Cross-Border Payments from Russia in 2025

A practical guide to cross-border payment options for international companies with Russian operations — intercompany service fees, dividends, management…

For international groups with Russian subsidiaries, the question of how to move money between Russia and the rest of the world has become one of the most practically challenging aspects of operating in the current environment. SWIFT access is restricted for most Russian banks, correspondent banking relationships have been severed, and the regulatory framework — both Russian and international — imposes constraints on what can be paid, to whom, and in what currency.

This article sets out the current landscape for the main categories of cross-border payment that international groups need to make: intercompany service fees and management charges, dividends, loan repayments, and royalties. We cover what is currently possible, the tax implications of each, and the key compliance considerations.

The current landscape

The cross-border payment environment for Russia has been transformed since early 2022. The key changes that affect international groups are:

Russia maintains a list of "unfriendly" countries — broadly the EU, US, UK, Canada, Australia, Japan, Switzerland, Norway and others. Payments to entities in these jurisdictions face the most significant restrictions. Payments to "friendly" jurisdictions — including UAE, Turkey, China, India, Kazakhstan, and most other countries — are subject to fewer restrictions, though banking and currency control requirements still apply.

Intercompany service fees and management charges

For many groups, the most frequent cross-border payment from a Russian subsidiary to a foreign parent is a fee for services — management fees, shared services charges, IT services, intellectual property licences, technical assistance or similar. These payments have always required transfer pricing justification; they now also carry a withholding tax cost.

Withholding tax from January 2024

A 15% withholding tax now applies to payments by Russian companies for services provided by foreign related parties, where those services are considered to be rendered outside Russia (Article 309 of the Tax Code, as amended). The Russian subsidiary withholds and remits the tax; the foreign parent receives the net amount.

Withholding tax is separate from transfer pricing compliance. Intercompany service fees must still be priced at arm's length and supported by TP documentation. The FTS has increased its focus on intercompany payments — particularly management fees and shared services charges, which are frequently challenged as lacking economic substance or being priced above market.

Dividends

For companies owned by parents in "unfriendly" jurisdictions, dividends from a Russian subsidiary are subject to approval by the Government Commission. The approval process is administrative and the outcome is not guaranteed — though approvals are generally granted where the company continues to operate normally and the dividend amount is in line with historical patterns.

Even where dividend payment is approved, the funds are initially credited to a "C-type" rouble account in Russia. Converting this to foreign currency and transferring abroad requires further regulatory steps. Some groups accumulate rouble balances in C-type accounts as a result of this process — which creates its own currency risk and accounting implications.

For parents in "friendly" jurisdictions — UAE, China, Turkey, India — the Government Commission approval requirement does not apply in the same way, and dividends can generally be paid subject to the standard withholding tax and currency control procedures.

Banking corridors: how payments actually move

Even where a payment is legally permissible, the practical question is which bank will process it. The SWIFT disconnection of most Russian banks means that direct wire transfers to Western banks are largely unavailable. Payments must route through intermediary jurisdictions.

Banks and entities in third countries that process payments connected to Russia face potential secondary sanctions exposure from US, EU and UK authorities. This has led many banks — including in UAE, Turkey and Kazakhstan — to tighten their compliance procedures significantly. Payments that were straightforward in 2022–2023 may now require additional documentation and face delays or refusals. This is a dynamic situation that requires ongoing monitoring.

Payment options by category

Structural considerations

For groups that need to make regular intercompany payments from Russia, the most effective long-term approach is often to restructure the holding or intermediate layer so that the immediate recipient of payments from Russia is an entity in a friendly jurisdiction — most commonly UAE or Turkey.