Putin: Return of Capital Shows Growing Confidence in Russian Economy

Confidence in the national economy is growing, and this is showed by the return of capital to Russia, President Vladimir Putin said at the Congress of the Federation of Independent Trade Unions of Russia (FNPR), according to Kommersant.

“As for the capital that is flowing away, it is really flowing away, but it is also flowing back, more and more. <...> The largest investments come to Russia from countries like Cyprus and the Netherlands. It’s just the repatriation of capital. This suggests that there is trust in the economy, and it is growing,” he said.

However, Putin stressed that “the credibility to the protection of interests, in particular, those of entrepreneurs, is not yet at a very high level.”

“Therefore, [businessmen] often prefer to go to another jurisdiction,” he explained.

Earlier, Putin proposed extending capital amnesty for at least a year, but only for those individuals who transfer funds to the Russian Federation and register a business in special administrative zones.

Capital amnesty is the legalization of Russians’ foreign assets. The first stage of the amnesty took place from July 1, 2015, to June 30, 2016, when the tax authorities collected about 7,200 declarations of foreign property and assets of Russians.

During the second stage, assets worth more than 10 billion euros were declared. In exchange, the claimants were released from tax, administrative and criminal liability for violations of tax and currency legislation. Amnesty applies to all income, transactions, and transactions related to foreign assets and accounts. Those who wanted to return capital to Russia could do it without paying income tax or personal income tax.

On March 6 this year, the Finance Ministry submitted a bill on the third stage of capital amnesty. According to the document, owners of the assets abroad can submit declarations from May 1, 2019, to February 29, 2020. The bill was adopted earlier this month.