). If such an issuer finds itself in equal conditions with other bidders, it would be granted preferential rights to conclude contracts for the supply of goods, work and services.
State Guarantees
The CBR has proposed that newly listed companies involved with large infrastructure projects should be given priority in obtaining state guarantees. This concept also revolves around the belief that publicly listed companies, compared to non-public ones, have better transparency in their financial and business activities transparency, as well as in their ownership structure.
Mortgages
The regulator has also proposed placing newly listed companies into a separate category of industrial mortgage recipients, (as is currently the case for Russian tech companies) and to allow them preferential mortgage rates to construct property related to their projects.
Indirect Tax Incentives
In addition, the bank has proposed that new listed companies be granted preferential access to production sites, premises and land plots in business incubators, industrial parks and technology parks. These zones typically carry significant tax incentives, such as profits tax breaks, reduced utility costs and reductions in employment benefit expenses amongst others.
The bank has also proposed that newly listed companies seeking property tenancy are able to apply for state and municipal real estate leases on preferential terms.
Qualifications
Qualification for these treatments have been proposed for businesses providing at least 15% of shares in free float on stock market listings, while it was also suggested by Prime Minister Mikhail Mishustin that a two-stage scheme be analyzed – a free float of 15% ensures priority access to state support until 2028, thereafter becoming a mandatory condition.
Background
The Central Bank has previously put forward a number of proposals to stimulate Russian businesses to go public, including mechanisms for subsidizing equity financing as an alternative to subsidizing loans. This idea has received support at the highest level.
In 2024, the Russian equity capital market saw 19 deals (15 IPOs and 4 SPOs) which raised more than ₽100 billion (US$1.25 billion). However, amid the tightening of monetary policy, market activity began to gradually decline last year and has stalled in 2025. Since January, only one small initial placement has taken place – JetLend Holding, owner of the JetLend crowdfunding platform, conducted an IPO on the St. Petersburg Exchange raising ₽500 million (US$6.2 million).
The Central Bank Governor, Elvira Nabiullina has previously stated that currently available incentives for Russian companies to list are insufficient for the development of the capital market, saying at the 2025 St. Petersburg International Economic Forum that “The capital market won’t emerge on its own. We’re currently debating measures with the government. The measures developed so far are insufficient to achieve the Presidential target for increasing capitalization and growing the stock market.”
The Russian government is keen to address the issue; it plans to float 30 state-owned companies on the stock exchange by 2030, as was announced by Deputy Finance Minister Ivan Chebeskov in September 2024.
It should be noted that when China began to do the same thing about fifteen years ago, the Chinese public were immensely supportive—with listing values often soaring several times after debut. Russia’s strategy appears to be following the same trajectory—if the regulator and Finance Ministry can effectively motivate the Russian domestic market.
There were 5,363 companies listed on the Chinese domestic stock exchanges in 2024, according to the China Association for Public Companies. Russia has a total of just 214, meaning there is a huge amount of development potential in this financial sector that is yet to be properly utilised.
Further Reading
Sberbank Proposes C-Type Accounts Foreign Investment Participation In Russian IPOs