In 2023, 29.7 trillion rubles will be invested in the Russian economy, which is 1.8 trillion more than in 2022. Ilya Torosov, Deputy Minister of Economic Development, spoke about this in an interview with Izvestia at SPIEF. He noted that due to the pressure from unfriendly countries, the transition of domestic companies from foreign jurisdiction to Russian one continues. According to the Deputy Minister, aviation, infrastructure and high-value-added production projects remain priority areas for development – the government will allocate more than 4 trillion rubles for them in the coming years. At the same time, in order to increase the attractiveness of the Russian economy, the Cabinet is studying the possibility of partial privatization of large assets.
“Partial privatization is possible through this mechanism”
— The Ministry of Economic Development is responsible for attracting investments to the economy. How do you assess them in the current situation – have they increased or decreased since 2021? How much?
— We have good results in attracting investments – last year, compared to 2021, the growth was 4.6%. This is one of the best economic indicators in general, a lot of work has been done. But we are facing ambitious tasks – we need to attract almost 28 trillion rubles this year. The goal for 2023 is to reach the level of 29.7 trillion rubles of investment in the Russian economy, which will be 1.8 trillion more than in 2022. We understand how we will implement this: there are a number of programs to resubsidize interest rates and distribute risks between investors and the state. This can also be done through the mechanisms of guarantees of development institutions. First of all, our enterprises need investments. Changes in supply chains, the purchase of new equipment, new technological solutions will contribute to this.
— Are we talking about investments by Russian business or are foreign companies also participating in this process?
— Foreign companies are also investing in our economy, but mostly Russian investments. Today, we not only need to increase our own investments, but also to replace foreign investments from unfriendly countries – about 7 trillion rubles. However, most of these funds also had a domestic origin, they simply went through foreign legal entities. Now we rely mainly on friendly countries and our own market.
— Earlier, the market discussed the possibility of a new wave of privatization in Russia. Which companies are eligible for it? Can this measure really be taken?
— I would not talk about the possibility of full privatization, a deep study of this issue is required. But The Ministry of Economic Development generally supports and sets up business for at least a partial IPO. Through this mechanism, partial privatization is possible. Now the government is discussing such a measure and which companies it may affect.. But no decision has been made yet.
“Many people simply do not want to declare themselves bankrupt publicly”
– According to the bill on out-of-court bankruptcy, a larger number of Russians will be able to count on debt cancellation – the amount of debt can start from 25 thousand rubles. How many citizens will potentially be subject to the new rules?
— At the moment, already 17 thousand citizens have applied for this procedure and 12 thousand have passed it. Potentially, hundreds of thousands of Russians fall under it, if we talk about the criteria that are prescribed. But only 10-20% of the potential amount comes. First of all, this may be due to the psychological barrier – Many people simply do not want to declare themselves bankrupt publicly. Or they don’t see the value in it.. But our task is to further develop this mechanism, expand its criteria and capabilities.
For example, amendments have already been adopted in the first reading in the State Duma for its distribution to pensioners. We hope that people will use this procedure more often and understand that this is not a stigma for life, but a normal legal practice for those who find themselves in a difficult life situation.. I remind you that it is free, it can be done through the MFC.
— And what is the minimum amount that people go to file for bankruptcy?
– The average check is 100 thousand rubles, before the minimum was 50 thousand. If the new amendments are adopted, the minimum amount will be 25 thousand, and the maximum will be raised to 1 million. This money can be used to repay not only loans and obligations to financial organizations, but also debts to other individuals, taxes and fines – all this can also be written off through the simplified bankruptcy procedure.
— The Russian authorities, and, in particular, the Ministry of Economic Development, are discussing the possibility of resetting the bankruptcy of individuals after a certain period of time. The term can be up to 10 years or more. At what stage is this question?
— At the stage of discussion and formation of common positions within the government. Now, for five years, a person who has gone through bankruptcy must declare to the creditor that he had such a procedure and restrictions on managerial positions are imposed on him, but after five years such restrictions end. It is necessary to work out the issue of completely ending the mention in the information field of a person’s bankruptcy in the past. This will increase the attractiveness of this procedure for people.
“Business should receive in Russia all the same opportunities for which it went offshore”
— At the St. Petersburg Legal Forum, you stated that the government is preparing a new plan to deoffshorize business. Among the measures that you indicated are the “separate” payment of dividends and the opportunity for shareholders to change jurisdiction without losing their rights. Why do you think business deoffshorization is required now? What other steps do you plan to take in this direction?
