Disposal of a Production Project in Russia

Starting and running a business in Russia is significantly different from the same process Europe or the United States: it is much more difficult to dispose of a business than to start it, especially for unquoted companies. The inconvenience of liquidating direct investments is a serious barrier for foreign investors who are interested in the production sector of the Russian economy. In this article I would like to highlight the main challenges for the company's owners while disposing of a project and to share my practical experience of solving them in a production company in Russia. Firstly, I consider spotting the optimal time for such disposal depending on the company's strategy. Secondly, I show how to develop the plan for complete or partial exit from the project and to find a buyer. Then, I analyze the methods of calculating the fair price of a business project in Russia and the ways of convincing the buyer. I also describe the local specifics of the due diligence of the project for sale and the methods of maintaining confidentiality when preparing the transaction. Finally, I consider various ways of finalizing the deal from the legal and tax points of view. This article gives an entrepreneur the instruments to develop the exit strategy from a project in order to secure his direct investments in Russia.