— Today, corporate decisions through foreign jurisdictions and offshores, in principle, are not accepted. Due to the actions of unfriendly countries for Russian business, this brings operational problems. That is, if you are doing business through a foreign jurisdiction, there are difficulties with attracting loans, buying and selling a business, restructuring. And in this regard, we are now taking colossal steps to be able to change the business, which is so structured in Russian jurisdiction.
On the one side, legal tools are being expanded so that companies receive in Russia all the same opportunities that they went offshore for. These are various types of shares, and personal funds, and corporate law, and interaction with foreign arbitration courts to resolve disputes. We have been doing this for five years, but we understand that this is not enough. Shareholders should be given the opportunity to defend their corporate rights through a court in Russian jurisdiction if they are violated in a foreign one. This is not about the redistribution of property, but about the restoration of the corporate rights of shareholders that are infringed abroad. We also propose to introduce separate dividend payments on bonds. The shareholder will be able to go to court, confirm his rights and ask him to pay dividends in Russian jurisdiction so that the money does not go offshore and is not frozen there. The government agrees on the need for such a measure and we hope to introduce appropriate legal amendments this year..
— How has the number of companies registered in “Russian offshores” (SARs) changed over the past year? Are there any plans to make them more attractive – to introduce new benefits for residents?
— We see an increase in their number — in 2022, 83 such companies appeared, which is three times more than in 2021. In just six months in 2023, there were 74. That is, the process is underway, companies are actively moving to the Russian Federation. It is clear that business abroad is under pressure, but here they basically lose nothing – neither in tax prospects, nor in corporate decisions. We are also working on legislative amendments, and, perhaps, the State Duma will adopt them next year. According to them, the transfer of the company to Russian jurisdiction will be possible by decision of the shareholders. We will also extend the possibility of double actual registration to five years to make the transition smoother.
Besides, we plan to give the government the right to decide on a change of jurisdiction not only by the decision of shareholders, but also by the decision of the board of directors of companies. In May a bill was adopted in the first reading, according to which the SARs are now allowed not only to move, but also to create a new company, incorporation with foreign participation with the mandatory transfer of assets in foreign ownership. This is a big step, because in fact, from the jurisdiction to which they simply move, a full-fledged one is being created in Russia, in which you can organize a company from scratch. Now there are 211 such players registered in the SAR, we expect further growth. We expect over 250 this year.
“The main priority is projects with high added value”
— Do you plan to allocate funds from the National Welfare Fund to projects in the fuel and energy complex and aviation in the coming years? If so, which projects and what amounts?
Yes, we are planning to. The main priority is projects with high added value, large infrastructure projects. We have already financed 1.2 trillion. 4.2 trillion rubles allocated for these projects until 2025. And based on the results of 2023, we think that we will enter the so-called signed projects, in which we will start financing or assume obligations. For this year, it was planned to allocate funding in the amount of 2.5 trillion rubles, but I hope that this year we will be able to get out of the limit of 4.2 trillion.
About 1 trillion will be directed to the development of the domestic fleet of aircraft, land and water transport, and about 1 trillion will be allocated to fuel and energy complex projects with a large added value.
— What other projects are in priority?
— Construction of roads, infrastructure, development of technologies, as well as support for the capitalization of Aeroflot and Russian Railways and their investment programs. For example, the development of the Trans-Siberian Railway, the creation by Aeroflot of its own aircraft maintenance infrastructure. They also have plans for KPI in terms of fulfilling the number of full-fledged maintenance of boards on the territory of the Russian Federation – for this it is necessary to create an infrastructure.
Money is also sent to buy dual-registered aircraft from foreign lessors. Up to 300 billion rubles allocated for this area. In addition to Aeroflot, other airlines, such as S7, can also receive support.
It is important for us to officially buy the planes, remove the dual registration so that they can serve international flights, because passenger traffic is growing every day.
Funds will also be allocated for the renovation of the St. Petersburg metro – for cars and the locomotive part.
– What are the main pain points of the Russian economy today, which are being worked on?
— The main pain point is attracting investments. We need to give normal long-term investments at a normal price for technological transformation, sovereignty and import substitution. This is what we focus on. We have achieved good results in 2022. We intend to continue doing this in 2023. Now our task is create the foundation for the technological development of the country and attract investment for the coming decades. And we are already building long-term programs.
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